LYC - Lynas Rare Earths

[oldblue]

Fair points there.

I would expect LYC to seek to avoid this situation by firming up sale contracts for the bulk of the expected output. A few months ago they announced 5 or 6 contracts/letters of intent in the pipeline and since then they have signed a Strategic Alliance Agreement with Japan's Solitz Corporation.

I don't hold but am becoming increasingly interested!

 

[nioka]

LYC is an analysts darling.
I've had a quick look at it. Won't it be 12 to 24 months before the earnings potential is realized, and also if the Chinese are 97% or so of the supply side, isn't there a danger of market price and supply manipulation. Also the LYC share price action is all over the place..

Earnings should start rolling in within the next nine months. I doubt the Chinese producers will be in any postiion to manipulate the supply or the price. They are too busy trying to counter the pollution problems they brought on themselves with cheap uncontrolled production. The use of reare earths is increasing. Users that have had supplies restricted by Chinese quotas will be keen to build up reserves. Lynas has firm orders for most of the production from stages 1 and 2. Thre is no other company anywhere near to a start up as Lynas.

The biggest manipulation is with the SP by funds and traders. Shorters are starting to realise that they have more chance of losing than making a profit shorting LYC. I see SP price manipulation as we have seen it lately being a thing in the past.

I hold Lynas. DYOR.

 

[TabJockey]

I hope your right about the shorts Noika, a reduction in volatility would certainly encourage more conservative investors to jump in and we would see a smoother upward curve approaching production.

 

[Logique]

Thanks all.

Another thing is there's no attached Lending Value with my broker (yet anyway, but I'm sure that will eventually change), not that that's a primary consideration, just something portfolio investors think about.

Remaining very interested.

 

[TabJockey]

(Reuters) - China's monthly exports of rare earth metals more than doubled in November to 2,090 tonnes, bouncing back after falling by more than three-quarters in October, data supplied by China Customs Statistics Information Center (HK) (www.eiahk.com/consult_e.html) showed.

While the monthly volume remained at the second-lowest level since January, the value of exports continued to skyrocket, topping $121 million for the month.

That equates to an average export value of $57,903 per tonne on a free on board basis, up from $42,255 in October and a fourfold rise since July, according to Reuters calculations.

The 17 rare earth elements are used in high-tech electronics, magnets and batteries, with applications in hybrid cars, renewable energy, computer monitors and weapons.

China controls 97 percent of global supplies of the elements but restricts exports with a quota, causing alarm among buyers in Japan, the United States and the European Union.

China slashed the export quota by 40 percent this year and plans to trim it further next year. It has already announced increased export taxes on rare earths in 2011.

Japanese companies complained of restrictions on shipments from late September amid a spat over disputed islands in the East China Sea. Japan's trade minister had said he hoped shipments would resume in the latter part of November, although analysts expected the volume of trade to remain stagnant.

The November data showed China's total export volume in the first 11 months of this year was 35,075 tonnes. Although that is more than the quota of 30,258 tonnes, it may include some shipments made early in the year and sold under the 2009 quota.

The value of exports in Jan-Nov has jumped from $232.5 million last year to $630.5 million in 2010, a rise of 171 percent.

Outside China, rare earths suppliers include Australia's Lynas Corp and Arafura Resources, AS Silmet of Estonia and U.S.-based producer Molycorp Inc.

Hmmmm

 

[nioka]

The following announcement is an important one for Lynas. Malawai has been on the back burner for some time. It is important firstly because it has a concentration plant ready to go and secondly the make up of the product includes some rare earth metals that are undersupplied from LYC's Mt Weld basket of products. The price paid for the Malawai was negotiated at a time where there was less interest than there would be now after the Chinese export restrictions.

Lynas is setting itself up with a great balance of saleable product with Mt Weld, Malawai and its interest in NTU.

