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Kidman Resources Limitedâs (ASX:KDR) shares witness a dip of 2.439 percent on 31 October 2018 following the release of September quarter cash flow and activities report.
In the September quarter, Kidman Resources Limited announced the results of the Prefeasibility Study on the proposed Kwinana Lithium Refinery and updated the Scoping Study on the Mt Holland lithium Mine & Concentrator which was a major highlight in this quarter for the company. The results of the studies confirm that Covalent Lithium will be a low cost, an integrated producer of battery-grade lithium hydroxide for the high growth electric vehicle market and the studies demonstrated attractive economics and returns, with the clear potential to further optimize the cost structure and opportunities for local job creation.
The company also made an announcement regarding the funding term sheet with Kidmanâs joint venture partner in the Mt Holland Lithium Project, Sociedad Quimica y Minera de Chile S.A. (SQM) to provide Kidman with a US$100 million capital expenditure debt facility to partially fund Kidmanâs share of construction of the Mt Holland Lithium Project and US$10m facility of to fund Kidmanâs share of joint venture cash calls prior to the receipt of SQMâs outstanding milestone payments.Â
As the economic viability of building a Refinery as part of an integrated project has now been demonstrated, Kidman and SQM have agreed to streamline the separate studies for the Mine & Concentrator and Refinery into a consolidated PFS and Definitive Feasibility Study (DFS) for the entire Mount Holland Lithium Project. This will better reflect the integrated nature of the Mt Holland Lithium Project and its implementation and execution.
The company has made detailed submissions to the Minister for Mines and Petroleum (Western Australia) on 25 September 2018 following the Perth Mining Wardenâs recommendation to refuse applications for exemption from minimum expenditure obligations for tenements held by Kidman subsidiaries. The parties are currently going through a process of exchanging submissions according to the guidelines of the Department of Mines, Industry Regulation and Safety. The company is continuing its discussions with high-quality counterparties with regards to lithium hydroxide offtake agreements.
The net cash used in operating activities is A$2.1 million in September quarter of 2018 and the net cash flow from investing activities is $0.061 million. There was no cash flow transaction relating to the financing activities in Q1 of FY 2019. At the end of the quarter, the company was having cash and cash equivalent of $7.9 million.
In FY18, the revenue from continuing operations of the company reduced to $67,843 in FY18 from $92,636 in FY17. The net loss of the company reduced from $31.31m in FY17 to $9.68m in FY18. The net cash outflow from operating activities reduced from $8.94m in FY17 to $5.62m in FY18.
In the last six months, the share price of the company decreased by 48.10 percent as on 30 October 2018. KDRâs shares traded at $1.000 with a market capitalization of circa $408.52 million as on 31 October 2018 (AEST 4:00 PM).
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