Consensus community valuation
His extensive experience leadership experience includes serving as Chief Legal Officer, Executive Vice President and Corporate Secretary for McDermott International; General Counsel and Executive Vice President for Technip S.A.; Global Ethics and Compliance Director for Baker Hughes, in addition to other legal and compliance positions within that organization. Mr. Freeman has also served as Prosecuting Attorney for the U.S. Office of Special Counsel and Special Assistant U.S. Attorney for the District of Columbia.
J. Freeman: Has the cred' can these blokes execute the plan?
announcement here: 2924-02608843-2A1418541 (markitdigital.com)
And Paying the directors, LKE - Placement Performance Rights # securities: 465,000 ( at what price unknown at the moment? )
Whats LKE do? - digging up the dirt and sell n ship, So some other dude can make batteries.. Then put wheels on, ship the item back for us.
Lake Resources NL (ASX: LKE; OTC: LLKKF) is a clean lithium developer utilising direct extraction technology for production of sustainable, high purity lithium from its flagship Kachi Project in Catamarca Province within the Lithium Triangle in Argentina among three other projects covering 220,000 ha.
5. Prime Location, Large Projects: Flagship Kachi project in prime location among low-cost producers with a large lease holding (74,000 ha) and expandable resource (4.4 Mt LCE) used for 25 years production at 50,000tpa (JORC Resource: Indicated 1.0Mt, inferred 3.4Mt, refer ASX announcement 27 November 2018). Prefeasibility study at 25,500tpa by tier 1 engineering firm shows large, long-life low-cost operation with US$1.6 billion NPV pre-tax, and annual EBITDA of US$260 million from 2024 using past pricing of US$15,500/tonne lithium carbonate (refer ASX announcement 17 March 2021; 28 April 2020). (No changes to the assumptions in the resource statement or the PFS have occurred since the announcement date.) 6. Other Projects: Lake’s other projects include the Olaroz and Cauchari brine projects, located adjacent to major world-class brine projects in production or construction, including Allkem’s (Orocobre’s) Olaroz lithium production and adjoins the impending production of Ganfeng Lithium/Lithium Americas ’Cauchari project. Lake’s Cauchari project has shown lithium brines over 506m interval with high grades averaging 493 mg/L lithium (117-460m) with up to 540 mg/L lithium. These results are similar to lithium brines in adjoining leases and infer an extension and continuity of these brines into Lake’s leases (refer ASX announcements 12 June 2019, 23 March 2021). Drilling commenced on the Olaroz leases in February 2022. For more information on Lake, please visit http://www.lakeresources.com.au/home/.
Another follow up article in the AFR today: Lake Resources scrambles to respond to short report
Nothing really new covered - it mainly focuses on the doubt over the Lilac DLE (direct lithium extraction) technology aspect, and Lake’s practice of issuing share options to brokers and research firms to produce (favourable) reports on the company’s prospects
Two articles in todays AFR also touched on this as well
The first: ‘Remote chance’: JCap attacks Lake Resources’ lithium project
and the second was not specifically about LKE but rather on recent levels of shorts on the ASX in general and the areas of the market it's happening: Short sellers raise bets against ASX retailers, lithium plays - also included an interesting visual of the top shorted companies
Quoting a part at the end of the later article:
"Hedge funds versus lithium fans
It would be remiss not to highlight speculative lithium explorers as another heavily shorted sector especially popular among young investors keen to buy anything boasting an electric vehicle theme
Recent S&P/ASX 200 entrants Lake Resources and Core Lithium have 9 per cent and 7.7 per cent of their shares shorted, respectively
Morningstar said short interest in the pre-revenue duo doubled over June as professional hedge funds bet against retail investors
Europe-focused lithium explorer Vulcan Energy has 6 per cent of its shares shorted and, like Lake Resources, claims it can extract lithium directly by using technologies as yet unproven at commercial scale
Morningstar also said short interest in AVZ Minerals is up an incredible eight times since March. Shares in the lithium play are suspended amid a legal dispute over ownership rights to its Manono tenement in the Congo"
To follow up Andrew's Post.
Shorting is very hard and doing requires you to really optimise the asymmetry of the bet. A few items in the report I think are meh, some others are critical issues. The biggest one being the efficacy of the Lilac process. However, even if LKE had to walk it back and go down a different path like peer ASN, or worse case, go to a conventional brine process rather than any DLE, its a big set back but not terminal
As such, if LKE is anything short of an actual fraud thus a full zero then your risk reward shorting here is way off and there is the added risk of a reboot of a hot lithium trade that reverse sentiment and price action.
Chart below is to illustrate when you should think about a short if you have the conviction to do so. I'm a firm believer that you want a tailwind in your sail (i.e. negative price momentum) to consider the risk but waiting until the stock is already down 73% from the high seems like wasted potential and to be asking for trouble.
I do note that charts in the report cut off around May 22 so chance is they're short way higher and the report was caught up in review/legals, however, the mark is when the report goes live.
Notes: I'm not long LKE and don't care for it otherwise either way.