\LYNAS CORPORATION\ASX MEDIA ANNOUNCEMENTS\ASX ANNOUNCEMENTS 2010\Malawi Completion Announcement 22 December 2010

"Lynas Receives Approval from the Government of Malawi to Complete the Acquisition of Rare Earths Resource
Key Points:
• The main conditions precedent of the Purchase Agreement for the acquisition of the fully permitted Kangankunde Rare Earths Resource in Malawi, Africa, have been met. Lynas expects to complete the acquisition of this asset within the next few weeks for the contract sum of US$4 million
• The deposit has an Inferred Resource of 107,000 tonnes of Rare Earths Oxide (REO) at an average grade of 4.24% REO using a 3.5% REO cut-off grade. At a 3% REO cut-off grade the resource increases to 180,000 tonnes REO and remains open at depth
• The deposit also contains strontianite and phosphate minerals which Lynas will actively examine to determine whether they can be economical by-products
• Importantly, the deposit has extremely low natural radiation levels for a Rare Earths deposit, with an average of 11ppm thorium oxide per percentage of REO content
• Completed test work shows the deposit is amenable to a low cost gravity separation concentration process producing a 60% REO concentrate"

 

[TabJockey]

Bounced straight off short term cieling today of ~1.64 and even went into the red. Little fishy on a good news day. More natural buyers coming in as they realise this price level may not last into Q1 11

 

[Kremmen]

With 500m shares out there thats a ball park figure of 30c earnings per share after tax. Makes $1.50 look very low.

Eventually, after a while of earning nothing, they might, possibly, be returning 20%. Yeah, it's good, but it's not fantastic and it's some time off.

Won't it be 12 to 24 months before the earnings potential is realized, and also if the Chinese are 97% or so of the supply side, isn't there a danger of market price and supply manipulation. Also the LYC share price action is all over the place.

I agree with all this. Also, there will be other suppliers coming along over time and the world's REE requirements, while increasing, are not huge.

My analysis: At 60c, LYC was a great deal. At $1.60, I think there are much better investment options which will pay off sooner.

 

[nioka]

My analysis: At 60c, LYC was a great deal. At $1.60, I think there are much better investment options which will pay off sooner.

I'm all ears. Tell me a few. Although there are a few of us that bought in at a better price and now LYC is already the proverbial 10 bagger that does not mean that there is not room for another spurt that will still do it over again. Rere earths are not a scam. They are becoming an important part of modern living and Lynas has the jump on all new producers at this stage. I'm certainly not going to take profits yet as I believe there is plenty of upside to come.

 

[TheAbyss]

I'm all ears. Tell me a few. Although there are a few of us that bought in at a better price and now LYC is already the proverbial 10 bagger that does not mean that there is not room for another spurt that will still do it over again. Rere earths are not a scam. They are becoming an important part of modern living and Lynas has the jump on all new producers at this stage. I'm certainly not going to take profits yet as I believe there is plenty of upside to come.

have to say i agree with Nioka on this.

LYC has done very well and i am a happy chappy after locking in profits. Agree that there is more upside here as they have resources to sell and the opportunity to do so in the short term with little to no competition. I will be buying dips and selling peaks along with some free carry shares for a while to come on LYC .

Yes the Chinese have said they will sell to some valued European clients however that is a political decision (isnt everything out of china though?). LYC have already locked in contracts and there will be more to come as they are ready to sell now not just announcing indicated resources that no one will pay for.

Might be better SP runners in the short term however longer term LYC is top 3 for me (AGO and GBG are my others).

 

[TabJockey]

Yes I bought in at 5xc, and ive sold half, so ive already made good money even if it now goes to 0, but I dont intend to realise capital gains on the remaining half of my holding, at least in the next few years.

30c per share earnings may just be "20% after many years of nothing" to you, but in IMHO 30c real earnings will mean a much higher share price, do you honestly think that a company earning 30c will remain under $2? The mine is in Australia not botswana!

The potential upside is in future RE demand, personally I am very happy to have an exposure to resources with many uses that are currently growing very quickly.

