The end of the fourth round of rare earth national tender, page-18

First let me say what it is not. It is not positive cash flow. Cash flow can be changed by paying or not paying vendors, changes to inventor, selling stock and many other things. Often I see on this board they are making money because they have positive cash flow. This may or may not be true. In Lynas's case it has never been true. If a profitable company makes a major purchase that is capitalized they will have a major decrease in cash but still be profitable.

What it is, is the P&L statement in the semi Annual and Annual Report. The p& L includes changes in all the above not just the bank balance, which is what the cash statement is. In the H1 Report. there is a summery of P&L on page 1 showing a 12 M loss. This is misleading and why I hate summaries. As long as they do not lie they can include or exclude anything they want in a summery. On page 10 is the true P&L which shows a loss of $67M or $ 0.0037 loss per share. This also has notes to further explain items. It tells you about one time items like loan forgiveness + $22M and exchange losses -$54M so you have a better picture of when they might be profitable.

Profits can be manipulated as well, it is harder. It is hard to mislead someone that looks at Cash, P&L and Balance sheet, as a whole and not individual reports. When there is a difference between cash flow and earnings the balance sheet will always show what caused it. Some times it is necessary to compare the past balance sheet to the current one. Most companies show old and new, like Lynas does, and that is very helpful.

Do not think that I do not think cash is not important, it is very important. Especially in Lynas case where conservation of cash influences many things they do. This company has been operating for 4 years. Everyone wants major buyers to start buying. The number one thing that institutions look for is a solid PE. The "E" (earnings) is defined by the P&L not cash.