The Lake Resources N.L. (ASX: LKE) share price was well and truly out of form in the last financial year.
Over the 12 months, the lithium developer's shares lost approximately 60% of their value.
This compares unfavourably to a gain of almost 10% that was recorded by the S&P/ASX 200 Index (ASX: XJO).
Why was the Lake Resources share price sold off?
The Lake Resources share price was on a downward trajectory for much of the 12 months.
High levels of short selling, concerns over the outlook for lithium prices, and doubts over its direct lithium extraction (DLE) technology were largely to blame for this.
However, the declines accelerated late in the financial year when the company released an update on its Kachi lithium project in Argentina.
What was the update?
That update was about as bad as it could get for shareholders.
Management reset expectations for the project, revealing that it expects less production, significantly higher costs, and much later than previously planned.
Lake Resources now expects to deliver lithium carbonate production of 25,000tpa in 2027. This compares to its previous guidance of 50,000tpa of lithium carbonate production by 2024.
As for costs, the company 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.
All eyes will now be on the company's definitive feasibility study (DFS), which is expected to be released by the end of December.
In addition, investors will no doubt be keeping an eye on the company's funding plans. With project costs expected to be upwards of triple its current market capitalisation, it could be very dilutive for shareholders and/or lead to a significant debt burden.
