LYC - Lynas Rare Earths
- Thread starter nioka
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Today's announcement. "proposed malaysian processing plant enhances Mt Weld rare earth projects"
Key points.
Proposed new location decreases project risk and offers enhansed project returns.
Malasyian "Strategic Pioneer Status" likely, with 10 year tax free period.
Excellent site identified with required infrastructure, public utilities and established manufacturers of key reagents
Chairman " The opportunity afforded by relocating to Malaysiais strategically and financially compelling. The financial benefit is of such a quantum that revision to our initial stratagy was essential.
I have been told ( Hope this isn't against your new rules Joe) by a very reliable source, that they have to be in mining production by mid 07.
Key points.
Proposed new location decreases project risk and offers enhansed project returns.
Malasyian "Strategic Pioneer Status" likely, with 10 year tax free period.
Excellent site identified with required infrastructure, public utilities and established manufacturers of key reagents
Chairman " The opportunity afforded by relocating to Malaysiais strategically and financially compelling. The financial benefit is of such a quantum that revision to our initial stratagy was essential.
I have been told ( Hope this isn't against your new rules Joe) by a very reliable source, that they have to be in mining production by mid 07.
Hi nioka
More info (not ramping) I have about LYC, hope it helps.
Mt. Weld’s Rare Earth deposits estimates 7.7 million tones @ 11.9% Rare Earth Oxides.Initial planned production is 10,500 tonnes p.a. to be increased to 15,000 tpa. $75 million through conv. notes and share placement were raised recently to fund the project.
Risk? key technologies may be superseded by technology that does not need Rare Earth elements. The global demand for Rare Earth oxides is at 100,000 tonnes per year, up 8% on last year. The company has potential to supply up to 25% of the world market.
Currently China produces 97% of global market and management has strong connections in China.
The company pays no dividend as all earnings go back into growth and exploration.
Demand forecast at 140,000 tonnes per year in 2010 and prices to US $12/kg by then.
More info (not ramping) I have about LYC, hope it helps.
Mt. Weld’s Rare Earth deposits estimates 7.7 million tones @ 11.9% Rare Earth Oxides.Initial planned production is 10,500 tonnes p.a. to be increased to 15,000 tpa. $75 million through conv. notes and share placement were raised recently to fund the project.
Risk? key technologies may be superseded by technology that does not need Rare Earth elements. The global demand for Rare Earth oxides is at 100,000 tonnes per year, up 8% on last year. The company has potential to supply up to 25% of the world market.
Currently China produces 97% of global market and management has strong connections in China.
The company pays no dividend as all earnings go back into growth and exploration.
Demand forecast at 140,000 tonnes per year in 2010 and prices to US $12/kg by then.
rub92me
Don't look back
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First: can some moderator move this thread please to Stocks I-P.
The way I read the announcement, the move to Malaysia is a bit of a mixed blessing:
Reduced project risk and better NPV, however 6 months delay in getting processing operational, which will defer the income.
Another potential threat to the success of this enterprise is existing stock piles (already mined) of rare earth in the US. Once the price goes high enough it may become economical to bring that on the market, which can be done quite quickly.
Another Australian small cap with (lower grade) rare earth prospects: ALK.
The way I read the announcement, the move to Malaysia is a bit of a mixed blessing:
Reduced project risk and better NPV, however 6 months delay in getting processing operational, which will defer the income.
Another potential threat to the success of this enterprise is existing stock piles (already mined) of rare earth in the US. Once the price goes high enough it may become economical to bring that on the market, which can be done quite quickly.
Another Australian small cap with (lower grade) rare earth prospects: ALK.
Lynas has been one of the successful stocks I hold for this year going from 15c at the start of the year to a years high of 50c today. 07 should be as kind with production due to start mid year. Not one for the day trader but I have found it a good investment.
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A bit of worry about the price patten. No news, but big price and volume rise in a thin trading environment. Typical stock manipulation patten. It is lucky that LYC has not get a speed ticket yet.nioka said:
I believe the long term fundamental is excellent, It is one of a very few producers for rare earth elements outside China, and the price is rising slowly but steady. Plus the rare metal resources.
