LYC - Lynas Rare Earths

[skc]

Here's a good article about the plight of LYC.

http://www.forbes.com/sites/timwors...-the-great-rare-earth-shortage-is-truly-over/

Having another think about LYC and it's situation. I think the Jap is being really smart.

Rare earth is an important resource, and LYC is a strategic asset. Without LYC coming on line, the Jap might still be paying $200 basket price and really at the whim of Chinese export authorities. The loan to LYC is a sunk cost, but it's paying off handsomely in terms of reduced cost of rare earth. So while the Japanese it taking a significant risk on the loan itself, there are plenty of rewards already and probably ahead overall.

So it is absolutely in their interest to keep LYC alive. And if they can do so by simply extending the loan repayment schedule and let equity holders underwrite them and fund for production of cheap rare earth, it's a no brainer. This changes of course, if there's even more alternate sources available (e.g. Molycorp). Overall, however, it's really not a good place for equity holders.

 

[PinguPingu]

Glug, glug, glug, down the drain-hole for Lynas... Wonder what the underwriters are going to do with all their stock

 

[pixel]

Glug, glug, glug, down the drain-hole for Lynas... Wonder what the underwriters are going to do with all their stock

Underwriters are usually quick to offload their overhang to their "sophisticated" clients.
Sometimes though, they may also hang on to it and wait for better times. If Lazarus managed to come back ...



I've started buying and will add if 5.8 becomes support.

 

[pixel]

Let's try again ...



Earlier this week, I've traded a few swingers; today's Quarterlies make good reading, especially the bit about positive cash flow. On the flip side, comments about the modified "take-or-pay" arrangements are still a bit vague, as is the outlook for future price development.
Currently, I hold a half position; if 4c becomes support and holds, I'll add; at 3.6 I'm out.

 

[Gringotts Bank]

Whoah. The further it goes, the further it goes.

 

[nioka]

A change in the fortunes for the long suffering Lynas shareholders. The new management seems to be turning the ship around. In saying that there appears to be a leaky boat with the shares taking quite a leap up today without any news announced.

 

[LRG]

A change in the fortunes for the long suffering Lynas shareholders. The new management seems to be turning the ship around. In saying that there appears to be a leaky boat with the shares taking quite a leap up today without any news announced.

Still dragging along the bottom, no change in direction yet?

 

[pixel]

Thanks, tech/a, for the reminder in your breakout thread
For all that may have lost sight of LYC: I'd set an alert for break above 8.5c.

 

[pixel]

Today's comprehensive RE analysis, published by GGG, reminded me to revisit LYC's chart. Quite an eye-opening experience, especially with the Fibonacci levels added in:

The break of 10.5c will need to be confirmed, but it does look likely the erstwhile resistance has turned into support, with 6M bid at 10.5 vs 2.5M on offer at 11c.

 

[pixel]

If LYC's sp can get past 14c, I'll rather buy and not sell. Long-term projections as per the 4-year chart would suggest a multi-bagger.

This morning, "someone" seems to be keen to keep a lid on the sp, selling small quantities into the gap between 11.5 and 12c. That kind of behaviour is normally an indication of buying interest.

 

[McLovin]

If LYC's sp can get past 14c, I'll rather buy and not sell. Long-term projections as per the 4-year chart would suggest a multi-bagger.

View attachment 71727

This morning, "someone" seems to be keen to keep a lid on the sp, selling small quantities into the gap between 11.5 and 12c. That kind of behaviour is normally an indication of buying interest.

It got a write up in Chanticleer in the AFR yesterday...

The story behind the survival and subsequent revival of rare earths supplier Lynas Corp is as much about the disciplined management of chief executive Amanda Lacaze as it is about China's decision to crack down on rogue Chinese suppliers causing environmental damage.

A third piece of the Lynas puzzle is the growing use of rare earths in magnets used in the car industry and in renewable energy applications such as wind turbines.

A fourth and final important element in the resurgence of Australia's only globally significant producer of rare earths is the role played by Japan.

Japanese entities, both private and publicly owned, kept Lynas alive by providing a financial lifeline when Chinese suppliers flooded the rare earths market and crunched prices to record lows.


The resources sector is no stranger to geopolitics. It's just that in the rare earths space the protagonists were operating behind closed doors. No one really knew who was pulling the strings that manipulated prices.

Read more: http://www.afr.com/brand/chanticlee...ut-of-the-woods-20170704-gx4j5p#ixzz4m0l4MsRt

 

[PinguPingu]

The green shoots of Lynas' recovery continue to grow, price has retaken 20c and the company has announced it has repaid some of the JARE loan facility. Rare earth prices also on the move.

Disclosure: Long at 18c.

 

[Wyatt]

I see 2 x my LYC holdings in a/c this morning, with the 2nd lot @ $0 cost. That sure makes the P&L column look fantastic!
Anyone else in the same boat or have you all jumped ship

 

[greggles]

Fantastic run over the last 12 months, but the chart is starting to look like a double top at $2.60 to me.

 

[leyy]

Anyone still holding/following LYC? I purchased more LYC at $2.31 so my average price is about $1.90 now with a reasonably parcel of shares.

The recent dip was due to the government changes with a new prime minister announced two weeks ago, so thought it was a good opportunity to buy more shares. (although there is some regulatory/government risks)

The fundamentals of the business is strong and LYC are now cash flow positive.

Amanda Lacaze (CEO) has done a terrific job with transforming the business over the last few years.

Demand for the rare earth minerals continue to rise for batteries, electronics, glass and motors etc.

 

[greggles]

Well, I was wrong about the double top at $2.60. LYC ended up hitting $2.96 on 8 May but after that declined to $2 over the next two and a half months.

Price action today and yesterday indicates that Lynas is on its way back up. From support at $2 on Friday through resistance at $2.20 to $2.38. If it can get through $2.40 easily it shouldn't have any trouble getting back to $2.60 where it will next encounter some resistance.

 

[leyy]

Well, I was wrong about the double top at $2.60. LYC ended up hitting $2.96 on 8 May but after that declined to $2 over the next two and a half months.

Price action today and yesterday indicates that Lynas is on its way back up. From support at $2 on Friday through resistance at $2.20 to $2.38. If it can get through $2.40 easily it shouldn't have any trouble getting back to $2.60 where it will next encounter some resistance.

View attachment 88518

Good quarterly update.

Strong positive cash flow for the quarter $20.7M. Paid off further debt $27M.

Strong demand for rare earth's from existing clients in Japan.

I think LYC will pop once it clears any uncertainty from the new Malaysian government and there are no issues.

 

[peter2]

Good looking BO-HR for a reversal opportunity.
Untradable for me due to too many issues with Malaysian gov't.

 

[sptrawler]

Westfarmers making a $1.5b play for Lynas, jeez it has been a bumpy ride, bought them a million years ago. But offloaded when the Malaysian Gov gave the plant a hard time, even before it was up and running.
Hopefully WES don't get burnt.

 

[Smurf1976]

Westfarmers making a $1.5b play for Lynas, jeez it has been a bumpy ride, bought them a million years ago. But offloaded when the Malaysian Gov gave the plant a hard time, even before it was up and running.
Hopefully WES don't get burnt.

Price is up 33% to $2.07 at the moment.

I sold today