Lunnon Metals (LM8) H2 2024 earnings summary

Executive summary

• Mineral Resources increased 29.4% year-over-year to 4.2Mt at 2.7% Ni for 113,600t contained nickel, with first-time resources at Fisher, Silver Lake, and East Trough, and significant growth at Baker and Foster South.

• FY2024 saw a strategic pivot due to nickel price weakness: nickel exploration was curtailed, workforce reduced, and focus shifted to near-surface gold exploration, with promising early results at Lady Herial, Plentiful, and Hustler.

• Cash and equivalents at 30 June 2024 were $21.9M, up from $19.5M, supported by $17.5M in new equity raised.

• All regulatory approvals for mining at Baker and Foster have been secured, positioning the company for rapid response to improved market conditions.

Financial highlights

• Net loss for FY2024 was $24.1M (FY2023: $17.7M), including a $12.6M impairment to exploration assets due to nickel price decline and suspended drilling.

• Exploration and evaluation expensed increased to $6.5M (FY2023: $5.3M), while capitalised exploration decreased to $24.2M (FY2023: $33.6M) after impairment.

• Cash flow from operations was negative $11.3M, with $3.8M used in investing and $17.5M raised from financing activities.

• Net assets at year-end were $46.4M (FY2023: $51.9M).

Outlook and guidance

• No new surface nickel drilling planned in the short to medium term; focus remains on extracting value from existing data and progressing gold exploration.

• FY2025 will see completion of the Baker and Foster PFS, continued gold exploration at high-priority prospects, and ongoing evaluation of processing options for nickel.

• The company remains flexible to adapt to changing market conditions, especially regarding nickel sentiment.