http://www.mobtv.my/current_affairs-1398.html
Raja aziz the head of the aelb starts to talk in english at the 8 minute mark.
Raja aziz the head of the aelb starts to talk in english at the 8 minute mark.
LYC - Lynas Rare Earths
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Decision On Appeal Against Temporary Licence For Lynas In Two Weeks
http://www.bernama.com.my/bernama/v6/newsindex.php?id=667908
Finally, a (relatively) definite date. With all the positive PR on Rare earths and experts chipping in on the safety of the plant I believe the appeal will be not be upheld, a decision that is supposedly final and which is all the AELB is waiting for to 'unsuspend' the TOL.
http://www.bernama.com.my/bernama/v6/newsindex.php?id=667908
Finally, a (relatively) definite date. With all the positive PR on Rare earths and experts chipping in on the safety of the plant I believe the appeal will be not be upheld, a decision that is supposedly final and which is all the AELB is waiting for to 'unsuspend' the TOL.
skc
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Is it all about Malaysia? Or is it more about rare earth?
MCP as far as I am aware has no political issues to speak of...
MCP as far as I am aware has no political issues to speak of...
numbercruncher
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Without actually researching this Question myself , Why did they build the processing plant in Malaysia and not in Oz ? Just an upfront cost thing ?
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combination of cheapness and less stringent laws regarding waste disposal over there. Rare earth processing produces some pretty serious waste.
http://uranium-news.com/2012/03/10/...its-rare-earths-processing-why-not-australia/
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Nice biased blog source you have there. It's far more to do with cheapness (wages, building costs, etc.) and closer proximity to future clients in Asia.
As for the waste disposal, I don't know if you've actually been following this but the amount of investigation as been exhaustive, higher even than international atomic standards.
http://au.ibtimes.com/articles/3442...are-earths-lynas-corp-radiology-radiation.htm
As for the waste disposal, I don't know if you've actually been following this but the amount of investigation as been exhaustive, higher even than international atomic standards.
http://au.ibtimes.com/articles/3442...are-earths-lynas-corp-radiology-radiation.htm
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agreed - bad source. twas the first one from a google search.
Malaysia way cheaper cause a lot of the infrastructure is already in place as well.
Malaysia way cheaper cause a lot of the infrastructure is already in place as well.
numbercruncher
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Ahh now thats a big incentive ! Thanks for the responses.
I can see the demand long term for rare Earths but a fair bit of pressure near term hey ?
http://www.theaustralian.com.au/business/mining-energy/china-lifts-rare-earth-export-quotas-as-market-demand-sours/story-e6frg9df-1226359934072
I can see the demand long term for rare Earths but a fair bit of pressure near term hey ?
http://www.theaustralian.com.au/business/mining-energy/china-lifts-rare-earth-export-quotas-as-market-demand-sours/story-e6frg9df-1226359934072
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I definitely think it has a part to play, as seen in your graph. Both MCP and LYC are not producing yet (as far as I'm aware with MCP) but I expect a significant re-rate on LYC when the TOL is given and when production actually starts. Many broker reports using very conservative basket prices value LYC at around $1.70-1.90 using Phase 1 production figures, I am however glad my average buy price is well, well under that figure.
skc
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LYC's Phase 1 production was going to be 11,000 tonnes, with phase 2 up to 22,000 tonnes. MCP's Phase 1 production was 19,050 tonnes, with phase 2 up to 40,000 tonnes. Both are expected to come on line in similar timeframe.
According to various reports, China's export quota of 30-35,000 tonnes accounted for >90% of global demand. This means global demand is only something like 40,000 tonnes. LYC and MCP alone can supply 75% of this demand. What happens when this supply hits the market, while China's supply continues? Demand is supposed to increase greatly in the future as more uses for RE are envisaged, but the phase 2 production target of LYC and MCP adds another 30,000 tonnes. So the key questions are whether demand will rise at the same rapid rate as these lumpy jumps in supply, and what will the price be (It is rare to see a market so small with such a big forecast jump in supply, so probably impossible to guess).
With target of $1.8 that's a market cap of ~$3B. You'd need something like $300m NPAT to justify that sort of market price. That translate to ~$30 net profit per kg of RE. With the LYC production cost ~$10/kg, the market price of RE must stay above $50/kg to justify a share price target of $1.8.
Add in uncertainty of the global market and economic growth forecasts (note how RE demand fell in 2009), time value discount and execution risks, the current LYC share price to me is as much a function of the rare earth market dynamics as the political situation in Malaysia.
Hello everyone. While my previously posted technical price target of 75 cent comes closer, Lynas is still trapped in politics. Those who underestimated or even ignored this issue might have learned a lesson and for those who read the situation correctly it was a very rewarding chance for shorting this stock (thanks for all the pumpers btw.).
As we found out last week, Morgan Stanley reduced it's stake to round about 7% and after their facebook-show, it would indeed surprise me if they would not pull a fast one with the Lynas shareholders in such an uptight situation. Remember, the honorable Mr. Curtis (what did he sell his shares for last year? ) is likely to load up the truck if he expects LYC to survive and become a producer in Malaysia. To me this seems to be the key. Without Curtis buying back in, I would be very careful here. 
