ILU - Iluka Resources

rcw1 said:

Good morning
quarterly published today (22/10/24) see attached.

Citi analyst Paul McTaggart has been reported via New Corp Media outlets, that Iluka Resources production report was “disappointing” with revenue “well short” no update on its Eneabba refinery funding and softening price guidance.

3Q mineral sands revenue was $232m versus his $306m forecast. Zircon, rutile and synthetic rutile sales were “just” 97,000 tonnes, with 59,000 tonnes of zircon including 24,000 of lower grade zircon.
3Q realised zircon prices fell 7 per cent on-quarter and synthetic rutile fell 1 per cent. Overall unit revenue for Z/R/SR fell 4 per cent on quarter and 4Q zircon sales are expected to be impacted by seasonal weakness with prices expected to fall US$40-$50 a tonne.

Not holding

EDIT

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Kind regards
rcw1

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qldfrog said:

Another tty at 5.5 i reckon..had to be a long term optimistic on this one.
Do they have anything to cut and sell or will they need a cap raising,?

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divs4ever said:

from memory , WES tried to take over LYC a few years back , MAYBE , WES might invest some capital into the REE processing plant

( i hold WES )

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rcw1 said:

Good afternoon divs4ever
Yes that is very true, about WES and LYC. Good pick up. Not sure of WES’s appetite for that at present though.

Hafta have a good look at scoping of ILUs finances.

Kindcregsrds
rcw

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finicky said:

Market Matters advising on Iluka today.
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Iluka Resources (ILU) $5.98

ILU fell 3.55% on Tuesday after delivering a disappointing third-quarter result: mineral sands revenue of $232mn fell well short of expectations of ~$300 million, while sales were a 26% miss. This is down 32% in Q2, translating that year-to-date revenue is now down 10% on this period last year. Also heading in the wrong direction are Iluka’s costs, it reported a 50.4% YoY increase in unit cash production costs per tonne – not a great combination. Considering that the fourth quarter is usually weaker from a seasonal perspective, the resulting 3.55% fall in the stock on a very weak day wasn’t too bad, although the shares have more than halved from their 2023 high. As we discussed in recent weeks, ILU is a great proxy for a turnaround in the Chinese economy, especially the property market – in 2023, over 30% of ILU’s revenue was derived from China. Iluka is a leading producer of zircon, primarily used in ceramic floor and wall tiles and high-grade titanium dioxide feedstocks (rutile and synthetic rutile) used in paints, hence the obvious correlation to China’s weak property market. However, the company is looking to add another major string to its bow via the company’s development of Australia’s first fully integrated rare earth refinery at Eneabba, in Western Australia, with ILU set to become a global material supplier of separated rare earth oxides. However, at the moment, ILU is tied up in a political game with the government around the funding of this rare earths project, with no update on Eneabba refinery funding forthcoming yesterday. ILU has threatened to halt their rare earth refinery development unless the Albanese government caves in on funding. The government and ILU have been at a stalemate for about nine months over additional funding on top of a $1.25 billion limited recourse loan from Export Finance Australia issued by the Morrison government. Labour is undertaking a “robust and rigorous” assessment of the project, with next year’s election likely a factor. We believe this project will likely proceed at some point, but for now, we’re focusing on ILU’s valuation from its traditional revenue streams. China’s demand for ceramics remains subdued, and the global pigment market and European zircon demand are stable heading into the seasonally slower northern hemisphere winter. Like many companies in the ASX Materials Sector, ILU will improve with a strong economy, which is what bond markets are foreseeing into 2025, although China is the obvious wildcard. We like the risk/reward towards ILU into further weakness but the downside momentum feels entrenched short-term.

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• Iluka (ILU) -7.89% is a leverage play on China, and disappointment about the size of China stimulus hit them hard today, a recent purchase in our Active Growth Portfolio is now back testing 52 week lows. We will give it a little more room but will cut if it doesn’t improve from here.

finicky said:

Didn't confirm yesterday. Fairly strong bounce today against backdrop of a down day for materials and the ASX 200. Back up above recent support. Hard to say now, although bigger picture not greatly improved by this. I'm on the fence - was expecting it to fall.

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DAILY
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• Iluka Rated New Buy at Ord Minnett; PT A$6.30

Iluka celebrates funding win​

finicky said:

Iluka celebrates funding win​

"Iluka Resources is partnering with the Federal Government to deliver its Eneabba rare earths refinery in Western Australia.

The partnership aligns with the government’s ‘Future Made in Australia’ agenda, supporting the achievement of policy objectives related to supply chain resilience and facilitating an Australian rare earths industry.
Iluka concluded the refinery’s front-end engineering and design back in December 2023, announcing an increase in the capital cost to $1.7–1.8 billion.
This funding gap has been the topic of discussion between Iluka and the Federal Government throughout 2024.
Now, the Federal Government has agreed to contribute an additional $400 million, with Iluka contributing another $214 million cash equity.

The funding is conditional to securing offtake agreements the Federal Government deems satisfactory and delivering positive outcomes in line with the Future Made in Australia plan.

“We expect the Eneabba refinery to deliver substantial, sustainable value over several decades – that is why Iluka is investing significant shareholder funds in this opportunity,” Iluka managing director Tom O’Leary said.

“This is a strategic infrastructure asset that puts Iluka and Australia at the forefront of global electrification, the creation of new and resilient critical minerals supply chains, and the establishment of a rare earths industry that is genuinely independent.”

Iluka celebrates funding win

Iluka Resources is partnering with the Federal Government to deliver its Eneabba rare earths refinery in Western Australia.

www.australianmining.com.au

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mullokintyre said:

And yet the SP is down 11 % on the news.
perhaps because the wording means that the government can veto any export to China which is the reason for having the plant in the first place - we have seen how China will impose tariffs and other bull**** scenarios to block beef, coal lobsters, wine etc.
I have taken a small piece of the action to keep in the bottom drawer.
Mick

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• Iluka (ILU) -6.9% hit after reporting a weaker than hoped December quarter, though volumes are improving.

finicky said:

Market Matters afternoon report:

• Iluka (ILU) -6.9% hit after reporting a weaker than hoped December quarter, though volumes are improving.

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