you expect that the sp will continue to drop, page-6

why should lyc sp rise? i can see no reason for it unless there is a chance in sight to write some profits from operation. this requires full production. after all this fuzz about testing under close surveillance along with the unsolved question of exporting all residue/waste..xcuse me "co-product" i don't believe a sound ramp up can be possible before elections in malaysia. things are heating up over there with lynas right in the middle of corruption, fears and social issues. has anyone followed the polls? that's worth a look. i'd say the sovereign risk isn't even priced in already.
assuming ramp up with volumes to phase 1 capacity happens in the third quarter of 2013 it will still take a while until results can be seen on paper. in order to estimate this time frame we should take a look at molycorp. 3 quarters and counting. for lynas this would translate to first possible positive results in q2 2014.
until then there are two other aspects that seriously question lynas long term profitability. first they are clearly producing into an oversupplied market. 2012 was a disaster for the whole industry because demand was suddenly falling rapidly. toyota, the trend-setter in automobile development, announced having developed a method of producing hybrid and e-cars without the use of ree.
secondly we have no idea of how high the total costs of production will be. all we really know about the costs is the ridiculous level of overhead remunerations. big chunks of costs remain in reagents, energy, transportation and a new position in calculation which is "waste-management" and other environmental issues like monitoring, pr etc.
an outlook like the above implies at least one further round of financing will have to take place, maybe more, depending on the mid-term development of rare earth prices. finally there is mt kellett. they want to "discuss adjustments" regarding their convertible bonds. we shall soon find out what this means.