Liontown Resources shares fall as it posts $31m loss
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The news: Liontown Resources has posted a larger net loss for the first half of the financial year, pointing to falling lithium prices, the costs of its Kathleen Valley project and its failed takeover by Albemarle.
The numbers: The battery minerals producer posted a $31 million net loss for the half, up from a net loss of $6.9 million a year earlier.
It also reported increased expenses, with exploration and evaluation expenditure at $6.6 million, up from $3.1 million year on year, and corporate and administration expenses at $20.7 million, up from $6.4 million.
Liontown said $4.1 million of the corporate and administration expenses was due to its failed Albemarle takeover bid.
The company noted that total liabilities increased by $30.1 million to $106 million and accrued expenses accounted for $98.3 million of the balance, which was primarily related to Kathleen Valley development and mining costs.
Liontown shares were down 7.55% by 3:50pm AEDT.
The context: The material decline in spodumene prices, which triggered significant reductions in short and medium term lithium prices, led Liontown last month to commence a review of the planned expansion and ramp up of the Kathleen Valley project to preserve capital and reduce the near term funding requirements.
On Wednesday Liontown announced it had entered into a $550 million debt facility, designed to ensure its Kathleen Valley lithium project is funded through first production and to repay its Ford facility.
Following this, Jarden analysts downgraded the company to ‘underweight’ from ‘neutral’.
The source: ASX announcement
