Thanks J Read their announcement on Lynas WEB site, So a Japanese company could not get it done in 4+ months. But because they have such a good relation with Sojitz they will get it done in two weeks. If this is so why did they spend money on Normura in the first place? Why did they not give Normura the boot after a month or two when things were not moving? What is really amazing is they dispense this illogical garbage and expect people to believe it. I guess the stock price says some do.
Any Idea when this was released? Was after AX market closed? After US markets closed? I agree this should have sent stock into tail spin unless it was released near or after US market closed. No news service appears to have picked it up yet so I expect it is fairly recent. Lynas management picked Norma and now 4 months and 10 days later with only 15 days left they abandon them! Someone should be taken out and shot for this one. This will be very educational to watch unfold.
Anyone who is positive on Lynas should go over all the statements issued in May and June by Lynas.
The following two statements are from Lynas and are in the May 5 release “Capital raising and business update” on page 6.
“The Aim of Lynas and Norma Australia is to complete this transaction well prior to September 2014”
“Further details will be provided as they are finalized”
So here we are Monday is September 15 no update and 40 Mil due in two weeks with no way to pay it and keep operations going. No details finalized. ?
I agree The unique characteristics of REEs give them a bright future. But the price roller coaster cost dearly. since you mentioned converters WRGrace the biggest makers of Catalytic converters for cracking petrochemicals came up with a way to take half the REE out and they work better and last longer. That sent MCP into the read after several Qs of black. I do think it will come back but both these companies have some major obstacles to overcome before things get better.
I may pay more when things get better but my guess is they will go lower first. They are so out of favor that those that watch carefully will have plenty of time to get back in. If I miss by a little I will do fine. If I miss by a lot there are many other opportunities.
One person cannot make a company. One bad CEO or Chairman can destroy it pretty fast. Take smith he was a dreamer as well. He started the whole phase two business. Justified it with elevated prices that many questioned. I met him at IPO road show I was impressed until I listened to him answer questions. Others there really impressed me. He tried to grow company with purchases rather than hard work. Luckily MCP removed him entirely.
I am out of Lynas entirely I am in MCP a little, with calls. If MCP can get the alkaline plant running I will be buying. So far story gets worse every Q. It was a great idea and I hope it works but with today’s prices MCPs production costs are too high without it. Lynas has a payment due in a few weeks of just under $40M they do not have cash to cover this! On May 5th NC said everything was going to be fine with Sojitz, 4 months latter and still no deal. I expect that even if deal is announced today it will not be good for current stock holders. Do you include Lynas and MCP output in your pricing forecast? Look what the non Chinese world uses of La and Ce and look at what Lynas and MCP will produce at 30KT PA combined and tell me how prices can go up. La and Ce are more than 70% of both companies output If they cannot break even on these they cannot make a profit.
Totally agree that REO pricing is the major cause of todays SP. The delays and NC handling of them is why I got out. When I first got out I said I preferred not to go through turbulence and I expected to buy back In when plant was stable. I expected I would buy back between $1.00 and $1.50 back then. Never thought we would see this. But think where lynas would be today if the construction of phase 1 was closely supervised. That NC had waited for phase two to see how phase one did. They would have had two years of profitable operation. they would have $500 M less debt. maybe instead of phase two they would have a small plant to take the HREO and process it into finish goods. I labeled NC as a dreamer who did not pay any attention to detail and did not put staff in around him to do this. He did hire EN to do this but I am afraid he did not pay much attention to him.
First I think your comment about 50 times is rather low I am sure it is a couple of hundred since I first sold all my holding at $1.46 and recommend other do the same. Reason NC cannot predict anything and judge problems at all. The plant was a very old French design sold to Chinese Yes it was updated with modern control and monitoring systems but basic design is old. Also there was little or no supervision during construction. OF a total of nearly 3 years delay only 5 months of this was License problems. Unfortunately NC blew lots of smoke around license and hid the plant problems. Yes the stock had a few pops but when was it ever up over 6 months while I have been saying things look bad?
If your definition of "ballz" is buying a stock that you only see only down potential for in the near future then you are right I have none.
