Ann: Partial Repayment of JARE Facility, page-9

Lynas owes $150 Million dollars to JARE due 30 June 2020. If Lynas pays the debt down quarterly the payment due each quarter will be $18.75 Million dollars. In addition, if paid at $18.75 Million per quarter, interest of $6.33 Million dollars will also have to be paid.

While the prepayment was fine to see, Lynas is faced with needing to set aside $19.54 Million each quarter, whether it pays the principal before 30 June 2020 or not. What is being hailed as newsworthy is in fact what MUST HAPPEN each quarter to satisfy the JARE in a timely manner. If Lynas fails in this, the only option remaining will be to have a mass dilution of the stock again which is counter-productive to shareholders. The unfortunate thing about not having paid down the principal is that going forward Lynas must retain a high amount of cash on the books if it does not make payments on the debt. Having $150 Million in cash plus whatever cash Lynas holds for operations and expenses at the time will make Lynas a takeover target going into 2020, especially when the company is valued at just over $600 Million on the books.

I am pleased to see the repayment of the principal but it is what should be expected rather than be considered exceptional if concerned about Lynas' future financial health.