LYC - Lynas Rare Earths

[lucifuge]

Amazes me LYC dropped around 26% today. I took the news to be somewhat positive. People have different takes I guess. Great opportunity to top up, so I did.

 

[skyQuake]

Amazes me LYC dropped around 26% today. I took the news to be somewhat positive. People have different takes I guess. Great opportunity to top up, so I did.

Its ex-rights today so its only down around 1% today. (TERP 67.5c)
Morning dip was beautiful buying opp

 

[TheAbyss]

Its ex-rights today so its only down around 1% today. (TERP 67.5c)
Morning dip was beautiful buying opp

Usually a share price will align to the capital raising price which was 45 cents.

Hope it doesn't for those who bought pre cap raising however i would anticipate it going a lot closer to the 45-50 cent range unless another Chinese offer eventuates before holders lose patience.

LYC did have to do something once the Chinese bid was scuttled by FIRB requirements as they were pretty desperate for some cash. Remember they were 40-43 cents per share prior to the Chinese announcement which is now off the table so they have managed to complete the institutional cap raising at a premium to that at least so not looking to bad.

The Chinese bid was 36 cents so holders are actually 9 cents a share better off as far as a floor price being set for the SP plus it is fully Australian owned for a while at least.

Be interesting to see whether Nick Curtis takes up his full entitlement or not (around $12 million or so required if he does). That should be telling for investors imo.

Bottom line is i would expect to see an entry price of 45-50 cents during the retail entitlement period (7th-23rd October)

 

[skyQuake]

Usually a share price will align to the capital raising price which was 45 cents.

Hope it doesn't for those who bought pre cap raising however i would anticipate it going a lot closer to the 45-50 cent range unless another Chinese offer eventuates before holders lose patience.

LYC did have to do something once the Chinese bid was scuttled by FIRB requirements as they were pretty desperate for some cash. Remember they were 40-43 cents per share prior to the Chinese announcement which is now off the table so they have managed to complete the institutional cap raising at a premium to that at least so not looking to bad.

Bottom line is i would expect to see an entry price of 45-50 cents during the retail entitlement period (7th-23rd October)

Not necessarily the case, I dun think rio travelled anywhere near $27.
It will however converge to TERP, afterwards it just depends on how people view the raising.

 

[enigmatic]

Well been a big fan of ARU, however looks like LYC is definitely going to be the first one out of the two to be producing.

If everything is true about the demand of Rare earth and the Under Supply of REO, 47k short full by 2012 including the production from LYC when you consider demand is expected to be close to 180k this is close to 25% shortfall, this would have to have serious Price effects of Rare Earth material.

 

[vincent191]

It will be very interesting to see if the sp of LYC will get back to near $1 once all the dust settles over the capital rising.

IMO I think the sp should strengthen considerably by mid November. In the meantime keep an eye on the number of short sellers. The number has been very high the last 3 weeks but slowly decreasing as the capital raising period draws to a close.

 

[TheAbyss]

It will be very interesting to see if the sp of LYC will get back to near $1 once all the dust settles over the capital rising.

IMO I think the sp should strengthen considerably by mid November. In the meantime keep an eye on the number of short sellers. The number has been very high the last 3 weeks but slowly decreasing as the capital raising period draws to a close.

Well tomorrow is the closing date for the retail entitlement offer. Didn't get to the 45-50 cent range but close enough with decent support keeping the Sp above the offer price. Happy enough with this result and have entered this morning.

Exercise rights price (TERP) of 67.5 cents first target for me. Further upside probable but not guaranteed based on current fundamentals etc.

 

[ep20072008]

I had ever been worked in the industry very close to rare earth. so i am quite familiar with the application of it. (computer, printer, car, mobile phone, camera) actually everyone use it. so for the long run, it only could be consumed more and more unless a whole new technique will be invented. i am quite positive about the demand. also for your information the rare earth stock in china code :SHA :600111 trade around AUD5.00 in shanghai stock market. so i really do not think it is difficult for LYC back to 1 dollar after all money issue settled.

 

[skc]

I had ever been worked in the industry very close to rare earth. so i am quite familiar with the application of it. (computer, printer, car, mobile phone, camera) actually everyone use it. so for the long run, it only could be consumed more and more unless a whole new technique will be invented. i am quite positive about the demand. also for your information the rare earth stock in china code :SHA :600111 trade around AUD5.00 in shanghai stock market. so i really do not think it is difficult for LYC back to 1 dollar after all money issue settled.

Thanks for the heads up. But the share price alone of China code SHA means very little. Do you have better information in any of the comparable metrics (e.g. $ / resource or reserve)?

 

[vincent191]

For the life of me I cannot understand why someone would take up a rights issue at 45 cents and sell for less than that almost immediately. Surely, if you think it is not a good buy then why take up the offer.

 

[skyQuake]

For the life of me I cannot understand why someone would take up a rights issue at 45 cents and sell for less than that almost immediately. Surely, if you think it is not a good buy then why take up the offer.

Because at the time of the offer its trading at a fair prem to the issue price of $0.45.
However between BPay date and trading date, the price can fall significantly.

 

[ep20072008]

based on informationi on webiste of Australian Mines Atlas:

China holds 27 Mt (32%) of the EDR for REO, followed by the Commonwealth of Independent States 19 Mt (22.5%) REO and the USA with 13 Mt (15.4%). Australia accounts for 1.98% of world EDR with 1.65 Mt REO.