Potential downside is China goes gangbusters on RE exports and prices drop. This is not really in thier best interests, I dont feel its likely, and its a risk im comfortable with.

In rare earth's there are other plays, but they are very late to the party and because the others are so far away from production thier SP will probably remain flat over the next year, and if there is some sort of global event they are much more sensitive.

My Analysis: Would I buy in now? perhaps not, very volatile SP and the return over the next year could be slim. Would I sell now? With so much possible upside and the shares I hold being essentially free, there is not a better Australian company to invest in to take advantage of RE price appreciation if it continues.

Every few months I ask myself "Am I in love with this stock?" and run the numbers again using more recent prodictions, estimates and opportunity cost of capital. These numbers still stack up for me.

This is ofcoarce all very personal and DYOR.

 

[mr. jeff]

Yes I bought in at 5xc, and ive sold half, so ive already made good money even if it now goes to 0, but I dont intend to realise capital gains on the remaining half of my holding, at least in the next few years.

30c per share earnings may just be "20% after many years of nothing" to you, but in IMHO 30c real earnings will mean a much higher share price, do you honestly think that a company earning 30c will remain under $2? The mine is in Australia not botswana!

The potential upside is in future RE demand, personally I am very happy to have an exposure to resources with many uses that are currently growing very quickly.

Potential downside is China goes gangbusters on RE exports and prices drop. This is not really in thier best interests, I dont feel its likely, and its a risk im comfortable with.

In rare earth's there are other plays, but they are very late to the party and because the others are so far away from production thier SP will probably remain flat over the next year, and if there is some sort of global event they are much more sensitive.

My Analysis: Would I buy in now? perhaps not, very volatile SP and the return over the next year could be slim. Would I sell now? With so much possible upside and the shares I hold being essentially free, there is not a better Australian company to invest in to take advantage of RE price appreciation if it continues.

Every few months I ask myself "Am I in love with this stock?" and run the numbers again using more recent prodictions, estimates and opportunity cost of capital. These numbers still stack up for me.

This is ofcoarce all very personal and DYOR.

TJ I don't know much about LYC but I would say that if you intend to hold them and think that their future is very bright you might as well back them and say that you would buy them otherwise you would sell right? Holding is the same as buying at the current level.

 

[TabJockey]

TJ I don't know much about LYC but I would say that if you intend to hold them and think that their future is very bright you might as well back them and say that you would buy them otherwise you would sell right? Holding is the same as buying at the current level.

The only reason I would not buy at the current price is because its so damn volatile you may as well buy on the dips.

 

[Kremmen]

I'm all ears. Tell me a few. Although there are a few of us that bought in at a better price and now LYC is already the proverbial 10 bagger that does not mean that there is not room for another spurt that will still do it over again. Rere earths are not a scam.

OK. I've only bought into or added to two stocks since deciding to sell LYC: AUT & PYM. (PYM has well over doubled since LYC first went over $1.60.)

I'm not saying rare earths are a scam, but, nor do I think there's room for LYC to do that big a spurt again. Given the world requirements, there simply aren't enough buyers out there for it to continue to rise spectacularly. I bought LYC over a year ago as a longer-term proposition, thinking that it would rise gradually over the next couple of years. (If I'd thought would rise so soon, I'd have invested more.) It started to rocket up purely because of the Chinese announcement concerning quotas. I suggest that that removed risk from LYC, guaranteeing they'd be able to sign contracts, which is more a matter of moving forward a re-rating of their value by the market than increasing it in the long term.

 

[TheAbyss]

OK. I've only bought into or added to two stocks since deciding to sell LYC: AUT & PYM. (PYM has well over doubled since LYC first went over $1.60.)

I'm not saying rare earths are a scam, but, nor do I think there's room for LYC to do that big a spurt again. Given the world requirements, there simply aren't enough buyers out there for it to continue to rise spectacularly. I bought LYC over a year ago as a longer-term proposition, thinking that it would rise gradually over the next couple of years. (If I'd thought would rise so soon, I'd have invested more.) It started to rocket up purely because of the Chinese announcement concerning quotas. I suggest that that removed risk from LYC, guaranteeing they'd be able to sign contracts, which is more a matter of moving forward a re-rating of their value by the market than increasing it in the long term.

