More bad news: Why Lake Resources shares plunged 5% today

Lake Resources investors nursed more losses today…

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%.

A businesswoman ponders why her boat is sinking in the ocean.

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.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

Female miner in hard hat and safety vest on laptop with mining drill in background.
Materials Shares

Why are Lynas Rare Earths shares crashing 6% today?

Are Lynas Rare Earths shares a buy, sell, or hold now?

Read more »

Businessman planning and analysing investment data.
Materials Shares

Forget PLS, this ASX lithium stock could rise 80%

Is this lithium miner about to roar higher? Here's what Bell Potter is predicting.

Read more »

Couple using their digital tablet together.
Materials Shares

Orica updates on North American supply and land sales

Orica secures key North American supply and updates on land sales, supporting future growth and shareholder value.

Read more »

Man analysing data on his laptop.
Materials Shares

Forget BHP and buy this ASX copper stock

Bell Potter thinks there could be big returns on offer from this stock.

Read more »

A brightly coloured graphic with a silver square showing the abbreviation Li and the word Lithium to represent lithium ASX shares such as Core Lithium with small coloured battery graphics surrounding
Materials Shares

Why are Core Lithium shares crashing 8% on Thursday?

A busy morning of announcements has investors taking notice.

Read more »

a man clasps his hand to his forehead as he looks down at his phone and grimaces with a pained expression on his face as he watches the Pilbara Minerals share price continue to fall
Materials Shares

PLS shares have surged 85% in a year. So why are short sellers circling?

Could the bears be getting ahead of themselves?

Read more »

Senior farmer in overalls standing beside flood area on field.
Materials Shares

Why is this ASX share crashing 8% on Wednesday?

A positive earnings outlook hasn't stopped the selling.

Read more »

A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their shares on a laptop.
Materials Shares

3 reasons to buy BHP shares for 2027

I take a closer look at what could keep this mining giant growing well beyond 2027.

Read more »