JJ - yes LYC can be profitable. I have various numbers based of different assumptions of around the -5 to +10m based on 100% of 11kt sold, to contract or spot.
As I've said on many occasions the REE prices increasing (of course demand plays a key but one would have thought this is a given based on standard economic theory), and the AU$ rate.
The AU$ rate is currently more than making up for the still falling BP (albeit much slower now).
If LYC can get the LAMP2 product sold at 100%, then the SP, IMO, could be heading for $1+.
The trend-line down for the AU$ is a positive albeit with $400m loans in US$, as these could be refinanced into AU$ loans once solid profits are being booked.
At the macro level we live in uncertain times (was it ever any different) and there are a number of risks out there across many parts of the world economy. In Aus we have had so many years without a recession that we almost expect it as a right these days. Spending a lot of my time in the US, over the past 5 years I can tell you it is hard for a lot of folks, and any rebound may be a lot slower than the pundits suggest. Europe is still a basket case. Japan and had 20 odd years of deflation and the current fiscal easing is outside on anything used before on a scale Mr Richter would have been amazed at.
These macro challenges, IMO, are the major risk issues over the medium term, and will impact LYC SP one way or the other.
For those hoping for a SP > $1, it may come, but may not happen for a few years yet. In that time where is ones $ most profitably used?
Until we get some hard numbers, probably in July 2014 to make a good call on future profits the SP will remain under considerable pressure. It will be volatile on any news, REE price movements and of course the AU$.
ALL IMO.
Best to all.
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