LYC - Lynas Rare Earths

[BIG BWACULL]

7,562, 590 Shares through at 7:38 this morning. Where did these come from Oh just got it conversion of more oppies on the 11th april announcement

 

[BIG BWACULL]

One buyer took out $1.02 in one swoop 1, 154, 459 shares were taken up someone out there is keen

 

[gardenmyrna]

Lynas in the US is listed under LYSCF on the pinksheets, up over 15 % today . I may just be ahead enough to visit your great country !!

 

[Mumbank]

Yes, I was excited about that little run yesterday and now I know why. First contract excellent, US$90M over 5 years. here we go.

 

[purple]

yup, and that translates into USD 18mill each year, and will increase as this contract is based on 'current prices' and is unhedged.

i've been following other producers of RE to see how the market is performing in this industry.

China RareEarth (ticker 0769 on the HongKong market) is HKD 3.5bil (AUD0.5bil)market capped and has 1.4 bil shares. It is a RE producer which operates mainly in China.Total sales for year ending 06 increased 51%.

note that China has imposed quotas/restrictions to shake out the lower quality/smaller RE producers. this has led to RE producers within China to profit.

following good profit for RE producers within China like ChinaRareEarth, I can only see upside for LYC based on the strong demand for RE.

 

[gardenmyrna]

I love the info shared on this board, not the usual bashing like some otheres. Any thoughts as to the SP in 6 months to a year ?

 

[nioka]

I love the info shared on this board, not the usual bashing like some otheres. Any thoughts as to the SP in 6 months to a year ?

In most cases a companies SP tends to have a good increase as the start of production draws closer and I would expect this to be the case here. To quote a figure is purely speculative and considered ramping on this forum. As everything appears to be going to plan I am happy to hold and expect a good capital gain.

 

[fmoraes]

So, one question: when is the mining really supposed to start? I've seen June/July 2007 and June/July 2008.

 

[BIG BWACULL]

So, one question: when is the mining really supposed to start? I've seen June/July 2007 and June/July 2008.

Check 9th may announcement "sydney roundup presentation" page 29, that whole presentation should help you out.

 

[nioka]

So, one question: when is the mining really supposed to start? I've seen June/July 2007 and June/July 2008.

Production was to be carried out in China, commencing 2007. The company is getting a much better long term deal by setting up it's production in Malaysia. This meant building a processing plant from scratch and delaying the start up until 2008.Check company announcements over the last 6 months.

 

[purple]

from the Quarterly Report ending March 2007 :

June 07 - commence mining at Australia
July 07 - commence building factory at Malaysia
Nov 08 - projected date of production & sales

the quarterly report might be a bit confusing for those unfamiliar with the LYC story, as they talk about 'drilling holes' in Malaysia.

the Malaysian soil is loam/clay soil, which needs foundational piling for construction of the factory, hence the need for soil investigation/drainage studies etc.

 

[purple]

Nice!

"Hybrid cars the go as fuel price rockets"
http://www.smh.com.au/news/national...l-price-rockets/2007/06/09/1181089388315.html

snippet from the article :
SELLING LIKE HOTCAKES
* First Toyota Prius on sale in Australia in 2001 - 137 sold.
* In 2006 - 2000 sold.
* First five months of 2007, 1300 sold. May tally of 380 sales is monthly record.
* Costs $37,400 to $46,900.
* Honda Civic Hybrid costs $32,990, but regularly sells out its 80 cars a month allocation.
Source: Federal Chamber of Automotive Industries.

 

[Kieran]

Excellent news purple!
I've got to say I'm optimistic with Lynas' future considering the news regarding China restricting/banning RE export/production. I've increased my holding by 2000 shares as of Friday at $1.05 - same price I paid for the first 600 in late April - I know, bad idea buying so little but it was my first share purchase - you live and learn! Taking an ultra-long-term view on this one, any sort of action is still likely to be 1-2 years away.

 

[purple]

well, Kieran, I feel LYC can put behind the note conversion and May/June to start moving on the price like it did before.

usage of REs are increasing all over the world. this industry hasn't had the kind of hype that uranium enjoyed, but the upside is there.

of course the risks still exist, but i think the gain far outweighs the risk as LYC has far passed the exploration stage and already started digging the stuff out of the ground.

 

[lryu]

Has anyone thought about why Goldman & Merrill reduced their substantial share holdings in the company?

 

[ta2693]

Yes. I think it is not a good sign.
But I do not worry about this. Because i know it is the only rare earth producer out of China. It is the only reason for me to hold long term. (at least 5 years).

 

[purple]

Has anyone thought about why Goldman & Merrill reduced their substantial share holdings in the company?

Goldman Sachs and Merrill Lynch reducing their holdings? Reducing without any change in fundamentals, I’m not worried.

GS has been holding LYC since the $0.20-0.30 mark, so selling 14% of their holdings now would make them a tidy $5.7million profit. Imho, financial houses need to sell from time to time to post an outstanding profit chart for their ‘high net worth clients’.

ML let go of about 9million shares (22% of their original holding ) as ‘stock collateral’. The information provided in the ASX announcement is a bit too sparse to comment on, but my guess is that the reasons are the same as GS.

LYC’s fundamentals haven’ changed. They still have :
30 year mine life, @ 20kt per annum (Huntley’s Recommendation 19.04.07)
= total 600kt of RE in the ground
= total resource insitu value of USD 5.4 billion
= yearly gross profit of USD 180 million

Calculated from current price of RE :
1 kg RE = USD 9
1 ton RE = USD9000
1 kton RE = USD 9 million

How much better can you get than a miner that is about to start digging up ore, and has :
 No competitors in the western world until 2010
 1 anchor customer and many customers lined up with fixed contracts at unfixed prices

And after every bit of RE is dug out of the ground, LYC is not finished yet. There is still the Rare Metal ore in the ground underneath the Rare Earth. Now, that’s valued at 5 times the value of the Rare earth, which is about USD35 billion worth.

The only reason LYC is still at a sp of $1 is because the RE industry is still lesser known than other industries :
 Uranium miners that don’t even have a JORC are $2 (AGS)
 Oil/gas miners that are exploring/developing are $3 (AOE)

LYC is still trading at very undervalued prices, and I’m still sticking with it. 65% of my portfolio is on LYC – call it crazy for the under diversification if you wish, but I see the potential.

 

[purple]

i'll add, the road ahead is not a bed of roses...I"ve stopped using stop losses on LYC cause I just keep getting stopped out. I expect the sp of LYC to trend upwards, but fluctuate a bit as LYC forge ahead to pioneer the rare earth benchmark product.

 

[Lachlan6]

(LYC) is displaying the formations of a very bullish pattern at the moment. If the ascending triangle can be broken, than I will jump straight in to this one. OBV supporting it very nicely. This is classical institutional buying in my opinion as the fall in April was due to the weaker hands getting out for a nice little profit, whilst the insto's were licking their lips and buying in at cheaper prices. This has huge potential IMO.

 

[purple]

Great chart, Lachlan6, I had actually stayed away from TA for LYC cause they weren't too cheerful the last few days..MACD's a bit sluggish, RSI's, Stocs all not showing strong signals at all.

Yep, the OBV's got a nice upward slope. Not heavy accumulation, but accumulation nevertheless. Great news.