Construction of Phase 1 of the LAMP was completed during the quarter and further progress was made on various pre-commissioning activities. Overall commissioning progress was 64% complete as at the end of the quarter. The Company’s operational preparedness program, Ready For Start Up (RFSU), is 97% complete and the balance of pending projects are not critical for plant start-up.........
Lynas is proposing to issue defamation proceedings against an online news portal known as Malaysia Chronicle unless a satisfactory apology is received. .............
Construction In Malaysia, construction of Phase 1 of the LAMP was completed during the quarter. Advanced completion of the pre-commissioning test packs (99% complete) has enabled 77 out of 85 systems to be handed over for commissioning. Site construction workforce at the end of June stood at 289 completing miscellaneous site works and providing support for commissioning activities.
WESTERN AUSTRALIA OPERATIONS In May 2012, the Company appointed Kam Leung as General Manager, Western Australia reporting to Eric Noyrez, President and Chief Operating Officer. Kam joins Lynas from Iluka Resources after holding a number of positions in broad operational areas at companies including Mt Isa Mines and BHP Billiton. Kam holds a Bachelor Engineering (Chemical) and a PhD (Metallurgical Engineering) from the University of Queensland.
Due to sufficient stockpiles of concentrate being produced ahead of the start-up of the LAMP, management elected to bring forward a period of routine maintenance on the Mount Weld Concentration Plant in Western Australia. At the end of the quarter, more than 13,000 dry tonnes of concentrate containing more than 4,800 tonnes of REO were bagged ready for export. Since it was commissioned in May 2011, the Concentration Plant has been performing ahead of management’s expectations with REO grades in line with, and REO recoveries ahead of targets. The downtime has also been used for identifying areas of continuous improvements as well as preparing the Phase 2 mobilisation on site. Management expects to realise operating cost savings from the temporary shutdown of the Plant. The re-start of the Plant will be synchronised in accordance with the requirements of the LAMP.
Malaysia Operations
Lynas submitted its plans to satisfy these conditions in late June.
21 public briefings involving more than 740 people were held during the quarter. Briefings involved university faculty staff and students, members of the Malaysian Academy of Science, government officers and concerned citizens. Lynas has engaged in a large public consultation program, communicating directly with more than 12,000 local residents, community leaders, villagers and their families since July 2011. We are now engaging in a conversation with the Malaysian community that will continue for the life of the plant.
The company’s operational preparedness program, Ready For Start Up (RFSU), was more than 97% complete at the end of the quarter. The balance of pending projects are not critical for plant start-up. Overall commissioning progress was 64% complete as at the end of June.
Cash Position
Total cash at the end of June of $205.4m was represented by unrestricted cash of $124.3m plus restricted cash of $81.1m which is available only to fund capital expenditure associated with the Phase 2 expansion of the Concentration Plant at Mt Weld and the LAMP. Interest income received in the quarter from unrestricted and restricted cash balances totalled $1.3m.
FOREX The currency composition of unrestricted cash was A$36.2m, US$69.6m and MYR63.9m, while the currency composition of the restricted cash was A$26.9m, US$54.9m and MYR0.5m. This quarter the Australian dollar depreciated by 2.2% against the US$ and appreciated by 2.0% against the Ringgit resulting in a $7.0m exchange rate adjustment for the quarter.
LYC Price at posting:
74.5¢ Sentiment: None Disclosure: Held
(20min delay)