It is my intention to be objective and not to sound negative, but I see plenty of reasons.
Macro/global stuff: Lithium prices down, poor results by big Lithium companies (Ganfeng, SQM, ALB), Junior lithium companies going out of business or in bad shape (A40, PLS, NMX, SYA), trade war, oversupply with lots of stockpile at converters for a while, low to negative margins in spodumene at present for many producers, manipulations by larger companies/financial institutions/big oil? to put smaller companies out of business, etc. The main positive for us being here is the next lithium boom, which will happen but the question is when? 1, 2, 5, 10 years? My feeling is that we have at least 1-2 years of more pain
Altura stuff: low cash and large debt at 15% interest of close to $30M/yr making it very difficult to remain cash flow positive at current prices/production while putting the company at risk of becoming the next A40 through a similar ambush by outsiders or its current partners. I recommend all to follow the A40 story, and specifically how GXY went from being a ally/investor to controlling A40’s debt and rendering A40 worthless with $0 value for its shareholders. I certainly don’t want this to happen to Altura and the company has a lot going for it to avoid this outcome. Unfortunately, the Market makes analogies among companies and it is currently attaching such risk/outcome to PLS, Altura and every junior spodumene company with low cash and high debt.
Altura has a lot going for it with 4 off takers, excellent product at >6% lithium, low costs, a small but positive margin at present and an excellent management/operations team. It has recently made great moves by solving the JRO fiasco, diversifying off takers and optimizing the operation. It is certainly in better shape than A40, whose costs exceed revenues. However, Altura is still at high risk due to its low cash, high debt due next year and current low margins, which makes Altura a target. In order to succeed, Altura needs to keep executing decisively and quickly. To me this means: keep improving production to achieve nameplate of 55k tons per quarter by not later than early 2020, keep high quality product, ship over 45k or 50k tons per quarter, keep reducing costs, use stockpile as needed to augment sales, etc.
More importantly, Altura needs to refinance/restructure/extend the debt with a Stage 2 partner(s). It is imperative that it makes a deal now with ShanShan or other larger company to take care of the debt issue so it does not blow in its face when it is due next year. This may mean obtaining funds from the partner and extending the financing period for several years. This will provide the much needed protection that Altura needs. Otherwise, I see a similar risk as A40, where your current allies become your foes. I had mentioned the possibility of a CR to get some funds, but it may be difficult at the current share price. I am still optimistic that Altura will survive these tough times and will succeed, but I am also cautious. Good luck to you and all here.
All the above is IMHO and DYOR
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