LYC - Lynas Rare Earths

[Huitzii]

Thats a very good read Noika, and it confirms the direction that my head has been heading recently.
I would be keen to know if any brokers have made any predictions on LYC's SP in the next 12 months, I wouldnt know where to start but im sure that it will be a lot more than it is now.
To be honest the basket price could go out of control from here if China reduces its exports of Rare Earth Elements by 72% before the end of this year.
Its no wonder that LYC has got 9.5% of NTU after finding out that China has a 51% interest for 15M, allong with 3 Chineese on the board of NTU.
I would think that LYC was just buying insurance IMHO.
I would expect LYC to up the ante to 15% with NTU in the near future, Which will mean that only about 30% of shares will be floated to the public and IMHO held very tightly.
Any thoughts?

 

[nioka]

Its no wonder that LYC has got 9.5% of NTU after finding out that China has a 51% interest for 15M, allong with 3 Chineese on the board of NTU.
I would think that LYC was just buying insurance IMHO.
I would expect LYC to up the ante to 15% with NTU in the near future, Which will mean that only about 30% of shares will be floated to the public and IMHO held very tightly.
Any thoughts?

Chinese interests do not have 51% at this stage and I doubt they ever will. I can't see the FIRB allowing that deal. They did not allow a similar deal for Lynas even when it was recommended by the directors as the only chance for Lynas to survive. It is more likely that Lynas will end up owning at least a majority holding in NTU.

 

[Huitzii]

Chinese interests do not have 51% at this stage and I doubt they ever will. I can't see the FIRB allowing that deal. They did not allow a similar deal for Lynas even when it was recommended by the directors as the only chance for Lynas to survive. It is more likely that Lynas will end up owning at least a majority holding in NTU.

You are correct Noika, here are the current terms as from 9th August 2010 in regards to the ECE letter of intent:

Conditions
Completion of the transaction is subject to the following conditions:
• Satisfactory completion of confirmatory due diligence by ECE and a review by Northern Uranium;
• Execution of definitive transaction documentation embodying the terms of the Letter of Intent;
• ECE obtaining the approval of the Jiangsu Provincial People’s Government;
• ECE receiving notification under the Foreign Acquisitions and Takeovers Act that the Australian Commonwealth Government has no objection to its investment in Northern Uranium; and
• Approval by Northern Uranium shareholders at an extraordinary general meeting.
http://www.northernuranium.com.au/files/announcements/10-08-09 ECE NTU Announcement.pdf

 

[frankblack]

You dont read much about Germany trying to secure supply of rare earths.
As such a powerhouse of new technology and exports, what are they doing to get their hands on the stuff.?
Do they have better arrangements in place?(with China)
Or are they planning to do without rare earths? Bypassing the need altogether.
I wonder???

 

[Huitzii]

You dont read much about Germany trying to secure supply of rare earths.
As such a powerhouse of new technology and exports, what are they doing to get their hands on the stuff.?
Do they have better arrangements in place?(with China)
Or are they planning to do without rare earths? Bypassing the need altogether.
I wonder???

Here is a couple of interesting snippets and a vid.
In the video look in the background for an interesting insight

http://www.reuters.com/resources/flash/include_video.swf?edition=US&videoId=1702495

* Tantalus Rare Earths AG’s headquarter is located in Düsseldorf, Germany.
* Current investment portfolio consists of 100 % of the Tantalus Rare Earths Project in Madagascar.
* The project in Northern Madagascar has a total size of 300 km ².
* Target commodities of the project are rare earth elements, tantalum, niobium, zirconium and tin.
http://www.tre-ag.com/en/company_profile.php

And some interesting talks with China and Japan on Friday Regarding Rare Earts
Japan, China to launch talks on rare earth metals export controls
BEIJING (Kyodo) -- Japan and China agreed Saturday they will launch a vice minister-level meeting to study Tokyo's call for Beijing to ease export controls on rare earth metals used in hybrid electric vehicles, mobile phones and other high-tech products.

Japan asked China to ease export restrictions on rare earth metals, but Beijing dismissed the request citing national security concerns and natural resources protection, according to Japanese officials.

China argued that the export controls would not violate World Trade Organization rules, the officials said.
http://mdn.mainichi.jp/mdnnews/business/news/20100828p2g00m0bu045000c.html

Key Components Of America’s Military Are Now Dominated By A Chinese Monopoly


How can we put this without sounding alarmist?

Most of America’s key military technologies require rare earth elements, whose production China holds a near-monopoly over.

The GAO report said the US had been self-sufficient in rare earth minerals for most of the post-War era. The key mine at Mountain Pass in California shut down in the 1990s when China flooded the market with exports and drove Western mines out of business. One by one, US-based processing plants owned by German and Japanese firms switched operations to China. There are none left.
http://www.prisonplanet.com/key-com...-are-now-dominated-by-a-chinese-monopoly.html

And this one if you can read German? As I cant read German.
http://tre-ag.com/press-rare-earths/100803_das-erste_de.pdf

 

[pixel]

And this one if you can read German? As I cant read German.
http://tre-ag.com/press-rare-earths/100803_das-erste_de.pdf

The last article is talking about the same issue from a German perspective.
Firstly, it explains rare earths, how they look, and how China has monopolised the supply/ cornered the market.
Then it explains in detail some of the components in modern technology that don't operate without RE metals.
Example Neodymium: harder than iron and holds magnetism indefinitely at 25-times the strength of an iron magnet. Such perma magnets are indispensible in headphones, disk drives, car engines, even wind turbines.
Example Cerium: UV protection in glass, Ni batteries
etc...

