The Lake Resources N.L. (ASX: LKE) share price has continued its slide on Tuesday.
In morning trade, the lithium developer's shares are down 6% to a two-year low of 22.5 cents.
This latest decline means that Lake Resources' shares have now lost two-thirds of their value over the last 12 months.
What's going on with the Lake Resources share price?
Investors have been selling down the Lake Resources share price this year after the company significantly rebased production expectations.
Lake Resources revealed that it now expects to deliver lithium carbonate production of 25,000 tonnes per annum in 2027.
This was very disappointing news given that the company had previously told the market to expect production next year. Not in four years.
But even worse, the company had been guiding to 50,000 tonnes per annum of lithium carbonate production in 2024. So, investors will now have to wait four years for half the production that was previously promised.
Anything else?
They say that bad news comes in threes. Well, it certainly does with Lake Resources.
As well as lower production and delays to commissioning, the company now expects its capital expenditure to be materially higher than planned.
Management 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.
As a comparison, the company's pre-feasibility study for 25,500 tonnes per annum indicated capital expenditure of just US$544 million and lower costs per kg.
Will its shares recover?
The current Lake Resources share price implies a market capitalisation of approximately $320 million.
At the end of the last quarter, the company had a cash balance of A$113.3 million. This means it will now need to find a way to come up with over US$1 billion in funding for its phase one plan without significantly diluting shareholders. Whether that is possible, only time will tell.
Investors may want to keep an eye out for its definitive feasibility study (DFS), which is expected to be released in December. This will give investors an idea of just what the project could be worth. Until then, it is hard to see the Lake Resources share price making a meaningful recovery.