Since when is a contrarian a high risk taker? A contrarian looks to see why the crowd is going in a particular direction and looks for faults in the popular logic then takes action. No faults no action. Looking for problems in popular direction has helped me allot. I avoided the dot COM process and that's when I took on the ContraryJ handle. I avoide the banking crisis the same way. When I started pointing out problems at MCP everyone laughed. I was early got out in high 50s and low 60s. Went into Lynas Walter J and Tolly thought I was crazy for getting out I do not think they think that now. One last thing Contrarians do invest when everyone says the future is bad and they see signs of change. They also hedge when everything looks great and they see a change. Its about going against the flow not risk taking.
Now another prediction The market is doing great but there are some dark clouds on the horizon I am slowly restructuring my portfolio to be able to ride out this turmoil
So here we sit about $40M due in September. Almost $50M in March and again Sept. 2015. and then in 2016 $300 M due Sojitz and Norma combined. Any one that thinks their stock will not be severely diluted, if it does not go away entirely, needs to explain how so I will start buying.
for record they had $38,144 M end of Q Hope we get details in annual report soon. I suspect that at least $8M of $38 is smoke and mirrors like not paying vendors and advance payment for product in return for better price. Maybe a few Executives delayed salary but this will all come out in annual report.
Friday it will be 4 full months since financing was announced. First part was $40 M stock sale, it went very well. Second part refinancing of Sojitz loan which has a $40 M payment due in September. IF this does not get done then they go into default the day it is due because they cannot pay it and continue to operate. For nick to announce this on 5 May he had to at least have a hand shake. with Sojitz so my GUESS is they have been talking about this for over 5 months. When deals drag out the weaker party usually takes a beaten. When stronger party wants deal they make concessions to make it happen because they have wiggle room weaker party is up against wall nothing to negotiate with.. So just like GWM got a bad deal when Joint partnership kept getting delayed we can expect same here. My guess is deal will have major dilution of current stock holders if they are not flushed entirely. It will probably also remove NC and his friends from board. For a couple of reasons this is probably causing Lynas to sell product below market. Companies just do not buy from companies with unclear futures unless it is a very good deal. When future is unclear you have nothing to bargain with except low price. This also hurts Sojitz who will have to pick up pieces. So if this did not get Lynas and Sojitz to resolve this issue quickly then you know deal is in trouble. Deal very well may be announced this week but it will not be as favorable as NC lead us to believe May 5. We may also get a few week postponement by Sojitz but this is bad as well. IF they could not reach a deal in all this time it just means Sojitz is taking out all they can.
I never had any doubt they would get POL rather surprised it was an FOL. Unfortunately my reply to bigalslab was taken down but this is A non issue compared to what needs to happen in next few week. Maybe I will repost.
I totally agree we are almost there. Not sure, but I think we have a different view of "there"
NC on 5 May announced a deal with Sojitz that deferred Sept and later payments till 2016. Here we are 1 week short of 4 months and less than one month from the payment being due and still no deal. This deal does not happen and your stock will become worthless. They cannot make the Sept. payment. The longer the deal takes the worse it is for the weaker party. If the stronger party wants the deal they will give on a few items to make it happen. The weaker party has little room to give on. So deal drags out till last minute so stronger gets all they want because Weaker party is desperate. If deal is announced in next few days it will not favor Lynas. If no deal then stock goes away or becomes worthless in some type of financial reorg.
You are correct. I do not understand your point. current non china consumption is 8 kt a year down from 10 for La, many companies lowered use when prices were high. at 10 KT year for lynas and 20 for MCP combined production is about 9 KT a year of LA Who do you think will be pushing La prices down? Ce is worse and has always been in over supply.
Take WRGrace as an example. before 2011 they were the biggest non Chinese consumer of La. they used it for petro catalysis and a little for automotive catalysis. When prices soared they came out with a new Catalyst for petro cracking that used half the La and worked better. It needed a new plant to make it. They built the plant in China. This action took MCP from being profitable with their pilot plant to being in the red.
Your percentages are about right but I think you need to look at volumes not percentages. Non of us really know. Numbers for legal production in china are a little fuzzy when they come from government and illegal production is a pull it out of the air at best.
