Ann: Malaysian Regulatory Update, page-108

I was asked by another shareholder whether or not I am still invested in Lynas and my response is still the same. Lynas is a long term investment and nothing in the basic story has changed...

Anyway I'm not some much invested in Lynas as a company so much as I am invested in the Lynas board and in particular the management team. It is very clear to me that Amanda is playing hardball and quite frankly seems to be a bit miffed with the way Lynas is being treated. Amanda has been hinting about doing what is best for the company and that includes considering all options. Obviously a facility in a politically stable country is one of those options...

How to pay for such a facility? An example of a "soft" exit from Malaysia would allow Lynas to operate 10 years without harassment from the Malaysian government. At the ten year mark Lynas will agree to complete an total exit from Malaysia and perform a complete site restoration. There are already bonds in place to ensure a that a complete restoration takes place...

For Malaysia's part, during the 10 year period Lynas will be permitted to pursue planned and approved efficiencies and capacity increases. Also, in concession, Lynas would agree to pay for income taxes going forward. The profits from LAMP could then be used to build a new facility at a new location (sorry folks, dividends are a couple more years out)...

The reality is that Kam would have the project of his dreams creating a facility from the ground up. I say from the ground up but in reality much of the work is already performed. For example, Lynas has a network of computer and related devices to maintain the lab related functions to ensure product quality.  The creation of LAMP required innovative equipment, as a result much of the hardware and software developed on-site by Lynas engineers would be readily available for expansion...

Lynas is not only the leader in the RE space, there is little in the rear view mirror to compete. Lynas is a dynamic company in a nascent technology that will be a very attractive acquisition for many developed nations. I'm certain the US would welcome a Lynas RE processing facility and given the current world situation, significant incentives might be offered... My point is that Malaysian may find that while they are "inconveniencing" Lynas, Lynas is probably actively researching and discovering new options...

Will the future be in Kuantan? I'm beginning to think that Malaysia is fast approaching a tipping point where Lynas whips out the middle finger and moves on to build the RE processing facility of Kam's dreams in a politically stable country. LAMP is great but IMO it is only a prototype for things to come...

At the end of the day six weeks of uncertainty may be devastating to Malaysia, Lynas just might find a better deal and Malaysia will be left with egg on it's face. At some point Malaysia may realize the potential of Lynas but it may just be too late. Obviously the international community will take note of Malaysia's treatment of Lynas but once plans are in place it will all be for naught...

Quite possibly, ten years from now the LAMP and Malaysia will be a cold and fuzzy memory... JMHO...