Last week, my Fool colleague James penned a piece on Lake Resources N.L. (ASX: LKE) shares. We posited the question of whether this ASX lithium stock might be going to zero.
This followed what was then a new multi-year low for the Lake Resources share price. As my colleague went into at the time, Lake has been suffering immensely from the recent collapse in lithium prices, which has rendered its major Kachi project potentially unprofitable.
The company could well have issues raising any additional capital to cover its cash problems. As such, my colleague concluded that "zero seems like it could be a real possibility down the line" for Lake Resources shares.
At market close today, the Lake Resources share price finished at 9.5 cents each. Today, the company has shed another 5.16% of its value and is now down 8% from where it was last week to 9.2 cents a share.
Its 12-month share price losses now stand at a depressing 88.5%.
Image source: Getty Images
Investors shun Lake Resources shares after quarterly update
Investors don't seem to have reacted too well to Lake Resources' latest quarterly update, which was released today during trading hours. It seems that investors have taken this report as even more bad news.
So for the quarter ending 31 December 2023, Lake reported that it lost $17.97 million through operating its activities. That left its cash balance at $31.3 million at the end of the quarter, down from $60.28 million at the end of the previous quarter.
The company also has $36.19 million of unused cash left in a finance facility, for a total available funding of $67.5 million. Lake Resources estimates that this is enough cash to fund another 2.48 quarters of operation.
However, Lake also highlighted that it was able to reduce expenditures by approximately 20% over the quarter in question. It is also expecting to be able to cut costs by a further 40% over the current quarter (ending 31 March 2024).
Even so, it's clear from investors' reaction today that they are not too keen on what Lake Resources had to say. It will be interesting to see where the company stands at the end of March.
