LYC - Lynas Rare Earths

[6figures]

Market update:

Lynas secures long-term funding and provides market update for Phase 1 of the Lynas Advanced Materials Plant in Malaysia
HIGHLIGHTS
● US$225 million to be raised through convertible bonds issue secures long-term low cost funding and enables retirement of unused working capital facility
● New strategic cornerstone investor
● Updated construction timetable and Phase 1 completion costs
● First feed to kiln and first production in Q2 2012, subject to regulatory compliance and issuance of the pre-operating licence in Malaysia

thoughts?

 

[lenny]

News out- looks like cost blow outs to the tune of 40m and a 3 month delay to the lamp which will shake the SP back down no doubt.

 

[payshense]

well some punters seem to be liking the outlook for LYC, big jump this morning!

 

[drlog]

News out- looks like cost blow outs to the tune of 40m and a 3 month delay to the lamp which will shake the SP back down no doubt.

Or not...up 7% at the moment. I didnt think it was "good news" unless someone knows the LAMP will be approved? As in, someone who just handed Lynas lots of money to fund Lynas right now? Hmm, curious.

Thoughts anyone?

 

[payshense]

Decision by AELB on Monday on POL, which then needs final approval by Malaysian politicians

public holiday here tomorrow, speculators jumping on today at any price


going to sit and watch carefully myself. maybe i miss out ,,, decisions

 

[TheAbyss]

Or not...up 7% at the moment. I didnt think it was "good news" unless someone knows the LAMP will be approved? As in, someone who just handed Lynas lots of money to fund Lynas right now? Hmm, curious.

Thoughts anyone?

Do you think LYC had to show Mount Kellett something regarding the POL prior to KM putting up $225m? LYC may not have the POL yet however to convince MK to put this much work in they must have been able to show something of substance re the POL.

I think they must have anyway.

 

[KTrade]

Last minute political maneuvering http://www.freemalaysiatoday.com/2012/01/25/anti-lynas-group-calls-for-rally/

 

[skc]

Or not...up 7% at the moment. I didnt think it was "good news" unless someone knows the LAMP will be approved? As in, someone who just handed Lynas lots of money to fund Lynas right now? Hmm, curious.

Thoughts anyone?

A bit all over the shop today for LYC. The dilution and delay are negatives, while the funding and negation of highly dilutive equity raising are positives.

I thought the initial fall didn't make sense, considering the overseas trading held up well and those who short in anticipation of an equity raising needs to cover.

Only a few more trading days remaining to position (buy or sell) for the POL release... although you have to guess that a negative outcome has been priced in to some extent.

 

[notting]

I'm rubbing my hands together, salivating etc to put on a big short!
May have missed the boat if markets are down tonight and tomorrow.
Hoping for it to peater, then plummet.

 

[drlog]

I'm rubbing my hands together, salivating etc to put on a big short!
May have missed the boat if markets are down tonight and tomorrow.
Hoping for it to peater, then plummet.

So you think the POL won't be approved? What makes you so certain? I think it will be approved (and there will be a rally). Of course, the decision could be delayed further (which will result in a small price drop).

Point is: If Malaysia were to reject LYC at this point, it would be very detrimental to investment in Malaysia and they know it.

 

[lenny]

With the 3 month delay of the lamp which was announced the other day I can't see the malaysian government rushing on a decision to grant the POL.

I wouldn't be surprised to see the SP move down and fill the gap at 1.075 and get a test of the buck but i've been wrong before.

Time will tell.

 

[KTrade]

Final day, local politicians leading resistance http://lockerz.com/s/178149749 : http://www.freemalaysiatoday.com/2012/01/27/fears-still-linger-over-lynas-plant/

 

[notting]

So you think the POL won't be approved? What makes you so certain? I think it will be approved (and there will be a rally). Of course, the decision could be delayed further (which will result in a small price drop).

Point is: If Malaysia were to reject LYC at this point, it would be very detrimental to investment in Malaysia and they know it.

To explain what drove my fingers to tap that out -

Sometimes it just gets obvious.
I was just expressing my seeing of the fact that it had rallied up too much on nothing especially when compairing it against, what an active producer(Molycorp), is actually trading at whilst actually producing!!

Even if it gets the license which I agree it will, in a polotically crafted way, LYC is already overpriced relativly to todays rare earth producers.

Hence you'd expect an excited rally if it gets the license then timber!!! as it stumbles around trying to function! For that may prove trickier than management expect!

If Molycorps price action has changed by the time LYC starts processing it's rare earths I would be on the buy side not the sell side at that time.
just remember I'm an extremely stupid cow.

 

[Logique]

LYSDY (US ADS) down 5.5% this morning with an hour and a half to go.

Once the Malaysian Govt issues a POL they lose a bargaining chip, so I wouldn't be surprised if they hold off for a bit in the name of political expediency, as Lenny suggested. The LAMP is still under construction, it's not delaying production.

 

[skyQuake]

LYSDY (US ADS) down 5.5% this morning with an hour and a half to go.

Once the Malaysian Govt issues a POL they lose a bargaining chip, so I wouldn't be surprised if they hold off for a bit in the name of political expediency, as Lenny suggested. The LAMP is still under construction, it's not delaying production.

LYSCF is generally the corresponding ADR, (does far more vol than LYSDY)
Closed at $1.265 versus LYSDY $1.285 vs LYC AU $1.285

 

[Logique]

LYSCF is generally the corresponding ADR, (does far more vol than LYSDY)..

So it does, thanks for that SQ.

 

[payshense]

Malaysian media is reporting that Lynas has been granted temporary operating license. Not that i believe everything i read. Looking forward to hearing official confirmation of this, hopefully before market opens later this morning. Maybe holding LYC will finally pay off.

 

[aaronphetamine]

I think it is strange that the announcment is out in the media, but it hasnt been officially announced through the ASX yet. I dont know why this would be, especially since this is a positive news announcement, I would have thought that LYC would have raced to publish this with the ASX. Does anyone know why this is? Does this mean that LYC could be in trouble becuase news has been published from information obtained from by the media, that hasnt yet been formally announced is insider information?

Either way though, it seems in the pre open though, that LYC will open up significantly.

I am a minor shareholder of LYC.

 

[notting]

Has now before market open so all good. Already matching at %10 higher with over half an hour to go.

 

[Logique]

The key is that word temporary, i.e. not yet a full license. It allows Lynas to start in (estim.) Q2 2012, on a limited basis, under close scrutiny by the Atomic ELB. If they jump this hurdle, the ramp up to full capacity won't be until (probably late) 2013. Lynas must deposit a $US50Mill guarantee with the Malaysian govt, and submit plans and a location for a permanent disposal facility within 10 months. I understand the WA govt has said they would not accept the tailings back there.

In the background a key contractor has pulled out, citing safety concerns.

Lynas gets temporary licence to start Kuantan plant
http://www.themalaysianinsider.com/...ets-temporary-licence-to-start-kuantan-plant/
The appended comments are worth reading. Politically, this is far from over:

"People of Kuantan area and Pahang and Terengganu:

1. Mobilise and punish the UMNO-BN regime by voting for Pakatan Rakyat
so that PR will take over the Terengganu and Pahang state govts

2. After that, the Pahang state govt will kick Lynas out of Pahang completely

3. Then, prosecute all the govt bureaucrats who are responsible for granting Lynas
this license.

PKL (public health professor and Kuantan Boy)"