While China are exercising their muscle with supply there will be scope for LYC to appreciate in value. Molycorp in the USA went up 10% last monday and then another 10% Tuesday on the strength of Chinese supply concerns so this isnt just aussie trading speculative theory, it is worldwide and there appears to be quite a lot of concern by governments in USA and Japan which is being backed by major corporates who are looking to lock in supply from other producers which puts LYC in a pretty decent space at the moment..

The Chinese have 97% of the market and if they are not sharing then LYC have an opportunity to leverage this into a market position and shareholders will make some decent profits. The more contracts LYC can lock in before china opens up supply again strengthens the market position and LYC are here to stay as a producer so fill your boots.

This is why LYC have purchased the leases in Malawi because the more RE they can firm up the more contracts they can sign now while the sun is shining.

Article below.



http://www.businessspectator.com.au...ycorp-jump-on-Chi-CKL5V?OpenDocument&src=hp11

http://www.theaustralian.com.au/bus...th-export-quotas/story-e6frg90o-1225977704036

 

[mattryanshares]

Good news today with the last announcement share price up 20cents or 13%.

 

[TabJockey]

Good news today with the last announcement share price up 20cents or 13%.

Gap up, above previous highs because chances are good that the RE price basket will continue to climb into 2011 and hopefully remain high for production in q3

 

[TabJockey]

I certainly hope those who where "interested" in the thread got in before the recent break out.

Personally, this has been one of my best picks, returning 400+% in 6 months and I think im in danger of becoming partial to the stock...

Never the less I sold out on friday at 2.05. The reason I did this is because technically I believe that profits will now be taken and the price should drop 10-20c before resuming its climb and I wanted to make some money rebuying on the dip.

However my fundamental analysis gives me a price target of $4 in 12-15 months with plenty of upside which scares the **** out of me selling out at 2.05.

So I will be watching the open very carefully packing my pants, praying that LYC does not explode into the stratosphere, there is no fundamental reason it cannot go to $2.50 in January.

Greed will get ya every time

 

[1nvstor]

I certainly hope those who where "interested" in the thread got in before the recent break out.

Personally, this has been one of my best picks, returning 400+% in 6 months and I think im in danger of becoming partial to the stock...

Never the less I sold out on friday at 2.05. The reason I did this is because technically I believe that profits will now be taken and the price should drop 10-20c before resuming its climb and I wanted to make some money rebuying on the dip.

However my fundamental analysis gives me a price target of $4 in 12-15 months with plenty of upside which scares the **** out of me selling out at 2.05.

So I will be watching the open very carefully packing my pants, praying that LYC does not explode into the stratosphere, there is no fundamental reason it cannot go to $2.50 in January.

Greed will get ya every time

I'm in the same boat so to speak. Looking to snavel a good buy on a dip around 149. Let's hope.

 

[TheAbyss]

I certainly hope those who where "interested" in the thread got in before the recent break out.

Personally, this has been one of my best picks, returning 400+% in 6 months and I think im in danger of becoming partial to the stock...

Never the less I sold out on friday at 2.05. The reason I did this is because technically I believe that profits will now be taken and the price should drop 10-20c before resuming its climb and I wanted to make some money rebuying on the dip.

However my fundamental analysis gives me a price target of $4 in 12-15 months with plenty of upside which scares the **** out of me selling out at 2.05.

So I will be watching the open very carefully packing my pants, praying that LYC does not explode into the stratosphere, there is no fundamental reason it cannot go to $2.50 in January.

Greed will get ya every time

LYC has followed Molycorp lately (up 10% 2 days in a row last week). Moly up 16% last night so with luck LYC will continue the trend.

http://www.businessspectator.com.au...broker-raises-targ-CRLYP?OpenDocument&src=hp8