ASX News Live | ASX Closes 1.23% Down on Friday

Lithium developer Lake Resources (ASX:LKE) released its FY22 statutory accounts late on Friday afternoon.

LKE ended FY22 with $175.4 million in cash and cash equivalents, with no debt. The lithium junior recorded a net loss of $5.6 million, up from a net loss of $2.9 million in FY21.

LKE said some of its cash holdings are in Argentinian pesos. Lake acknowledged the “hyper inflationary” pressures faced by Argentina, home to its flagship Kachi Project.

“Hyper inflationary in Argentina pressures for appropriately skilled labour and capital items are being seen across many
industries, including mining. Current domestic and international inflation is at levels not since the 1970’s and 1980’s,
triggering rising interest rates globally; a situation that has been driven by post pandemic issues and by spiking energy
prices, triggered by the recent conflict between Ukraine and Russia.”

LKE stayed mum on its dispute with Lilac Solutions regarding performance timelines.

Commentating on matters subsequent to the end of FY22, LKE rehashed information already out in the market:

“Whilst work has continued on the Kachi project, a dispute has arisen between Lake and Lilac as to the date by which key
performance milestones need to be achieved, with Lake considering milestones to be achieved by 30 September 2022 and Lilac considering it has until 30 November 2022 to do so. To resolve the dispute, Lake has exercised its rights to have the dispute resolved either by agreement of both Lake and Lilac or by arbitration.”

No update was given whether Lake and Lilac struck a new agreement or entered arbitration.

LKE: chance of obtaining investment partner 100%

As part of its remuneration and performance rights disclosures, Lake divulged that the chance of obtaining an investment partner for its Kachi project has increased to “100% probability”. LKE previously pinned the probability at 5%:

“Mr Crow’s 5 million performance rights vest dependent upon an investment partner signing an agreement to invest in the Kachi project in Catamarca (Investor). At 30 June 2020 the probability of obtaining an investment partner was assessed at 5%. It has been confirmed that the project will be funded 70% by international credit agencies sourced by SD Capital and GKB Ventures, with the remainder being provided by equity. It is now considered extremely likely that the vesting condition will be achieved, hence an increase to 100% probability was disclosed at 30 June 2022.”

Extremely likely is not the same as guaranteed. Nonetheless, it didn’t stop Lake ascribing a 100% probability to the outcome.

 

The ASX 200 ended 1.23% down on Friday, finishing the week 1.5% lower.

The benchmark index fell 5.43% in September.

The worst performances on Friday:

• Carsales.com (ASX:CAR), down 7.8%
• Cochlear (ASX:COH), down 6.6%
• Pro Medicus (ASX:PME), down 5.6
• Wisetech Global (ASX:WTC), down 5.6%
• Pointsbet (ASX:PBH), down 5.6%

 

A data hack affecting 9.8 million customers and hitting Australia’s second-largest telco.

The data breech is grave enough. But what about the consequences?

For Optus, for its customers, and the broader corporate world?

Much of our world is run by a tacit agreement between customers entrusting their personal data with companies who in turn facilitate countless services.

The presumption was the data would be secure. Businesses provide services but also safeguard our data as responsible custodians.

That assumption is now disintegrating under the spotlight of the Optus hack.

Writing for the Australian Financial Review, Paul Smith and John Davidson explore how the Optus data breach will change corporate Australia.

“For years, business leaders have been talking of data as the “new oil”, hoovering up all they can into “big data” systems to be mined for any commercial advantage possible. But now they may be forced to dispose of what they don’t need, or fined more punitively if they misuse or lose what they have.”

The Australian Competition & Consumer Commission wants to canvass further views on the proposed network deal between telco giants Telstra (ASX:TPG) and TPG.

ACCC Commissioner Liza Carver said the regulator is calling for more industry and consumer feedback on how the proposed deal will ‘impact competition and whether there are public benefits.’

The ACCC is investigating a proposed regional deal between Telstra and TPG.

The telco pair is asking the ACCC to authorisation the acquisition of certain TPG spectrum assets.

Under the proposed deal, Telstra would obtain much of TPG’s mobile spectrum in outer-suburban and regional areas, affecting 17% of the Australian population.

Telstra would also receive 169 of TPG’s mobile sites in that area.

In turn, TPG will shut down 556 mobile sites in the affected areas, acquiring mobile network services from Telstra for mobile coverage.

Liza Carver, ACCC Commissioner, outlined the scope of ACCC’s concerns:

“The ACCC has today set out issues for further consideration, and is calling for further views from industry and consumers on how these agreements may impact competition and whether there are public benefits.

Mobile companies compete in terms of the infrastructure and spectrum they have, as the infrastructure and spectrum impacts on coverage and speed which are important to customers. We are assessing how the proposed infrastructure and spectrum arrangements between TPG and Telstra will change the incentives and ability of Telstra, TPG, Optus, and other market participants to compete and to invest in mobile service infrastructure.”

