Liquidity Crunch Looms as Latitude 66 Faces Cash Burn and Pending JV Sale
Latitude 66 Ltd reported a significant quarterly cash outflow but has secured a $750,000 short-term loan linked to the pending sale of its Greater Duchess JV interest, aiming to sustain its exploration activities.
- Net cash outflow from operating activities of A$1.339 million for the quarter
- Cash reserves dropped to A$436,000 at quarter end
- Entered unsecured $750,000 short-term loan post-quarter related to Greater Duchess JV sale
- Plans to reduce expenditure next quarter to conserve cash
- Confident in funding future operations through sale proceeds and working capital
Quarterly Cash Flow Challenges
Latitude 66 Ltd’s latest quarterly cash flow report reveals a net cash outflow of A$1.339 million from operating activities, reflecting ongoing investment in exploration and corporate costs. This outflow has reduced the company’s cash and cash equivalents to just A$436,000 by the end of June 2025, highlighting liquidity pressures for the mining exploration entity.
Strategic Loan Secured
In response to tightening cash reserves, Latitude 66 secured an unsecured short-term loan of A$750,000 from Argonaut Partners Pty Ltd shortly after the quarter ended. This loan is directly linked to the company’s planned sale of its 17.5% interest in the Greater Duchess Joint Venture (JV), a non-core asset. The loan carries a 1% monthly interest rate starting October 2025 and includes an establishment fee of A$30,000, with repayment terms tied to the completion or termination of the JV sale agreement.
Operational Outlook and Funding Strategy
Latitude 66 anticipates reducing its expenditure in the upcoming quarter to stretch its available funds, with exploration activities to be carefully targeted and cost-effective. The company’s management expressed confidence that the proceeds from the Greater Duchess JV sale, combined with working capital, will support ongoing operations. Should additional funding be necessary, the board believes it can secure further capital through future financing options.
Focus on Core Assets
The sale of the Greater Duchess JV interest signals a strategic shift to concentrate resources on Latitude 66’s Finnish and Western Australian projects. This move aims to streamline the company’s portfolio and bolster its financial position without diluting shareholder value. Investors will be watching closely for the completion of the sale and how effectively the company manages its reduced cash runway.
Looking Ahead
While Latitude 66 faces short-term liquidity challenges, the combination of asset sales and prudent cost management could stabilize its financial footing. The next quarter will be critical in demonstrating whether the company can maintain momentum in its exploration programs while navigating funding constraints.
Bottom Line?
Latitude 66’s near-term survival hinges on the timely completion of its JV sale and disciplined spending amid tight cash reserves.
Questions in the middle?
- When will the Greater Duchess JV sale be finalized, and what are the exact terms?
- How will reduced expenditure impact the pace and scope of exploration activities?
- What are the company’s contingency plans if additional funding cannot be secured?