Regards
Julia
Disclosure: currently flat and ready for a longtrade in the swinging sixties
While my previously posted technical price target of 75 cent comes closer, Lynas is still trapped in politics. Those who underestimated or even ignored this issue might have learned a lesson and for those who read the situation correctly it was a very rewarding chance for shorting this stock (thanks for all the pumpers btw.).As we found out last week, Morgan Stanley reduced it's stake to round about 7% and after their facebook-show, it would indeed surprise me if they would not pull a fast one with the Lynas shareholders in such an uptight situation. Remember, the honorable Mr. Curtis (what did he sell his shares for last year?
) is likely to load up the truck if he expects LYC to survive and become a producer in Malaysia. To me this seems to be the key. Without Curtis buying back in, I would be very careful here. Regards
Julia
Disclosure: currently flat and ready for a longtrade in the swinging sixties
hi Schatz,
as you can read I'm not shorting LYC anymore. Remember never be too greedy and there is enough junk on the market.
Still think a green light for LYC is unlikely before the elections for obvious reasons. And no matter what they decide, Lynas will continue to be a political issue in Malaysia.
Regards
Julia
I double up on on this specs this week pending a yes to TOL.
Average price just over a dollar, let see how we go...
Not much money all up 50K worth.
sometimes you just have to go with guts instinct with Asian politics
that this thing will get approve and get the operating license...
I am aiming for price target of around $2 in 2 years time ...
Average price just over a dollar, let see how we go...
Not much money all up 50K worth.
sometimes you just have to go with guts instinct with Asian politics
that this thing will get approve and get the operating license...
I am aiming for price target of around $2 in 2 years time ...
Glad to see Lynas break back through $1, it can keep going to! At this stage I would like to think that I have learnt, that speculation is a dangerous thing to invest in. Particularly in the case of a country like Malaysia. If i can sell for a reasonable profit on this speculative rise, I'll take my money and get out for a while. And I believe it is speculative too, just because TOL is issued means nothing anymore. Lets not forget Malaysian election is due next. And it would take a brave man to bet on the outcome, and effect, of that one! Interested in others thoughts on this.
Holding LYC.
Holding LYC.
Fascinating stock. 17.32% in one day is nothing to sneeze at.
Now we just wait and see what the Minister has to say in the next 2 weeks.
[Currently holding. DYOR.]
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The one goddamn day I wasn't at a computer.....
Does anyone have an explanation for today? A stock like LYC gets bought up 17% through the day, almost screams inside knowledge of impending events
Does anyone have an explanation for today? A stock like LYC gets bought up 17% through the day, almost screams inside knowledge of impending events
The one goddamn day I wasn't at a computer.....
Does anyone have an explanation for today? A stock like LYC gets bought up 17% through the day, almost screams inside knowledge of impending events
Volume and price indicates TOL permit is imminent....the trend started Friday
Today just confirmed someone is in the know...
Last time it did this it got a TOL shortly after that but not the permit.
SKC
Ree basket price:$62
Production cost:$10
Share on issue: 1.8 bill
Working on $45 kg profit and stage 1 production capacity of 11 million kg's of ree.
$45 x 11,000,000 = $495 mill profit per annum.
$495 mill / 1.8 bill share on issue = 27.5 cent profit per share.
Pick your PE ratio 8,10,12,14 some mining companies run in the 20's.
Lets pick a PE ratio of:
10 x by an earnings per share of 27.5 cents a share = $2.75
14 x by an earnings per share of 27.5 cents a share = $3.85
This is just stage 1 and you can basically double the above valuations for stage 2 production in 2013 but it still doesn't take into account the following:
-Stage 2 will likely process hree's(higher price per kg)
-Mt duncan
-The crown deposit.
-Ability to profit from waste residue (plaster board).
-Joint venture parntership with siemens.
-Mt weld is the richest known rare earth deposit in the world.
-China will become a net importer of ree within 5 years.
Regards
Lenny
Ree basket price:$62
Production cost:$10
Share on issue: 1.8 bill
Working on $45 kg profit and stage 1 production capacity of 11 million kg's of ree.
$45 x 11,000,000 = $495 mill profit per annum.
$495 mill / 1.8 bill share on issue = 27.5 cent profit per share.
Pick your PE ratio 8,10,12,14 some mining companies run in the 20's.
Lets pick a PE ratio of:
10 x by an earnings per share of 27.5 cents a share = $2.75
14 x by an earnings per share of 27.5 cents a share = $3.85
This is just stage 1 and you can basically double the above valuations for stage 2 production in 2013 but it still doesn't take into account the following:
-Stage 2 will likely process hree's(higher price per kg)
-Mt duncan
-The crown deposit.
-Ability to profit from waste residue (plaster board).
-Joint venture parntership with siemens.
-Mt weld is the richest known rare earth deposit in the world.
-China will become a net importer of ree within 5 years.
Regards
Lenny
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