Ann: Update on Growth Plans, page-23

With respect to the finance JARS can make this happen. To my mind the key measure preventing Lynas from just 'doing it' is the limit of $25m CapEx in the senior debt facility.

This limit applies to each six month period. So Lynas has expanded Kuantan recently (Lynas NEXT), but kept within the $25m per six month period.

If the C&L plant was to be built over say nine months then Lynas could arrange that to span 3 periods and $75m could be spent this way. But I think the plant will be more than this so it will require a renegotiation of terms with JARS.

Let's also remember that the facility expires in 2020 (think June but could be December? Not sure). So it needs renegotiation anyway. With the NdPr prices where they are and Malaysia curtailing production Lynas will be touch and go to repay it by then in full. Certainly they cannot afford to pay off the debt AND build a C&L plant for $100-200m. In the next year or two.

As for funding, I reckon Lynas can do it out of cash flow. They have about $50m in the bank as at 31/12/18. They should be running $50m cash flow positive each six months, possibly more. I'd want to see the March Q production with NEXT nearly fully running now to work it out now thoroughly.

If JARS want to extend the facility by three years and lift the restriction on CapEx and possibly kick in $50m then that sees Lynas over the line.

Doesn't need much really, just a little love!