LTR reported a maiden positive Ebitda of A$65.0m for the 1HFY25. The company ended the period with cash of A$192.9m, leaving it well funded through the ramp up at Kathleen Valley. The operational performance metrics are improving, with plant availability and recovery up to 92% and 59% in December, respectively, while underground development metres have stabalised around 1.9km/quarter. LTR expects lithia recoveries to continue to rise towards 70% by early 2026 and noted that underground development rates are ahead of the 300m/month target. LTR has built a large inventory of ore and concentrate that will aid cash generation in the 2HFY25. We make only modest changes to our outlook after incorporating the 1HFY25 result and reiterate our BUY rating, trimming our price target 8% to A$1.10 due to declines in spodumene spot prices. We estimate that a spot price of US$950/t would enable LTR to generate positive free cash flow in FY26.
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