OK note one does agree with you. Up till now every report was US I missed it. I think this is an improvement over using US $. I am sorry and thank you for pointing it out.
Page 22 Interest payable 49,761Trade 32,79 borrowings. 26,878. Trade I think you should get. Borrowings are things like when water processing was finished at Mt Weld the vendor deferred payments. Interest Payable I still do not fully get it will take allot more understanding But they only owe half the differed interest, end Q4, about 11M so I am assuming they have loans from larger vendors on payments ,
Phase one was designed about 2007 a copy of an older Rhodes Chinese design, upgraded with modern monitoring and control as well as equipment, process unchanged. To Control cost To prevent all the overruns that occurred on Phase one NC made phase two an exact copy of 1. Your claim of current administration knowing what they are doing with plant function is wrong. Not because they are not smart they have proven they are. It’s because they had absolutely nothing to do with it. Modern plants have reagent recovery, Heat Recovery, fully separate Nd Pr, fully separate La and Ce. Seprate out 50% to 80% of Ce early in process to avoid cost of processing IT. This plant has none of these. This plant uses Propane for Fuel yet another high impact item, I think for everything, I only know Kilns for sure. They are the biggest users.
Mine going down further than original design plans. I guess Amanda made it up. Here is her statement. “The next mining campaign, previously scheduled to have commenced in FY16 has been deferred into FY17. This is possible due to a combination of actions including: the treatment of stockpiled Li ore in the feed blend, increased recoveries and a change in the mine plan which will target ore below the current pit deferring the overburden removal required for the lateral expansion of the pit.” It is in the Q2 report. Do not misunderstand me. With their cash problems I think all these actions are very smart. I said that when I first pointed this out. I am all for what they are doing. But all these actions defer current cash expenditures into the future. It is critical to understand that future costs and cash burn will be higher.
Here is these May loan terms NO PAYMENTS to Restricted cash
“ key amendments are as follows: 1. All interest payments that were scheduled to be made to both lender groups from May 2016 to September 2016 are postponed to the end of December 2016 without additional interest or penalty. 2. The US$2 million principal repayment that is due to JARE on 30 June 2016 will be paid by redrawing funds already deposited in the JARE restricted interest account. Repayment of that amount into the JARE restricted interest account is postponed to the end of December 2016 without additional interest or penalty. 3. The balance that has already been deposited into the JARE restricted interest account in respect of the period commencing January 2016 (being approximately US$1.37 million) will be refunded to Lynas, and repayment of that amount into the JARE restricted interest account is postponed to the end of December 2016 without additional interest or penalty. These amendments reflect the continuing support of both lender group.”
No interest was due Feb or March from original contract. All that was paid in Jan refunded. I did miss that the September payment is not waved. But that makes it worse and is a major hit to Q1 free cash. For further proof that nothing has been going into restricted cash
Balance end Q2 $33.5M End Q4 $32.9M Read above and you will see where the Jan payment was refunded that is DROP in Balance.
So its OK for Jare to lose money. To loan money and not try to recover it. The money was there for reasons and they have to take action. Strange world you live in with free money all over the place. A Loan is a Loan and when people are in default the entity responsible cannot just wave it off. If you disagree please meet with my mortgage holder.
Lastly when I say I think it is my opinion taking a good look at numbers, it is opinion. I welcome your rebuttal but please give me something better than plant has improved (agreed with many Times). You failed to mention where Prices would have to instantly jump 70% to make December Commitments. I would have expected you to attack this because it shows how hopeless it has become. But instead you point out some legitimate errors that I made but that when it comes down to it makes little difference if they need 63% which is the number after your correction or 70% . Prices will go up but do you think we will even see 30% by 2018???? What you just cannot seem to fathomed, is that you are correct in your observation. It just is not soon enough or big enough to help. You are total ignorant of how big the problems are and how little time is left. In my example I said assume they only need AU 200M to settle very favorable terms with Mt Kellett and JARE. Then added $180 for other things that needed cash. I Then rounded $380 down to $300 just to stop petty arguments Even with both these reductions to accomplish they need a Jump of 50% in ABP to raise sufficient cash in 8 Qs. To meet payment Q1 and Q2 they need a ABP jump of 63%, changing my numbers for your comments. So in spite of me taking off $80M by rounding down you decide to say it is hogwash because I am 10M high on one number. I also said only 200M needed to get very good new terms on Jare and Mt K, You are correct with your 562M number, But my 200M is still less than 35% of what was due summer of 2018. I admit my mistakes. I hope you admit yours on lack of mine expansion. Interest going into Restricted accounts when it is due in December as well as principle. I hope for your sake you sit down and do some serious calculation on how much prices need to go up. What happens to ABP as they start shipping more La and Ce for under $2/ KG. You are correct the improvements Amanda’s team have made to the plant are amazing, especially when you consider what they received from NC. It is still an old design. Yes the feed pumps for the 4 kilns have gone from failing once every couple of days to needing to be entirely replaced every 6 weeks. That’s one every week and a half. Please see
https://www.lynascorp.com/Shared Documents/Investors and media/Announcements and media/2016/Diggers and Dealers Lynas Presentation 020816 ASX 1578169.pdf She talks allot about improvements and these are great. Read between lines and see what she got from NC and how much still has problems. Yes prices will go up but your continued assurance they will go up shortly with no comprehension of how much is needed is getting tiresome. Time is the and amount needed is the killer. When the April deal was announced a 20% price increase would have let them raise the cash needed in 8 months for December payments. Now in September they Need a 63% increase to make it in three months. It would be more but the improvements to volume and quality of Nd Pr helped allot. It is time for you to think allot more about time remaining and size of problem before you say all these things are going well (which they are) and that should do it.
Again sorry for the mistakes that distracted you. I should have waited till I fully comprehended report. I knew some stuff could be questioned and that is why I rounded down so severely so they would have no impact. To key points. Prices will not go up enough. With only 8 Qs left the only solution is a total restructure. This restructure will reduce current stock holders holding in the company by 70 to 100%.
I still think going private is best solution but I would need to talk about allot of companies that have done it Like DELL to make point.
(20min delay)