The $28m capital raising took place at a -13% discount to the previous close and should allow for the final drawdown of debt to fund Lake Way. Nevertheless, the company’s cost expectations have increased by 16%, a material amount in Macquarie’s view.
Regardless, Lake Way presents a strong long-term investment case that the broker believes should enable the company to progressively develop other salt lakes within the portfolio. Outperform maintained. Target is reduced to $0.65 from $0.80.
Sector: Materials.
Target price is $0.65.Current Price is $0.37. Difference: $0.28 – (brackets indicate current price is over target). If SO4 meets the Macquarie target it will return approximately 43% (excluding dividends, fees and charges – negative figures indicate an expected loss).
