Lake Resources and Syrah Resources’ Quarterly
We take a look at the latest quarterly results from Syrah Resources Ltd. [ASX:SYR] and Lake NL Resources [ASX:LKE].
LKE and SYR stocks are in focus today as both lithium stocks released their December quarter results.
Below, we dive into the highlights.
Lithium: the big story of 2021, but what about 2022?
As we covered earlier this year, lithium was a big story in 2021.
Eight of the 10 best performing stocks of 2021 on the All orders were lithium stocks.
And Lake Resources has made some of the biggest gains, up more than 1,200% last year.
But the momentum lithium stocks enjoyed in 2021 is waning in the new year.
As you can see below, SYR and LKE shares fell in January.
So far this month, LKE shares are down 10% and SYR shares are down 9%.
So what did the two lithium stocks report in their respective December quarterly reports?
And can the latest results boost the momentum of these actions?
Lake Resources Expands Production Base Case
During the December quarter, LKE disclosed that the baseline Definitive Feasibility Study production scenario had increased to 50,000 tonnes per annum of lithium carbonate equivalent (LCE) for its Kachi Lithium project in Argentina.
Despite the base case increase in production, Lake Resources has not yet finalized long-term financing for its project.
The lithium stock said about 70% of the required funding is ‘available as an indication‘.
‘Long-term, low-cost project debt financing for Kachi is available as an indication UK Export Credit Agency UKEF and EDC of Canada to support approximately 70% of the total financing required for the Kachi production expansion, subject to standard project financing terms.‘
LKE reported net cash used in operating activities of $1.8 million in the December quarter.
Its coffers were bolstered by proceeds from the exercise of options, which brought in $29.4 million for the quarter.
Lake Resources now has $71.3 million in cash and cash equivalents.
Check out our top three ASX-listed pot stocks in 2021. Click here to learn more.
Syrah Resources reports ongoing supply chain issues
Syrah, the operator of the Balama Graphite operation in Mozambique and a downstream active anode materials facility in the United States, revealed that it was still struggling with supply chain issues.
SYR revealed that its December quarterly production was limited by ‘container shipping market disruption.’
Syrah expects “material” improvements over the next quarter.
‘An additional general cargo shipping option is expected to significantly improve production and sales starting in the March 2022 quarter.‘
SYR received US$10.1 million from customers during the December quarter. But it was not enough to offset the operating expenses.
Syrah ended the quarter with net cash outflow from operating activities of US$12.8 million.
The graphite producer ended up spending US$17.9 million on production costs alone.
The main reason is that at the current rate of production, Syrah’s revenues cannot cover its costs.
SYR reported Balama C1 (FOB Nacala) cash costs of $1,159 per ton for the quarter.
But his forecast for cash costs of Balama C1 (FOB Nacala) is USD 430-470 per ton at 15 kt. per month production rate.
In the December quarter in totalSYR produced only 13 kt of natural graphite.
Year-to-date (12 months), Syrah spent US$46.3 million on production costs, compared to customer receipts of US$25.4 million.
Somewhat worryingly, at the end of the quarter, Syrah had only about four quarters of funding at its current level of cash burn.
A capital raise could soon be in sight, I suppose… a capital raise or a new credit facility.
Now, if you want more information on lithium miner ratings and comparisons, I suggest you read our complete lithium miner guide.
It is comprehensive and walks you through the essential factors to consider when thinking about the lithium industry and individual lithium stocks.
For silver morning
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