Lynas Corp Survives the Price Bust in Australia

Rare Earth Deposits & Mining / Rare Earth Exploration, Mining, Processing, & Uses

Date posted: 12/02/15

Michael Roddan reports that Australian rare-earths miner Lynas has emerged from the industry boom-and-bust as the lone survivor, and as chief executive Amanda Lacaze begins to market the firm to ­investors. A resurgent Lynas has seen its stock rally from a low point of 3.3c earlier this year to 11.5c at the close of trade on Monday (closing at 11c yesterday), taking the ASX200 company market capitalization from $115 million to more than $400m in less than three months. This is a recovery from near death, Foster Stockbroking analyst Mike Harrowell told The Australian yesterday. The current managing director (Ms Lacaze) has bitten the bullet very hard. Lynas is the only new rare-earth producer to emerge from the boom. She told The Australian the 2015 financial year was one of focusing on getting the basics right. I did not spend a lot of time out in the equity market talking to investors last year, Ms Lacaze said. Lynas history has been long and chequered. Fixing the way we present ourselves to the market will not happen overnight. She added that success in the valuation of the company follows success in business. The prices for rare earths, a term for 15 different minerals that are not all-together rare but are difficult to extract, reached a peak in 2011 during a speculative boom before declining sharply as the global economy slowed. Lynas shares plunged from a high of $2.55 in April 2011 to a low of about 3c, with the original 92 million shares on issue having been diluted to around 3.5 billion in order to survive as a company. At 3c a share, the market was absolutely saying it was unsure if the company was going to survive, Mr Harrowell said. At the current level it is saying it is going to live but we are not sure what the earnings are going to be, he added. The stock tops Ord Minnett best ASX 200 performers of the past 90 days, with a move of 251%. The surge came after the company restructured its debt facilities.