think about this all these executives are just going to pick up and move. To a country that English is not even a secondary language. Will they put there kids in these schools? No they will want them in top rated English schools. they will want the company to pick this up. They will want several trips home a year to visit family and Friends. Anyone that believes this will happen as described has not had much experience at senior levels. Yes the offices will be moved to the lamp Yes some middle level managers will relocate as a great career move. But a satellite office will stay at current location and most people will work from there and visit the lamp a few times. there is no way they could afford to relocate the entire Sr staff.
Couple of points. Nd PR is highest $ volume but lowest weight volume. they talked about how many customers preferred Nd Pr who are cost sensitive. This is very true for customers making lower end product. But high performance products that are weight and heat sensitive still want pure Nd. There is lots of markets for Nd Pr but high performance motors and magnets where most of the growth is still want pure Nd.
Next they sold 88 tons less this Q than last Q. They put 500 tons on the shelf this is the highest ever in both weight and percentage. they now have about 1.4 K tons of product on the shelf that they can not or will not sell. Why? they are not saying. This is an bad sign and they have not said anything about. Amanda glossed over that they burned through 22 M in cash. Amanda does a much better job of hyping the company in the true NC style. I would prefer the old EN style where you could at least learn a little from listening to him. Not just be spoon fed the company hype.
In 2012 annual report they said mount weld concentration plant was shut down for cost savings they had plenty. In 2013 they said it was operating in “campaign mode”. Assuming 40% REO in the concentrate I figured that little or no concentrate had been added in 2013. Last Spring I said they would have to start concentration in June July time frame. This was wrong it is now October or November, reason, I did not discount NC forecasts enough! They have to start MW concentration fairly soon if they are going to produce 2 K tons this Q. Restart is always expensive. Lynas’s 2011 and 2012 documentation say Mining and concentrations will be 30% of total cost. I do not know if mining has to start yet but expect a jump in production costs as MW is added in.
Last point is that the Sojitz loan is now 7.5% $16.5 M US, 4.1 M a Q that is $4.7 M AU. Not enough to cause disaster but yet another nail in the coffin.
First good news is that sales were 32.9 M and production costs were35.3M This would indicate breakeven is only 2.4M away more on this latter.
Admin went up from 5.3 to 7.3 which considering all the talk on cost cutting at first looks bad. In reality cost cutting usually causes Admin to spike up. Severance packages, relocation and other expenses tend to cause onetime hits. As long as they go below 5M in the future it was successful cost cutting. But lets not compare future with the 7.3M of this Q. I have seen many companies boost their apparent savings this way.
Cash flow still hurts at (22M) which is made up of 10.5 M financing and 11.6 M operational. cash on hand is 17 million which does not even cover the difference between Payables and receivables of 22 M which is an unauthorized loan See page 37 of annual report.
Few points on production. They produced 2043 tons which is just 161 tons more than last Q. They shipped 1546 tons which is 84 tons LESS than the June Q. 500 tons went into inventory. So Q ending Dec 30 2013 331 tons went into inventory. March 30 340 tons. June 30 250 tons. In June Q They made 1,882 shipped 1630, 250 tons. Now this Q 500 tons goes into inventory, up substantially in % of production and tonnage. Total tonnage now in inventory about 1.4 K tons. Now this is Tons not $, I suspect that it is manly CE and Some La and possible some out of speck Nd,Pr. But not selling product that cost $ to make cannot continue. Just like not paying bills.
Stockdude thank you it was there and is now on web site. you did a good job of posting Amanda's letter. Have you had time to read and think about numbers yet? Have taking some good info in Amanda's letter and data from annual report and drawn any conclusions. Since you posted first I will wait 24 hours for you to post some analysis before I post mine.
I have not seen anything no weather they did or did not make payment have you.
Thanks for heads up.