The main types of REE deposits make up the largest REO resources in the world with the Bayan Obo deposit in China, which is predominantly REE-iron ores with bastnasite and monazite as the main REE bearing minerals, totalling at least 48 Mt REO at a grade of 6%. The only production of REOs from a carbonatite has been from the Mountain Pass deposit in California, which has total resources of 1.8 Mt REO at an average grade of about 9% REO. Deposits associated with carbonatite laterites include Araxa in Brazil with 8.1 Mt REO at 1.8% and Mt Weld in WA with 1.74 Mt REO at 9.7%. Other deposit categories include a vein type at Nolans Bore in the Northern Territory (NT) and an alkaline trachyte deposit at Toongi in New South Wales (NSW) along with a peralkaline syenite deposit at Lovozero in Russia.

Lynas started mining the Mt Weld deposit, which is a laterite over alkaline carbonatite complex, in WA in 2007 and by early 2008, the measured (2.21 Mt at 14.7% REO), indicated (3.84 Mt at 11.5% REO) and inferred resources (6.19 Mt at 6.8% REO) totalled 12.2 Mt at 9.7% REO with an REO content of 1.18 Mt. In another part of the carbonatite complex there are indicated (1.5 Mt) and inferred (36.2 Mt) resources totalling 37.7 Mt, which include total lanthanides at 1.16% and 0.09% Y2O3

 

[exgeo]

From Jim Jubak (the web's most followed investment columnist, apparently):

Jubak's Picks
Friday, November 06, 2009
Buy Lynas (LYSCY)

Lanthanum. Neodymium. Dysprosium. Terbium. The words don’t exactly roll off the tongue. But they’re the names of four of the seventeen rare earth elements. You can’t build a Prius, an accurate missile, or a wind turbine without them. And we’re not talking about trace amounts of these elements either. The electric motor in a Toyota Prius uses about two pounds of neodymium in its permanent magnets. Each Prius battery also uses 20 to 30 pounds of another rate earth, lanthanum. The huge magnets in wind turbines use about a ton of neodymium for every one megawatt of generating capacity. (For more on rare earth minerals, see this September 11 post .)

China controls about 95% of the global supply of rare earth minerals. And until September 24, China Non-Ferrous Mining looked like it was going to buy 52% of Lynas (LYSCY), the Australian company that owns the world’s richest rare earths deposit. But Australian regulators said no to any deal that gave Chinese investors majority control and China Non-Ferrous Mining walked away. That left Lynas scrambling to find alternative financing. The company finally did in early November, and now it can move ahead with construction of a concentrating plant to do initial processing of the 773,300 metric tons of ore the company has stock piled at the site of its mine, as well as with the construction of an advanced processing plant in Malaysia that produce rare earth minerals ready for export. (For more on the details of that financing, see this corresponding post.)

You can buy either the Australian shares (LYSCF) that traded for 46 cents a share on November 6 if your broker has a decent foreign desk and doesn’t charge too much in commission for an overseas purchase or the US American depositary receipts (ADR: LYSCY) trading at $22.25 on November 6. That’s easier and cheaper, but the ADRs don’t trade with much volume, so you need to be careful and use limits when placing an order. The shares and the ADRs are weighted so you get the same stake of the company no matter what you buy. And despite the low Australian price per share, Lynas isn’t a penny stock. The company has a market capitalization of $595 million.

As of November 6, I’m adding shares of Lynas to Jubak’s Picks with a target price of $29 a share by October 2010.

Full disclosure: I own shares of Lynas ADRs in my personal portfolio. I will buy more three days after this is posted

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[GumbyLearner]

From Jim Jubak (the web's most followed investment columnist, apparently):

......................................................................

My nan has a Prius only driven to Church on Sundays.

She could have driven it to Alice Springs, Darwin, Cairns or even Perth... But since the character limit of the thread is satisfied. **** YOUR RAMP!

 

[Zepplin]

another day with LYC on the slide. I'm a long term investor, but i must admit seeing the sp fall when the supply/demand conditions in its market are great is a little fustrating.

 

[Largesse]

too many shares on issue and company is currently overvalued

don't know whats so hard for all to comprehend?

 

[Miner]

too many shares on issue and company is currently overvalued

don't know whats so hard for all to comprehend?

Hypothetically what do we say about LYC if the Mt Weld project takes its start ?
Technically LYC has a solid position with its product.

I am hoping in a month or two the embargo on its production stop will be over and then we will start smiling.

DYOR

 

[Zepplin]

See Link Below - South Korea's about to commence rare earth stockpiling

metalsplace.com/news/articles/16430/s-korea-opens-holding-facility-to-stockpile-rare-minerals/

 

[Joe Blow]

too many shares on issue and company is currently overvalued

don't know whats so hard for all to comprehend?

If you are going to make the assertion that the stock is overvalued then please provide your reasons. Just saying it isn't enough.

 

[johannlo]

Inevitable overhang from SPP. I wish they priced it at 50c plus but still 45c to everyone is better than 33c to a single large predator. I'm still confused as to why with a SP of 90c they chose such a low figure for the SPP. If they say offered a SPP at 55c the uptake would have still been awesome and now we would be hanging around the high 50s mark not the high 40s.


long term nothing has changed. We have the design for our plant in malaysia ready to roll that that in itself is a big tick that a lot of other asx rare earths hopefuls do not = we go into production a year or two ahead of anyone else, assuming all goes well (touch wood etc.). I'm no longer trading this one but holding on for the multi bagger return.

But for heavens sake, $29 bucks by October, you'd be laughed out of even hotcopper lol