About stock dilution: Very common for a start up company to reguarly raise cash during early stages of development, shares become diluted. Unfortunantly REO prices crashed hard, not the fault of management. It would not of made a significant difference if they were in production sooner, prices fell hard and very fast. When prices fell, investor sentiment fell with it, share price will drop hard. Sentiment means everything. Low prices then compounded the issue of ability to pay debt. Dilution became a much bigger issue when prices fell.
What is your definition of a "rough patch"?? Todays super low prices would have contributed to a lot more than just a rough patch.
Klumps: Are you still holding your position on TBT?? Would $38.46 now be a good entry, you had said $40. Can you update us please.
You like to make others believe you have such intimate knowledge on LAMP's abilities, but for 2 years you had no idea LAMP can produce oxides until I pointed it out for you. That in itself says a lot.
Your biggest problem is your thinking, you anaylize LYC like it is an already established operation instead of a start up company, and that manangement drove into the ground. It's not a fair view. If LAMP was in full production today at these prices, the SP would still be well below $1 and your discussion would be "lets blame everything on management"
" I still thing a TBT purchase at $40 will tick up to $45 when FED speak comes out with rates going up."
So fed speak came out, 10yr yield dropped over 5%. TBT now at $39.16, dropped over 3% after fed speak.
Will you now buy at $39?
statsmike: I see prices for Nd/Pr have most likely bottomed at the end of December. I do think we are going to have a gradual recovery in the next 3 months in Nd/Pr mostly.. LYC at 5 cents is a buy opp for a trade or to go long in my opinon.
I agree march is not a real test but after June cash level will show if another capital raise will be needed to get through the rest of the year. Now a lot can change in terms of REO prices depending of what China does. I see this as more a wait and see on China actions, not how LAMP is producing.
contraryj: We see you will keep posting your nonsense over, and over and over again. Root of LYC problems is the crash REO prices! Plant design has zero to with LYC issues today. Zero. Are the Japanese so stupid to buy from LYC low quality over MCP? Haven't you said many times in the past that MCP is pure oxide therfore very high quality compared to LYC? Then why didn't Japan pick MCP over Lynas then?? I would love to hear your explaination. Did I show the board your nonsense that LAMP can't produce oxides?
What Nick Curtis said 3 years ago is so irrelevent to the future of LYC is comical you keep bringing him into dissussion. China is in complete control of REO pricing, this will not change no matter how much is produced out of MCP. Show me where you see otherwise please.
klumps: respect your opinons but I just don't see how the feds have a lot of room to raise rates anytime soon. Not a very strong US recovery. Will see if your TBT call to $45 works out for you. good luck.
contraryj: About what I said on prices, note this was posted at then end of the Dec Q. In the last few weeks of December, chinese prices did indeed "start" to firm and move a little higher for Nd/Pr. Just be fair and accurate..
On Dec 18 I said:
Not all negative news. Chinese prices starting to turn higher. From Metal Pages:
Chinese neodymium oxide prices steady on tight supply..12-17-14
Chinese Pr/Nd prices up on lower stocks...12-16-14
Pr/Nd metal market firm on rising oxide price..12-12-14
Chinese Pr/Nd prices firm on tight supply...12-08-14
contraryj: Typical emotional response we usually expect out of you. This time no capital
letters and 4 exclamation points so I guess you come a long way. I did say there were *signs* of upward price movement for some of the REOs. Did not say "prices were going up" but you do like post completely inaccurate information with a lot of mispellings that make for difficult reading.
For two years you had more than a dozen statements that said LAMP could not produce any oxides. Now what kind of dissussion would this board have if everyone reading believed what you said was true?
contraryj: Q4?? Actually Q2 FY15 not Q4. Much easier to call it the December Q to avoid any confusion.
Biggest issue was the drop of REO prices in this Q, compounding that problem was 19 days of reduced Nd/Pr production. You like to "hype" up deception, I see AL telling like it is:
"These sales development actions have been undertaken in a very challenging market environment. Market
demand and consequently market pricing was soft across the quarter. This reflected the continued
uncertainty regarding Chinese government policy and its likely effect on Rare Earths pricing. Many
customers chose to use inventories of Rare Earths rather than purchase fresh stocks. As a consequence,
Lynas sold 60 tonnes of NdPr at spot price into the Chinese market during the quarter. In addition, the
overall depressed demand fed into lower prices which affected Lynas across all products. Significant
market price reductions occurred in each our two most valuable products."
REO prices continues to be the main problem overall, however they are improving LAMP output. If prices can come up from here and continue to improve output over the next 2 Q's than they are in good position for much better cash flow. If they don't than another CR. At this point in time CR is likely by September, they may not have to if prices recover.
