Hello. I thought I'd leave you with the gift of labours for the last few hours. I went through the LYC FY23 and 1H24 financial reports, as well as the Quarterly Reports. My calculations on my spreadsheet matched very closely to the LYC numbers therefore I gained the following impressions from LYC that cannot be applied to LIN:
1. LYC appears to have some variable control over what it produces & sells. For example, in the FY23 financial report, 36.6% of the annual production was NdPr, which is higher than the Mount Weld % of NdPr of 23.29%. 1H24 raised this NdPr production % to 46.9%.
2. Therefore, while on paper the current spot Mount Weld basket price is around US$13.03/kg; as LYC showed in their last (March) Quarterly Report, they received an average sale price of AUD$43.81/kg or US$28.91/kg.
3. LYC has a term "Base 100" in their Quarterly Reports, which I do not know what it means. However, based on the remarkable matching correlations in my spreadsheet, I sense Base 100 refers to what % of the spot price LYC is receiving. In other words, my impression is LYC mostly received below the spot price for its products (although naturally my impressions may be wrong here).
4. Therefore, when it comes to the rough low cost concentrates LIN are proposing:
(a) LIN appear unable to control their basket price. It appears they must obtain the market price for their concentrates, which must include Lanthanum, Cerium and other low revenue earners. In other words, the current Kangankunde spot basket price appears to be around US$9.82/kg before discounting; lets say US$5.90/kg at 60% payability.
(b) LIN may not even receive the spot price because my impression is LYC generally receive below the spot price.
5. Naturally, you can discuss my impressions with LIN & LYC, because my impressions may be incorrect.
6. In summary, LYC can control their production, discard what is not need or store as inventory what is currently receiving a poor price. As the last LYC quarterly report said: "During the quarter, rare earth prices remained at a low point. In light of this, we opted to hold all inventory of SEG, as well as approximately 500 tonnes of NdPr." LIN cannot hold their SEG but sell their NdPr because my impression is LIN may only sell an unseparated TREO concentrate.
7. In summary, in 1H24 when their Mt Weld basket price appeared around US$18/kg, LYC appeared produce for US$15.50/kg (all costs) and sell for US$23.42/kg. LYC sold 6,617,000 kg.
Expand
(20min delay)