'07 production?
it is my understanding mning avtivities will commence in early 07 but the ore will be stockpiled and mill operations will commence by mid 08, but the Taipei group feel it can get to over 3 bucks by summer so maybe an event such as early production will occur, myself i can`t see that price for this stock I`m looking at a cash flow range of 25 to 50 cents once production is full gear and dependant on pricing on today's prices 25 seems reasonable however a shortfall for rem`s is forecast so a good chance the price rises, at 25 cents cash flow however i see no reason the share price can`t double from here in 12 to 18 months....
I've owned shares only a short time, buying LYSCF at .43....that's the OTC symbol for LYC....I'm located in California in case anyone wonders....it is nice to find this forum, as I am interested in several other Oz stocks....SMM, MMN, ZFX, PDN, ROC, MTN, et al.....G'day...
it is my understanding mning avtivities will commence in early 07 but the ore will be stockpiled and mill operations will commence by mid 08, but the Taipei group feel it can get to over 3 bucks by summer so maybe an event such as early production will occur, myself i can`t see that price for this stock I`m looking at a cash flow range of 25 to 50 cents once production is full gear and dependant on pricing on today's prices 25 seems reasonable however a shortfall for rem`s is forecast so a good chance the price rises, at 25 cents cash flow however i see no reason the share price can`t double from here in 12 to 18 months....
I've owned shares only a short time, buying LYSCF at .43....that's the OTC symbol for LYC....I'm located in California in case anyone wonders....it is nice to find this forum, as I am interested in several other Oz stocks....SMM, MMN, ZFX, PDN, ROC, MTN, et al.....G'day...
Original arrangements were to mine the ore and ship to China for processing, which was to commence 07. The shift to Malasia necessitated the building of a new processing plant. This delayed eventual processing. I have been told that the conditions of the mining lease required a start to mining by a particular time, so the mining will commence and the ore stockpiled ready for processing at a later date. As LYC own the only sizeable deposits of rare earths outside China I believe this will be a good Company in my investment portfolio. I'm not expecting a sudden increase in SP but a reasonable one over time. ( It has already done that for me - over 100% in less that a year and increasing about 60% since I introduced it to this forum.)siempre33 said:
Welcome to ASF. I hope you find it as interesting and helpful as I have found it.
LYC has been able to steadly rise despite the fact that it's largest shareholder, Ospraie Management has sold around 3.5 million shares through the market in the last 3 weeks. If they keep selling it will not help but they are not flooding the market. When they stop selling we should get another spurt on. The shares are at an all time high and have good buyer support.
This looks to be a good longterm prospect. Just been reading through this thread and a couple of other places. Found a good stock watch report from my NAB trading info dated Dec 06. Some points I noted...
Management led by Nick Curtis (ex. Macquarie Bank & Sino Gold) also Jake Klein & David Davidson from Sino Gold with Curtis in particular holding a lot of LYC stock & options.
Global demand for rare earths expected to grow by 10% per annum while the worlds biggest producer (China) is having their exports restricted as well as losing VAT rebates and gaining a 10% tax. LYC are sitting in the wings as the only commercially viable deposit outside China and one of the lowest-cost producers in the world (though they haven't produced anything yet?).
Key action of the last 12mths for LYC is seen as the call to move the planned China plant to Malaysia which will save approx 27% in present costs, be tax free for 10yrs and have no restrictions on exporting. This has obviously pushed back production dates though the longterm benefits are sound.
Having transformed from a development phase into implementation they have already signed a longterm material supply contract with French chemical company Rhodia.
Looking at the charts... trading volume has picked up over the past year, last 6mths in particular and sp pushing up to it's all time highs of late '03 but there looks to be more substance to the climb now.
With all this going on the sp has climbed from .15 to .60 without the company actually producing anything. When Malaysia is fully operational (late '08), the China restrictions kicking in and overall market growth/demand LYC could be looking pretty good.
What do we reckon on timeframes? 18mths-2yrs? My guess is the sp will move gradually (in either direction) for the next while as the biggest changes have already happened until they are ready to produce & supply. That said, the entire resources sector will be interesting to watch over the next couple of years as there are no shortage of predictions about this sector.
One other thing... safety concerns. Rare earths are difficult and dangerous to mine. There is a history of environmental concerns around mining and production of rare earths (radiation etc.) and with a completely new operation being built any safety or environmental problems will no doubt dent investor confidence. People don't tend to forget radiation scares in developed countries!