No need to translate the full article - it merely tells the same story, just in another language: German.

Oh - one quote by Deng Xiaoping is new, at least to me. He is reported as having said "The Middle East has Oil. China has Rare Earths." Probably no exaggeration either.

 

[vincent191]

Rare Earths are not actually that rare, some elements are more abundant than some of the everyday elements than we use regularly. Problem is RE are seldom found in rich high concentrated deposits and even in China there are only a few places where they have rich deposits. LYC's deposits are also considered very rich by world standards.

I don't believe China has the rest of the world at it's mercy, not in the long term, BUT it has a head start. If the US want to reopen Mountain Pass it can do so, there is still a lot of RE buried in there. Only problem is it may take a few years to get back into production. LYC is well placed to start production by the fourth quarter of next year.

In my opinion China & LYC are well placed to take full advantage of the RE market in the next 10 to 15 years before the rest of the world catches up. Meanwhile make hay while the sun shines.

 

[Southern X]

The pink sheets price in the USA last night was US$.90 which is still $1 AU. That was on a bad market there. Some trader activity is going on with LYC which means that Friday will not be a good day but I see no reason for any major fall. The fundamentals justify a rise.

Judging from the relative volumes between the ADR, LYSDY (it appears a unit comprising 10 LYC shares) and LYC, I believe there is no arb play. Also, I think sp is defined by LYC, ie. LYSDY solely takes its lead from LYC, unless of course there's after hours news. Regarding same REE company different bourse + currency I know only one (excluding the pinks), RES:TSX-V / REE:AMEX. It just recently was listed on the AMEX. Both volume and sp have rocketed!

Regarding production, to reiterate from yesterday's lost posts:

In the conference call Curtis stated Q3 2011. Though later he said Q4. There has been a one month delay costing $4 million, though LYC has a $25 million budgeted for such delays (and, I suppose, buying 9.44% of HREE exploreco NTU!). Nevertheless, I like Q3's sound better.

SX

Disclosure in the REE sphere: LYC, ARU, NTU; on the TSX-V: RES, QRM, UCU.

 

[frankblack]

Does any-one find the way LYC is trading at the moment strange, or is it just me?
25 million today, Is this day trading? Who are the winners here? Who are the losers?
Just doesnt make sense to me.
Thanks to all who contribute here, this has to be one of the best threads.

 

[Southern X]

I've been giving that thought as well. Aside from chart patterns I sense a buying pattern. Essentially it's one based on accumulation. Days of tremendous volume mostly on the upside; then a news release announcing an initial substantial holder or positive change by a substantial holder; pause; dip, then resume buying pressure.

The liquidity and daily trading range can give day-traders a tingle, but moreso I see swing traders/momo traders here. This is just a feeling as I'm not chartist enough to see the evidence of such moves, just sign posts. Further, don't forget the big houses can also short, thereby capping the sp ensuring they don't over pay.

SX

 

[nioka]

Does any-one find the way LYC is trading at the moment strange, or is it just me?
25 million today, Is this day trading? Who are the winners here? Who are the losers?
Just doesnt make sense to me.
Thanks to all who contribute here, this has to be one of the best threads.

Without a doubt there are very active day traders on LYC. I suggest that there were a few burnt fingers today. A lot of the volume is probably day trade churn. Winners and losers? They take money from one another.

 

[noie]

Without a doubt there are very active day traders on LYC. I suggest that there were a few burnt fingers today. A lot of the volume is probably day trade churn. Winners and losers? They take money from one another.

Up 2% then down 6..
still weird volume for this stock (but maybe the weird will be the normal)

26690492 vol in 2695 trades... and we are looking around 20 mill average for just over a month now...

 

[gjnj1962]

to all you lyc investors,there is a god and his name is nick curtis ,this is just the begining,yanks & canadians eat your hearts out.i am a holder of lyc shares & have been for the past 5 years.

 

[KurwaJegoMac]

LYC has upped its' RE resource estimate by 19.4%. Wonderful news

http://www.thebull.com.au/articles/a/14060-lynas-ups-rare-earths-resource-estimate.html

 

[nioka]

to all you lyc investors,there is a god and his name is nick curtis ,

Just remember that this is the same Curtis that said not so long ago that the only way for LYC to survive was to sell a 51% interest to the Chinese government. He had to be dragged screaming from that senario by shareholder pressure on the FIRB to stop the deal.

 

[gjnj1962]

NIOKA thanks for your response but also remember nick had no suitable options at the time but to go chinese.
regards

 

[nioka]

NIOKA thanks for your response but also remember nick had no suitable options at the time but to go chinese.
regards

They did have an option, they always had the option of going to the shareholders but chose not to do so. They had to take that option when the Chinese deal fell through. I have emails to and from the company in my files that show that to be a FACT. It is no thanks to Curtis or the board that the company was saved as an Australian company. They acted to save their jobs. It was shareholders and the FIRB that saved the company (and their jobs.)

 

[vincent191]

Nioka, I completely agree with you. Curtis is a very good friend with the Chinese and has some very powerful connections. I wonder???

 

[Southern X]

Many a long night I pondered why LYC didn't seek a listing on the AIM, or TSX, even the TSX-V, or AMEX, like RES:TSX-V (REE:AMEX).

This of course coincided with delving into the construct of a Lloyd Blankfein voodoo doll, rusty pins included. (Whatever happened to that escrow cash?)

SX

 

[vincent191]

Samething with RIO, they went straight to the Chinese before giving their own shareholders a go.