UPS Reddit Mentions | ChartExchange

TLDR: LTR is now a profitable lithium producer with $561m cash against \~$369m of debt (mostly the ford loan), so \~$192m net cash. It's hit pretty much every milestone they've set, and is now ramping underground mining from 1.5Mtpa to 2.8Mtpa this year. Share price dropping from $2.65 to \~$1.00 is entirely due to lower carbonate prices
**my hypothesis:** I think carbonate at this level isn't a long term thing, outside of increased Chinese inventories, in my mind, the demand will outweigh the supply, data centers need batteries for UPS, EV car sales will increase when the world has money again, house batteries follow EV car sales, solar panels are cheap as shit (compared to 10-20 years ago), and if FY28 lands where I think it does, LTR won't be such a boutique miner... $$$
everyone's lining up to ask PLS out, but LTR is like her less hot friend nobody pays attention to because they aren't as popular.. yet...
[Cadina $Lithium SC6 prices$ is the femslash ship between Cady Heron $LTR$ and Regina George $PLS$](https://preview.redd.it/8i14cvzt1erh1.png?width=854&format=png&auto=webp&s=dc8aeec0e7991ad5c63d1188ea18424ec0b106c3)
# Dip or re-rate?
my heavenly inspiration, Mr Dips wrote a good post a while back about dips vs re-rates. TLDR; a dip is when the price drops but the business hasn't changed, a re-rate is when the business actually changes... zoom out on LTR and you will find out what happened:
* in the last 12 months the share price is down about 60% from the high
* carbonate is down about 34% from its high
* in that same time the company went from $567m net debt to $192m net cash, posted its first ever profit, hit all of its FY26 guidance and finished moving the mine fully underground
* the chairman also bought another 1m shares on market at around $1.22 earlier this month
The business hit all milestones but the share price went down??? well, the only thing that actually got worse was the stuff they get out of the ground, the lithium price
# They make money now, let's crystal ball a bit here...
Making money is the most important thing a company can do... FY26 was the first year LTR actually turned profitable
* sales: $639m, more than double last year (115%)
* cash from operations: $182m came in the door
* profit: $14m
the reported profit is $93m, but most of that is an accounting thing (they got to count past losses as a future tax discount), so it's not real, $14m is the real number. but it's their first ever year in the green, and ahead of schedule (most brokers thought this wasn't going to happen until Q1 FY27)
**quarterly trend results (FY26)**
||Q1 Sep-25|Q2 Dec-25|Q3 Mar-26|Q4 Jun-26|FY26|
|:-|:-|:-|:-|:-|:-|
|concentrate produced (dmt)|87,172|105,342|96,367|103,111|391,992|
|concentrate sold (dmt)|77,474|112,122|83,912|108,489|381,997|
|realised price (US$/dmt SC6e)|691|985|1,845|1,880|1,379|
|underground ore mined (kt)|225|308|402|356|1,291|
|underground development (m)|1,824|2,142|2,455|3,316|9,737|
|revenue (A$m)|207.5 (H1)||197|235|639|
|unit cost FOB (A$/dmt)|985 (H1)||981|995|987|
|cash at quarter end (A$m)|||424|561|561|
**FY27 up-ramp**
guidance is 390-440kt of concentrate, unit costs of $1,050-1,250/t and $320-370m of capex
They held 1.5Mtpa through the September quarter, step up from December, and are targetting 2.8Mtpa by the end of FY27
The underground fleet goes from 21 to 41 units
Once the dirty open pit stockpile is gone recoveries should lift too, since clean underground ore was doing \~70% vs 63% blended.
FY26 full-year results presentation: CEO telling the story of FY27 is all about ramp up since they finally made some revenue they don't need to act in survival mode anymore
# what FY28 could look like...
**ASX Lithium peers:**
||rough output (SC6)|cost per SC6 tonne (US$, FOB)|what it needs|
|:-|:-|:-|:-|
|PLS (FY27 guide)|\~920kt|\~$470–510|already at scale|
|ELV (FY27 guide)|\~175kt|\~$1,015–1,095|NAL expansion still in studies|
|LTR (FY27 guide)|\~350kt|\~$880–1,040|spending year, fleet doubling|
|LTR expected FY28|\~415kt|\~$810|2.8Mt for a full year|
^((assuming 5.0% concentrate grade from FY26))
**FY28:**
||bad|expected|good|
|:-|:-|:-|:-|
|SC6 price (US$/t)|1,200|1,700|2,300|
|tonnes sold (kt)|450|500|550|
|unit cost (A$/dmt)|1,150|950|850|
|revenue (A$m)|\~620|\~1,010|\~1,500|
|EBITDA (A$m)|\~30|\~440|\~900|
|EV/EBITDA today|\~break-even|\~7x|\~3.4x|
* LTR's cash cost breakeven is around US$850-1,040/t depending on where FY27 costs land, but the number that actually matters is closer to US$1,450, that's the price where the business is fully funding its own growth capex
* **Spodumene was at US$2,254/t on 2 Sep. plenty of room, but worth knowing where the floor is**
To be taken with a grain of salt: Fastmarkets prediction, LTR will be in a great position at FY28, supply gap looks to be astronomical beyond FY29
[source: FY26 full-year results presentation](https://preview.redd.it/24zqfublydrh1.png?width=2346&format=png&auto=webp&s=45c4d38bb5f55994d9eecd51b8b1fa432a916d25)
# Catalysts coming up
* cheap exposure to Argentine brine via farm-in
* **FID on the 4.0Mtpa expansion, end of Sep**
* FID at end of Sep is for the next leg, 2.8 to 4.0Mtpa (\~700ktpa target), nothing else to watch here, construction timeline gets disclosed along with the FID approval
* (target of **over 700ktpa SC6**)
* September quarterly on 30th Oct, first price print since carbonate dropped
* AGM on 26th of Nov
* December quarterly (late Jan est.), measurable progress shown from the ramp-up
* June quarterly (late Jul est.), the 2.8Mtpa test
FY26: 1.5Mtpa
FY27: ramp up, 2.8Mtpa
FY28: 2.8Mtpa
**FY29? Awaiting September 30th FID 4Mtpa**
# The elephant in the room: lithium price
This is the main downside. China carbonate is at CNY135k, down \~15% in a month and \~34% from the may highs, but still up \~83% on a year ago. mainly due to chinese inventories had more than initially reported and other Australian mines (bald hill, finniss) restarting, and EV sales slowing globally
[https:\/\/tradingeconomics.com\/commodity\/lithium](https://preview.redd.it/oc6284r2qdrh1.png?width=1929&format=png&auto=webp&s=52436b702822be1a8202822101c1f1e5296d2a83)
**Risks**
* lithium price, obviously
* FY27 costs going up before scale kicks in
* capex is heavy, expansion capex isnt sized yet, and ford loan repayments start 30th Sep on \~$316m
* tax right-offs are probably finished
* execution on the ramp, 7 new mine levels and doubling the fleet
* smaller stuff: a shipment dispute (provisioned in the accounts), some deferred shipments, and the safety numbers went backwards (not a good sign for a company just about to ramp up and try and meet deadlines)
* sodium batteries have a potential application in environments that are fixed and do not have space requirements
# Terminus.
if you think carbonate stays at CNY135k forever... boo, you whore!
disclosure: fully leverage a loan, put all your money in. not financial advice.