The Lake Resources NL (ASX: LKE) share price has been in the doldrums. At the time of writing, it has sunk to 4.6 cents apiece, down from highs of 7.8 cents in October and way below its previous peak of $2.31 back in April 2022.
Investor sentiment remains weak, but it's not concentrated on Lake Resources. The entire ASX lithium basket is down, as lithium prices recently hit multi-year lows.
Despite the company's efforts to stabilise its financials and progress its flagship Kachi Lithium Project, the market appears to think otherwise.
The stock is down a further 2.13% on Thursday at the time of writing after the company held its annual general meeting (AGM) today. Here are the key takeouts.
Lake Resources share price under pressure
They say pressure forms diamonds, but nothing is shining with the Lake Resources share price right now. The lithium miner's most recent quarterly update didn't do much to restore investor confidence either.
In its Q3 2024 cash flow report, the company revealed that it burned through $6 million in cash for its operating activities despite raising $2.5 million through its at-the-market (ATM) facility.
At the end of the quarter, cash and cash equivalents stood at $17.5 million, providing some breathing room and longevity to operations.
But falling lithium prices have been an anathema to the sector this year, resulting in sharp repricings of most stocks involved. As such, this continues to weigh on Lake Resources shares.
Adding to the headwinds, the company is undertaking significant cost-cutting measures, including reducing its global workforce and selling three non-core lithium brine assets in Argentina.
These were settled for US$9 million, about 11% of the company's current market value.
Lake Resources chair Stu Crow attempted to extinguish the flames in his address at the AGM.
[R]ecent news on the lithium market has focused on the negatives – falling prices, reduced investment, projects being curtailed or put on care and maintenance. In such circumstances, you might ask why Lake should continue advancing our key project?
The simple answer is that the longer-term outlook remains bright. In mining, it is often said that the solution to low prices is low prices.
Most analysts point to falling supply and rising demand leading to supply deficits by the end of the decade
What's happening with the Kachi Project?
Crow touted Lake's flagship Kachi Project as "truly a tier-one project".
He said Kachi's mine life was 25 years, and the plan was to extract lithium sustainably via direct lithium extraction (DLE) technology.
The company recently completed a Definitive Feasibility Study, showing strong project economics, and submitted an Environmental Impact Assessment for production.
Plus, things might be looking up for the site if Crow's comments are anything to go by:
The maiden Ore Reserve announced for Kachi on 19 December last year showed the mine plan can deliver sufficient lithium brine for a 25 ktpa operation over the 25-year life of mine.
In another project milestone, Lake submitted in March 2024 the Production Environmental Impact Assessment for Kachi. It highlighted Kachi's minimal freshwater consumption and its significant economic and social benefits for our hosts, Catamarca Province.
These are significant achievements for our key project that we all should be proud of.
Despite these achievements, concerns about the near-term lithium oversupply and falling prices are overshadowing the project's potential.
As such, a reversal in lithium prices could act as a catalyst for Lake Resources' share price. Until then, the company is at the mercy of the market and demand for batteries and electric vehicles (EVs).
Foolish takeaway
The Lake Resources share price is in the red today following the company's AGM. Zooming out, lithium prices – and the drivers of these – continue to weigh the stock down heavily.
Shares in Lake Resources have fallen more than 70% over the past 12 months.
