LYC - Lynas Rare Earths
- Thread starter nioka
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Easily a dollar by week end...at this RE price Lynas can still rake in some bucks.
What a surprise! Congrats to the short term longs! Germans are going nuts. 
+50% Most likely they will be sorry if they read the whole story until the end:
"...
The TOL will enable Lynas to conduct trial processing of lanthanide concentrates in stages and in limited quantities under close and continuous surveillance by the authorities.
..."
That doesn't sound like 11k tons a year to be honest. Personally I'm not sure if trial processing in limited quantaties can generate any positive cash flow.
Regards
Julia
+50% Most likely they will be sorry if they read the whole story until the end:"...
The TOL will enable Lynas to conduct trial processing of lanthanide concentrates in stages and in limited quantities under close and continuous surveillance by the authorities.
..."
That doesn't sound like 11k tons a year to be honest. Personally I'm not sure if trial processing in limited quantaties can generate any positive cash flow.
Regards
Julia
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In previous announcements I believe TOL was said to cover phase 2, I believe in the very short term yes quantities are limited for safe ramp up (known for a while), but in the next few months we should see more clarification in quantities with first feed to kiln and first sales. The 2 year time frame is not a minimum, POL could be given before that, in fact the AELB has said its in Lynas' best interest to apply for POL before 2 years expires. The biggest thing is the political de-risk of the plant, its here to stay.
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(Paywalled)
http://www.theaustralian.com.au/bus...ck-solid-support/story-e6frg9lo-1226465961827
" First cashflow is expected from the December quarter.
..Curtis insists it would be impossible for a new government to change the law in order to stymie the plant down the track."
http://www.theaustralian.com.au/bus...ck-solid-support/story-e6frg9lo-1226465961827
" First cashflow is expected from the December quarter.
..Curtis insists it would be impossible for a new government to change the law in order to stymie the plant down the track."
skc
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Overnight LYC went up ~40-50%. MQG has upgraded it to outperform with $1.20 target. It is unfortunate that the political situation has impeded LYC's progress for so long. I feel happy for long suffering holders. The company can now finally chart its own course without the nonsense.
We will test the above over the next 12 months. Good luck.
We will test the above over the next 12 months. Good luck.
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Timely article, published just before the recent announcement, in Seeking Alpha if anyone is interested.
http://seekingalpha.com/article/844141-buy-lynas-intriguing-hybrid-asset-class
http://seekingalpha.com/article/844141-buy-lynas-intriguing-hybrid-asset-class
Better throw registry charges into that mix as well. Processing share transfers costs money too!
Yeah, and my grandmother can win the high jump competition in the 2016 Olympics.
How about if you go with the facts PinguPingu?
http://rareearthfuture.com/
One thing is for sure: It just takes a lot of time and money to conduct trial processing of lanthanide concentrates in stages and in limited quantities under close and continuous surveillance by the authorities. The authorities are likely to double check on every screw because they are the ones responsible if something happens.
I was laughing hard about the press releases today. Curtis time and cashflow projections can only taken with a great sense of humor. I mean, what is he suppose to say? Any kind of realistic statement would have raised questions he doesn't want to hear because he is likely to have no answer yet: funding.
Let's face it boys: Lynas will need a new CR. I would like to discuss, what kind of funding you guys think is possible before the elections have taken place. Any ideas?
Regards
Julia
skc
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With TOL and a realistic prospect of cashflow in the short term, bank debt will probably do the trick without equity raising.
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Realllly looks like they'll run out of money soon...
-10% in the overseas mkts
-10% in the overseas mkts
Hello!
Realistic cashflows in the short term are now completely off the table. Not only because of another delay regarding the TOL but because of the situation that is quite obviously completely overshadowed by politics. Nobody wants the Lynas issue except maybe the opposition. So the court decision is no surprise and everybody should be able to answer the question if this situation will remain until after the elections that are likely to be held in the second quarter of 2013. My take is that the Lynas issue will be taken all the way to the federal court with a final decision in June/July 2013.
SHORT TERM PERSPECTIVES look really ugly here. It is clear that Lynas needs additional funding as well as an agreement with the Mount Kellet hedge fund. These people are specialized on situations like the one Lynas is facing and it is very likely that they will either take legal action or try to renegotiate the bond deal. It doesn't make sense trying to discuss if yesterdays court decision triggers a reset event or not because we don't know the details of the convertible bond deal with Mount Kellet. Lynas is limited to no more than 80M of additional capital raising. They will need every cent now for another 6-9 month time with no positive cashflow streaming in. Mt Kellet knows that. So what will these suckers do now? Lower the conversion price? To what level? Nicholas Curtis has managed himself in a position that is simply horrible. He might have to accept conditions that will dilute the shareholder value significantly. The alternative of legal action looks even worse.
MID AND LONG TERM PERSPECTIVES are getting worse as well. Lynas is not the first mover outside china, Molycorp is just ramping up production as we speak. REO prices continue to fall due to expectations of additional supply as well as decreasing global demand. Just take a look at this article: http://proedgewire.com/rare-earth-press/rare-earth-prices-slump-due-to-poor-demand/ Especially Lanthanum and Cerium, Lynas core products, have continued to collaps (which hasn't been updated on the Lynas website yet btw
). Long term price expectations regarding La and Ce are ranging somewhere at a dollar per kg, possibly even lower. In addition to these rather groundbreaking facts China has started to raise export quotes again.
Below the line it looks like Lynas has missed the ride on nothing but a huge bubble. The future of rare earth production is likely to be dominated by players that can produce REO well below $5/kg. Molycorp targets an overall production price of $2.77. How is Lynas ever to become profitable if prices continue to fall?
Regards
Julia
disclosure: short
Julia - thanks for your input, but I disagree.
- the court process at the moment is a judicial review, not a standard appeal process. That means it's heard by the High Court in it's original jurisdiction, and can't be appealed - not sure where you get your timeframe or 'all the way up to the federal court' from: High Court is higher than Federal Court anyway
- even if the judicial review is successful, the only result is that the government must issue the TOL again.
- the current government has been re-elected every single election since Malaysia's independence (13 elections in a row)
- the current government is extremely likely to be re-elected
- the current government is extremely supportive of LYC
- the court process at the moment is a judicial review, not a standard appeal process. That means it's heard by the High Court in it's original jurisdiction, and can't be appealed - not sure where you get your timeframe or 'all the way up to the federal court' from: High Court is higher than Federal Court anyway
- even if the judicial review is successful, the only result is that the government must issue the TOL again.
- the current government has been re-elected every single election since Malaysia's independence (13 elections in a row)
- the current government is extremely likely to be re-elected
- the current government is extremely supportive of LYC
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