Management led by Nick Curtis (ex. Macquarie Bank & Sino Gold) also Jake Klein & David Davidson from Sino Gold with Curtis in particular holding a lot of LYC stock & options.
Global demand for rare earths expected to grow by 10% per annum while the worlds biggest producer (China) is having their exports restricted as well as losing VAT rebates and gaining a 10% tax. LYC are sitting in the wings as the only commercially viable deposit outside China and one of the lowest-cost producers in the world (though they haven't produced anything yet?).
Key action of the last 12mths for LYC is seen as the call to move the planned China plant to Malaysia which will save approx 27% in present costs, be tax free for 10yrs and have no restrictions on exporting. This has obviously pushed back production dates though the longterm benefits are sound.
Having transformed from a development phase into implementation they have already signed a longterm material supply contract with French chemical company Rhodia.
Looking at the charts... trading volume has picked up over the past year, last 6mths in particular and sp pushing up to it's all time highs of late '03 but there looks to be more substance to the climb now.
With all this going on the sp has climbed from .15 to .60 without the company actually producing anything. When Malaysia is fully operational (late '08), the China restrictions kicking in and overall market growth/demand LYC could be looking pretty good.
What do we reckon on timeframes? 18mths-2yrs? My guess is the sp will move gradually (in either direction) for the next while as the biggest changes have already happened until they are ready to produce & supply. That said, the entire resources sector will be interesting to watch over the next couple of years as there are no shortage of predictions about this sector.
One other thing... safety concerns. Rare earths are difficult and dangerous to mine. There is a history of environmental concerns around mining and production of rare earths (radiation etc.) and with a completely new operation being built any safety or environmental problems will no doubt dent investor confidence. People don't tend to forget radiation scares in developed countries!
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HRL said:
HRL, thanks for the report. I believe LYC's deposit is belong to low radiation category.
Also, it has a huge deposit of RARE METAL group of minerals, could be huge potential after the production of RARE EARTH minerals.
The type of rare earths to be mined by LYC are not dangerously radioactive. The concentration and extraction will be carried out in Malaysia. (Rare earts occur as a component of monazite which is present in the mineral sands on most of our beaches; doesn't stop us enjoying the beaches.)HRL said:
They don't have the same problems as uranium have.
Ok thanks I wasn't sure. Being in the low radiation category kinda makes sense. I can't imagine Malaysia being so welcoming if they thought they could be on the nasty end of an enviro disaster!
Any thoughts on timing for this one? They have been exploring for years (14?) and nobody doubts the quality or quantity of their reserves but getting it to market is the key. They are clearly on the right track now and movement in the sp this past 12mths has been impressive but I don't see much more significant change until they are getting ready to produce... some further ann's about the deposits, production facility & supply deals will help of course but I expect the serious money will want to see the whole thing pull together efficiently before they jump on board.
Speaking of getting the goods to market... the geographical aspects of this company and it's biggest target market look great. Mining in Australia, producing in Malaysia with the vast majority of the technology manufacturing sector in Asia - all very warm & cosy. With rising transport costs only likely to keep heading north any companies that need to shift their cargo too far around the world will be bleeding through their walets.
Go LYC!! (and hurry up please
)
Any thoughts on timing for this one? They have been exploring for years (14?) and nobody doubts the quality or quantity of their reserves but getting it to market is the key. They are clearly on the right track now and movement in the sp this past 12mths has been impressive but I don't see much more significant change until they are getting ready to produce... some further ann's about the deposits, production facility & supply deals will help of course but I expect the serious money will want to see the whole thing pull together efficiently before they jump on board.
Speaking of getting the goods to market... the geographical aspects of this company and it's biggest target market look great. Mining in Australia, producing in Malaysia with the vast majority of the technology manufacturing sector in Asia - all very warm & cosy. With rising transport costs only likely to keep heading north any companies that need to shift their cargo too far around the world will be bleeding through their walets.
Go LYC!! (and hurry up please
)Processing product wiull not commence until 2H2008. The processing was originally to commence in China in 2H2007 but the move to Malaysia meant a processing plant had to be built. Hence the delay, although it will mean better returns in the long run.
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