The Lake Resources N.L. (ASX: LKE) share price had a month to forget in June.
During the 30 days, the lithium developer's shares crashed a whopping 43%.
As a comparison, the S&P/ASX 200 Index (ASX: XJO) put on a gain of 1.6% for the period.
This means the Lake Resources share price is now down approximately 60% since the start of the year.
Why did the Lake Resources share price get crushed?
Investors were hitting the sell button in a panic in the middle of the month after the company released a bitterly disappointing update on the Kachi lithium project in Argentina.
Lake Resources revealed that it now expects to deliver lithium carbonate production of 25,000tpa in 2027.
This compares to its previous plan of delivering 50,000tpa of lithium carbonate production by 2024. So, that's half the previous production plan and three years late.
But it gets worse. Not only is production lower and further out than expected, but it is also going to come at a significantly higher cost.
Management now estimates that its phase one plan has a capital cost of US$1.1 billion to US$1.5 billion with a run rate operating cost of US$4.70 to US$7.10 per kg. Whereas the company's pre-feasibility study results for 25,500tpa had a capex of US$544 million and lower costs per kg.
What's next?
The company is targeting the completion of its definitive feasibility study (DFS) by the end of December. At that point, it will have a clearer understanding of the costs involved and the overall value of the project.
But with a market capitalisation of $440 million, it is going to be very interesting to see how the company goes about raising enough funds or debt to cover the expected capital expenditure of the Kachi project.