Please show your assumptions. with over 3 billion shares outstanding and making 20 Kt PA. how much do they have to make assuming a PE of 6 which is average for mining industry. I will even let you use 10 or 20 for a PE. What does the market price have to be for La CE, Pr and Nd to make this number. Your well over a $ is pure fantasy. Please show how they would reach a level of profitability to support that price. Or a SP of 20 cents with a PE of 8. Also include how the debt gets paid. Explain data your fantasy is based on Please
This is a hard call. If the company recovers which I think is slim but possible the stock at 0.08 plus options could be worth quite allot. Flip side is if company goes down tubes it is all gone. Since I do not own any I do not have to decide. If I had a little crazy money I might invest it but no way would I put serious money on the line. The warrants make it a better investment than open market since you are covering more shares for the same investment. I have not looked for any info in a week or so but last time I looked I could not find anything on how long the options were good for. If it is a year or less than I see little reason to buy. IF it is several years the return could be many times the original outlay if the company does not further Dilute stock after this is done. Which stock do you hold is it LYC.AX I am surprised that there has been nothing about this on board if it was offered to CF and DY holders.
I agree it is a prediction. Many predictions are wrong. We learn by putting prediction out t then Seeing what has happened.
what have you learned from all the times you have said with this happening we are going up for sure now over the last year or so.
Significance is this and I talk from experience I gained buying shares end of March and selling after Q announcement in April. For a loss of a few cents a share.
Both of these stocks on a typical day are trading between $10,000 and $20,000 a day. If you want to pick up or sell any volume you do not want to have a large order show up in the book it will influence the price IE Large buy people will keep buying right below your price, Or sellers will keep price above your price hoping to pull you up. Which happens depends on if selling or buying is driving trades that day. So what I did in March is have partial orders for some of the shares I wanted placed against both CF and DY, When these orders were partially filled another order would be added at slightly different price and different volume. I was filled on CF only a partial on DY this was over 3 days. Similar on Sell. No I did not sit there watching this happen. My broker sets this up so his assistant gets a message on screen when order is filled to certain level. Then assistant places new order. Assistant makes call on actual order size and price (depending on what activity looks like) using guidelines the broker and I disuse.
Though they both are tracking LYC.AX they both have different personalities. It pays to diversify across them. If you disagree with this please explain the difference in closing prices over the last couple of weeks.
I make lots of mistakes some of which you have caught and I owe up to them only mistakes that I admit help me learn. You on other hand do not offer much just the tired song it is going up now which has never been correct.
Sorry don't own shares. sent it to a person that should know and it makes no sense with what we know about Lynas. I would suggest call your broker or if you are with just a trading service they should still have a support center that will give you the background. I am surprised no one else could help there are lots of people who own shares. Do you own LYC.AX or LYSCF or LYSDY
Can you ever answer Questions Directly. What does MCP have to do with buying Lynas at 0.08? Per usual you see what you want and remember what you want. Yes I mention MCP allot I feel the two companies are similar and futures are linked. To look at one and not know what other is doing is foolish. There combined output will drive La and Ce prices down! As long as MCP cannot get Alkaline plant running it is a high risk. Lets get back to the Question what do you see that makes Lynas a Good buy at 0.08. I will tell you what I see. I did not want to bring this up till I saw another day of trading but here goes LYC.AX is below 0.08 for 2.5 days now. No one buys stock for more than market price. To buy stock in a troubled company it takes a large incentive like we saw last May. If this continues for a day or so more, Lynas has only two choices Lower offering to the 0.065 to 0.07 range. Or go into default and find a buyer who will want current owners stake reduced substantially. We have a company whose future is very uncertain. Could cause a total loss in next few days or next six months. A company that if they recover their recovery will be very slow. Whose recovery in stock price will lag a recovery in REE prices by 6 to 9 months. So why would anybody want to rush in right now? To buy stock at 0,08? Makes more sense to me to wait to see progress. Will I end up paying 2 or maybe 3 X todays price yes I will. but I did not buy when you recommended when prices were allot more than that. Remember its not total gain that counts. IT is gain over time. Those that wait will have smaller gain than those who buy at bottom but much better performance.