Telstra, TPG deal: ‘a lot of work to do’

Interestingly, the ACCC commissioner emphasised that the regulator’s review of the proposed network deal was complicated and nuanced.

The commissioner also admitted the ACCC has not reached any overall conclusions, warning that a decision either way can have ‘significant long-term effects’:

“There is still a lot of work to do on this complicated and nuanced review, which is of critical importance to competition in the mobile telecommunication sector. At this stage we have not reached any overall conclusions, but welcome further submissions from stakeholders and consumers alike on the issues raised.

“We are looking extremely closely at all aspects of these agreements, as a decision either way can have significant long-term effects.”

The ACCC’s decision will be announced in early December.

You can read the ACCC’s preliminary views on the deal in full here.

Vs, 3D-printed houses, automated homes, and ultra-efficient renewable energy power generators are just some of the future innovations leading us to a better, cleaner world.

And with the stroke of a pen, governments across the globe have started this carbon-free, pollution-free, automated utopia we all want.

Yet, there is one KEY factor that environmentalists, leaders, CEOs, and celebrities have left out…

How do we get the raw materials to build this multitrillion-dollar dreamland?

A transition nightmare awaits as we move from carbon to renewable energy

Knowing whether the world can actually supply the critical metals needed to fuel the ‘green revolution’ would be a logical first step before going about an ambitious carbon reduction policy.

Can we actually get enough stuff out of the ground to build the replacement technology?

This is not a question on the radar of politicians, climate scientists, or advocates pushing change.

Commodity experts were not invited to the Paris or Glasgow climate summits.

It was a decision reserved for governments and climate scientists.

Yet the main limiting factor for all this policy-driven change is the availability of raw materials.

The minerals needed to build wind farms, solar panels, batteries, EVs.

Policymakers have made BIG assumptions that resources will be available.

They’re relying on old economic rules of supply and demand.

Create demand for critical metals and the supply will invariably arrive.

Basic economic theory to them.

However, by pushing this market philosophy onto a finite resource like critical minerals, the demand side of the equation starts to levitate precariously upward.

Supply of critical metals is not a straightforward process of increasing production as it would be for iron ore mining.

To meet spectacular demand for critical metals requires vast global investment to drive exploration.

Then, assuming exploration is successful…

It would require enormous global capital to build sophisticated processing facilities to extract critical metals from ore.

Again, this process requires far more infrastructure and technology than the relatively straightforward method of iron ore processing.

What does all this mean for commodity investors?

https://www.dailyreckoning.com.au/part-one-critically-endangered-metals/2022/09/29/

While September comes to a close, Lake Resources’ dispute with Lilac drags on.

Earlier this month, LKE revealed a quarrel with its direct lithium extraction technology partner Lilac Solutions over timelines.

To earn in a 25% stake in LKE’s Kachi Project in Argentina, Lilac needed to achieve certain milestones by an agreed date.

Lake thought that date was today, 30 September.

Lilac thought otherwise, arguing 30 November was the deadline.

Lake said it exercised its right to have the dispute settled either via a new agreement or arbitration.

But the market has not heard news of a new agreement or whether the pair entered arbitration.

If LKE’s 30 September deadline holds, then it has “certain buy back rights” it may exercise.

Now, if Lilac thought it had, or needed, until 30 November to meet its milestones, it’s unlikely Lilac achieves them by the end of today.

So where do things stand?

Lake thinks today is deadline day, which Lilac disputes. Lilac has every incentive to disagree — it stands to lose lucrative earn in rights. So any amicable revision to the agreement which, in LKE’s eyes, featured today as the deadline, must involve Lake budging.

But Lake also has incentives not to budge. It stands to gain a bigger equity stake in its Kachi Project.

Is arbitration the only way out?

Who knows, but LKE is likely to update the market on the matter soon.

While September concludes, $LKE's dispute with Lilac continues.

To earn in a 25% stake in Kachi, Lilac needed to achieve certain milestones by an agreed date.$LKE thought that date was today, 30 September.

Lilac thought otherwise, arguing 30 November was the deadline.

— Fat Tail Daily (@FatTailDaily) September 30, 2022

As the UK’s economic meltdown continues, investors need to ask, who is next?

The risk of this monetary contagion spreading is now a very real problem. Europe knows all too well how quickly one nation’s problem can become a region-wide issue.

As I explained in yesterday’s Money Morning, though, the one silver lining is that the Brits at least have options this time around. Bitcoin [BTC] and other cryptocurrencies provide an alternative way to hold onto wealth as the UK government and Bank of England (BoE) set about destroying it…

That’s why bitcoin purchases in pounds are soaring as of late. And if more central bankers follow in the UK’s footsteps, don’t be surprised if we see other nations follow suit.