Summary of Cash Balance
Cash on Hand and at Call 64.1
Funds for Sojitz interest (Restricted Cash) 6.7
CLOSING CASH BALANCE 31 DECEMBER 2014......70.8
Sixth successive quarter of increased production volume and sales revenue
Equity raising completed, with $83million received (less expenses)
Cash outflows in line with estimated cash outflows shown in the Quarter 1 Appendix 5B
Positive operating cashflow (revenue less production costs and administration costs) of $1.2 million for the month of December
Board renewal completed with a new Chairman and a new Non-Executive Director appointed
At the beginning of this quarter, our priorities were to:
- Finalise the equity placement and rights issue
- Continue to manage cash carefully
- Focus on continuing cost reduction initiatives
- Optimise production to demand
- Grow sales to strategic customers and clear excess stocks
- Target operating cash breakeven in either the December or January quarters
"We are very pleased to have achieved each one of these goals. In particular, our ability to finish the quarter
with a positive operating cashflow of $1.2 million for the month of December, marks a first in the history of
"Hence, my algorithm said I can buy TBT at 42.00 - 42.50 and play the 10 yr. spike up in interest rates for a few days or weeks. I am almost up 5% for two days. This is good money with very little risk."
Klumps: Please update us on your TBT call.
statsmike: I was not commenting about to you, only contaryj in his edd position.. Sorry for the confusion. For now on, I will address the poster userid first. I don't like how yahoo set the boards. They suck.
You are new to this board and I enjoy comments very much. Contraryj and I have had our back and forth about LYC over the last few years.
I find this unbelievable that you had your largest holding in a
losing position over the last few years, yet you bragged on this board about trading LYC and claiming you did better than others holding a long LYC position. You had mentioned you are retired, so how much of the dividend you need to live and how much really is a hedge? Fascinating.
sdan: SVM has sino phobia short sellers, meaning that there is some speculation that SVM has been operating as a chinese fraud. If you have not done research on Jon Carnes than it would be wise to do so. Average price of silver from the last 3 months was around $16.50, Zinc and lead prices have been moving lower. The next Q will not be great based on the
average price of silver lead and zinc. They did increase production 32% with start up of GC Mine so that may offset some of the loss. I do think things are starting line up for a silver rebound so with SVM higher production this can turn for better earnings going forward. SVM announced a buyback it does not mean that is active, they did the same last year without buying back a single share. When SVM annouces they have actually bought back shares and we see better metal prices than this should move much higher.
Silvercorp Metals Inc. A sharp reduction of 2,855,396 shares or 34.7% was observed in the short interest of Silvercorp Metals Inc The interest on December 31,2014 came in at 5,379,690 shares and as per the average daily trading of 3,541,526 shares, the days to cover are 2. The reduced interest is 3.3% of the floated shares. The data of December 15,2014 put the interest at 8,235,086 shares.
I believe the probability is now low for a dramatic slide in Nd/Pr from current levels. Check metal pages chinese prices for Nd/Pr has come up a little from recent lows and I believe the worst is over for Nd/Pr, Dy and SEG. For Ce and La I would expect further declines but to a to smaller degree compared to last few years.. I don't think prices can decline much further unless China suddenly floods the market with REE and I don't see any signs of this happening. China has stockpiled some Nd, Pr and Dy but this has only helped Dy. I'm waiting to hear about supposed resource tax that has been reported in the media which may help ROW prices which be very good for LYC. LYC stated $60m plus in early December and commisioning Phase 2 in progress. They might be able to be cash flow positive even with current prices in the Dec Q or very close to it, more likely in March Q. If this is the case they will have cash flow to be able to make first 2 payments but prices and production need to come up dramatically to make the last 2 for 2015. If prices don't bottom here then I expect another cap raise.
I agree LYC as a direct supplier to Japan is a very good for them and that Japan will buy all REO. But as you can see with both MCP and LYC, prices staying at current levels or continue to slide down will just mean more cap raise and dilution. Just think that REO price is a lot more important to where we see the PPS going in the future.
QE hasn't really propped up gold if you look at the last several years, gold and silver have been in major declines after US and Japan QE, the dollar has been rising significantly pressuring hard commodities like industrial metals and oil. Of course the severe rapid drop in oil causes market turmoil. This hurts weak economies around the world especially one's that have oil and gas as their GDP. Long term will be eventual supply cuts and corporations take advantage of low priced oil.
In about one week, the ECB will probably announce bond buying to reverse their
deflationary downward spiral and we have seen in the past that QE in the short term will prop up metals, gold silver and high risk assets. Not saying that rare earths will be propped up by european QE, but it is definitley a possibility.