Please see post of sept 29 I give data there. You posted that I was trying to make people think PR and Nd were 25% of Revenue. I was not. In fact I now know why the numbers looked better than I expected. TMR has combined Mount Weld with Duncan. Duncan's Nd and Pr are much better. This biased my manufacturing break even prices lower which helps Lynas. I have an Idea for you rather than critiquing others research why don't you try something new, Go to TMR and Metal pages do some research and come up with some opposing numbers. Then we could have a good discussion on what might happen. For a long time all we have heard from you is that the last problem is behind us and stock is going up. Since late 2011 all we have had is the stock going down and further dilution. Do you have any explanation why you have been so consistently wrong?
So far Cost cutting has had no impact. This is not unusual with termination expenses and other things ( I have no idea what AU requires) It can take several Qs for it to show up. Moving corporate office to Malaysia sounds real expensive to me. Are executives going to move Families? Are they going to commute? A week ago I calculated what they needed to break even on Phase one, it was much lower than I expected. Nothing will make as big an impact as a rise of 50% to 100 % in REO prices. This is actually possible for Nd and Pr but unlikely for La and Ce. If La and Ce do not go up then Nd and Pr would need to go up 150% in the next four months. The problem is if they cannot show positive cash flow by Q ending March 31 Then March payment goes up to $50M US. Which they would not make.
First I just noticed a mistake in my post 2001 should be 20 11 and 12 for 02.. Yes I do read and I do understand Fed actions. Sooner or later the piper has to be paid. Even fed cannot spin paper for ever. Debt has grow from 7.5T to 17T in last 12 years we are adding over 600B a year. Never has Fed stepped in so hard or for so long. We are now addicted to low interest rate. No Economic rules allow this go on. It will collapse . The longer this goes on the harder the fall. The way it will be solved is high interest rates and devalued $ then we can pay back debt with much cheaper $. You can make good money when this happens but only if you are ready in advance. I have consistently expected this too early but it will happen. Look at what happened 28 years ago it is nothing new.
A couple of days ago MCP announced that the second leaching field was operational and this was the last obstacle for MCP to reach 20 KT/YR. This is both very good and very bad news for MCP. On the Good side they can now do 20 KT/YR if there is demand at the right price. The bad news is that they needed this at all. The alkaline plant was supposed to take this material and process it into acids and caustics and pure water for production. This would substantially lower production costs below even China’s cost. Without this plant fully operational their cost for regents and disposal go up substantially. This plant worked great at the prototype level but has been plagued by contamination in the effluent at the production level. We will have to wait for the CC when Q3 data is released to learn just how severe this is. No matter what this capacity lowers the likely hood of any major price increases in La and Ce in the near future.
Completed my first read of Annual financial report. There is lots of good stuff in it and anyone looking at this company as an investment should take half a day to read it. First item I have been predicting they were doing is speeding up Receivables and not paying bills. Receivables are a little higher than expected if I believe what NC said about April production. I would have expected them to have been paid for this by June 30. Receivables were $9.586M. Payables were $31.953M This indicates to me they are paying their bills very late possibly as much as 180 days. It also exaggerates their cash by $22M. This works for a while but sooner or later your vendors will demand cash in advance and a portion of the arrears be paid before they deliver. If these were in balance they would have had only $6M cash on hand at end of June. Information is on page 37.
Lynas still has not updated 8:48AM EDT 10/1 there home page with detail of the Sojitz agreement. But starting on Page 65 is an extensive report on borrowing. People should read this to have a good picture of just how much debt they have and What is Due When. There was one surprise. Lynas has to make certain production and profitability numbers by March 31 2015. If not 35M is added to the 15M due March 31. And the total payment becomes $50M. I do not know all the “Test” criteria but I think it is valid to say if they cannot meet the test then they will not have $50M to make payment. I think Sojitz put this in to be able to end this farce if Lynas cannot get their act straight in 6 Months.
Last item there was a discussion of how many shares are out. On page 9 we are told that there were 2,333,661,566 shares issued on 6/30 / 2014..
thanks to Stockdude13 I have become more diligent about checking home page. Two very interesting things this AM. First full financials for year are on front page and investors page. Still no official release of latest deal that I could find. Some time to day I will go through the financials.