As billionaire investor Stanley Druckenmiller commented on the BoE’s moves:

‘It’s tough for me to own anything like that [bitcoin] with central banks tightening. I still think if the Bank of England what they did is followed by other central banks in the next two or three years if things get really bad, I could see cryptocurrency having a big role in a renaissance because people just aren’t going to trust the central banks.’

For long-time crypto followers, this insight is hardly any startling revelation.

The whole point of bitcoin is that it was designed to be an answer to the central bank incompetence that led to the ‘08 crash. That’s why we need it, and that’s why bitcoin will always be relevant.

Adoption all around the world

The biggest surprise this week for bitcoin, in my view anyway, is how adoption continues to grow.

In the US, we’re seeing more ‘buy-the-dip’ mentality from some big Wall Street names. Fidelity’s Wise Origin Index Fund, for example, recently declared it had purchased a further US$62.84 million worth of bitcoin.

That’s a great sign for investors that a lot of the big money is still keeping a close eye on crypto. Not to mention the fact that a lot of the bigger institutions may never fully document how much they’re buying or selling.

Even more impressive than this is the growing use of bitcoin in Sub-Saharan Africa. Because while the transactions aren’t moving huge sums, it is showcasing how valuable cryptocurrencies can be for less stable monetary regions.

As a Chainalysis report notes on the boom:

‘Our interviews suggest that this reflects the trend of many young people in Sub-Saharan Africa turning to cryptocurrency as a way to preserve and build wealth in spite of low economic opportunity, as opposed to other countries where we see many using cryptocurrency as a way to multiply their existing wealth.

‘Adedeji Owonibi, founder of Nigeria-based blockchain consultancy and product studio Convexity, told us more about this dynamic. “We see a lot of daily traders who are trading to make ends meet,” he said. “We don’t have big, institutional-level traders in Sub-Saharan Africa. The people driving the market here are retail. Nigeria has a ton of highly educated young graduates with high unemployment rates, no jobs available — crypto to them is a rescue. It’s a way to feed their family and solve their daily financial needs.”’

If you’re a bitcoin maximalist, this is the kind of development you really want to see.

https://www.moneymorning.com.au/20220930/from-wall-street-to-sub-saharan-africa-bitcoin-is-on-the-rise.html

Lithium developer Core Lithium (ASX:CXO) will tap the market for $100 million via an institutional placement to accelerate work at its Finniss Lithium Project.

CXO will issue 97.1 million new fully paid ordinary shares at an offer price of $1.03 per share, representing a 6.8% discount to CXO’s last closing price.

Core said the capital injection will facilitate the pursuit of “new and aggressive exploration programs designed to rapidly grow ore reserves and mineral resources through extensional and resource definition drilling.”

CXO said the $100 million will be divvied up the following way:

• “Accelerated Resource definition, extensional and exploration drilling, with a budget of A$25 million planned for calendar year 2023;

• “Advancing development of the proposed BP33 underground mine by investment in early works, previously funded out of cash flows;

• “Introducing a night shift to facilitate an accelerated commissioning of the Finniss concentrator;

• “Enhancing Core’s project management and corporate development capabilities; and

• “Working capital during completion of construction and ramp-up”

Meta Platforms — parent company of Facebook — told employees it will freeze hiring and implement cost-cutting measures.

Meta CEO Mark Zuckerberg told staff of the freezes during one of his regular weekly all-hands meetings.

In a follow-up note, Meta’s head of people Lori Goler said the tech giant’s 2023 budget will be “very tight”.

Fellow tech whale Alphabet — parent of Google — announced it has also slowed hiring and retrenched some projects.

Meta shares are down 60% year to date. Alphabet shares are down 30%.

 

The All Ords is currently down 0.8% and 15% year to date.

The worst performers on the All Ords this morning:

• 5E Advanced Materials (ASX:5EA), down 14%
• Energy Resources of Australia (ASX:ERA), down 9%
• Healthia (ASX:HLA), down 8%
• Volpara Health Technologies (ASX:VHT), down 7%
• Nick Scali (ASX:NCK), down 6.8%
• Redbubble (ASX:RBL), down 6.5%
• Pointsbet (ASX:PBH), down 5.8%
• Syrah Resources (ASX:SYR), down 5.6%

 

The S&P 500 closed at a new low for the year overnight while US Treasury yields hit some of their highest levels of 2022.

Senior portfolio manager of Bermont Gold Wealth Advisory told the Wall Street Journal the volatility seen on Wall Street in recent weeks has been “quite breathtaking.”

Overnight, the S&P 500 fell 2.1%. The Dow Jones Industrial Average fell 1.5%. And the tech-laden Nasdaq tumbled 2.8%.

The benchmark 10-year US Treasury note yield at one stage climbed above 4% for the first time in more than a decade.

It currently sits at around 3.79%.