Disagree LA and CE prices for non china customers will be controlled by MCP and Lynas. If the need for cash and production cause them to go to 30 KT PA Combined pieces for La and CE will tumble and neither company can make it if these two do not pay their cost of production. Which at todays prices they do not even cover 50% for Lynas and only 75% for MCP If they both make their guestimates for production costs.
Never was challenging what you said. Please read what I asked not what you think I am going to say. All I asked is that you reread article and clarify how many tons of what was shipped because there was major contradictions which I think was confusion over oxide and ore. Your second post is much closer to numbers I have seen but does not agree with any of the numbers in your first post. I will agree no one really has a handle on size of illegal shipments and they are important. It is why I wanted you to clarify.
I do question if there is still a large illegal market. Much of the illegal market does not have technology to produce the CREOs The technology used to produce what they do produce is old and inefficient but they do pick up a cost advantage buy discarding there waste that is very polluting. At todays prices I question if it is worth it. Also I believe China could shut down all the operations if they wanted to. The pollution is large it can been seen from high flying aircraft and satellite It makes these operations easy to find.
Need some clarification. In title you say "China's current IllegalREE production at 50,000 tons" this is several times higher than anything I have read for all non China use. In text you say "rare earth ore production still reached about 40,000 tons to 50,000 tons in the domestic market" Ore is quite different from REE since few deposits have even 10% REE in the ore we can assume that this would be 2 to 4 K tons REE. Went to their website but since I am not a member could not see enough to make any sense.
With 4 straight Qtrs of higher Production and Sales as announced today on their Web Site, and a Full License expected to be announced soon this is a great buying opportunity.
Could I have some of what ever you are taking? Did you only look at the pretty PIE Charts and figure everything was ok.
Fact they burned through $32.2 M and NC told us 10 weeks ago this would be a cash neutral Q
Fact they only have $38.1 M left
Fact if Sojitz does not Redo the loan they have a $40 M + payment due in September this would put them in instant default.
Yes this Q was better than FY Q3 but barely matched 3X March's numbers
Fact Production was down in May and June from the highly published April.
ASP is down $4.38 and they still did not sell 15 % of product.
Fact Production cost were $23 / KG well above ASP.
Please Show me what good news you see. Do not take Lynas’s pretty charts and word where they compare against previous Q that had a terrible Jan and Feb included. Compare against March and APRIL. For 4 Qs they have been comparing just the last month against previous Q now they shift all parameters and tell us it is OK.
Please do not delete your post. I want others to see it right besides your $0.25 prediction for this week.
If this was US then Yahoo "Headlines" would already been full of class action suites. Laws vary from country to country. When you buy international stock you play by their rules and live with info they publish like limited Q reports. As a Holder of Dy or CF you cannot bring a lawsuit against Lynas. You can bring one against Mellon bank if you hold DY or the NASDAQ brokers that sponsor CF. I can not see where either did anything wrong they just made a market for what people wanted. IF you think international stocks are the same as US stocks that should be first sign that you should go very easy in international investing. Do I like it absolutely not. It is one of the many factors that made me bail very quickly on Lynas when things did not make sense.
Couple of comparisons FY Q3 to FY Q4 without fancy PIE charts.
In March they produced 575 tons, Times 3 = 1725 tons. FY Q4 they produced 1882 tons which is just a little higher run rate. If you subtract out Aprils 709 T they made 1173 T in May and June or 586 T / Mo. About Marches run rate. For FY Q3 production costs were $ 40,689 divided by 1089 T = $37.40 per KG. For FY Q4 it was $23.00. At first this drop looks very encouraging. It is too large. My speculation and guess is they paid all sorts of overtime in FY Q2 & Q3 and ran plant in inefficient manner to make volume numbers. They are now taking some of what EN said to heart and only making what they need, which leads to efficiency. Even at this rate they are losing money rapidly. Even if Sojitz Refinances Lynas does not have cash to make it to December. My guess is early November. I have no Idea what Sojitz is thinking but I certainly would not REFI this management team. IF they do not REFI there was only $38. M cash end of June probably about $30 now, they cannot cover the $40 M US payment due in September. The company will be in Default.