Citigroup expresses optimism about the debt plan of Mineral Resources, worth 850 million dollars, stating that the debt raise provides time and more flexibility around lithium consolidation at Yilgarn Craton.

The company, earlier this week, declared intentions to offer up to 850 million dollars in senior unsecured notes, although, the details of this plan were not revealed.

At the end of FY23, Mineral Resources recorded a debt of 2.917 billion Australian dollars.

Citigroup is predicting a return to cash in CY27 with a projected debt of 3.3 billion Australian dollars at the end of FY24.

The bank also adjusted its EBITDA estimates, cutting them down by 11% for FY24 due to lower lithium prices, while keeping the Target Price at 79 Australian dollars per share.

Market analysts' average rating for the company is equivalent to ‘buy’, with a median Price Target of 77.9 Australian dollars according to LSEG data.

The company’s stock has seen a 13% drop this year until the latest closing.

Mineral Resources is an Australian-based mining services and processing company.