0.60c party next year, page-12

anelka,
REE demand dropped in 2008 during the GFC. At that time, China did not have tight quotas so the prices fell.

Now lets ignore the increase in hybrid sales, the rise of the portable electronics industry, and the implementation of the REE magnet wind turbines and go back to 2008 demand (an impossible scenario). And then if we take the 2011 China quota, we STILL get a supply and demand imbalance and thus decent prices.

So if Lynas stays on track with their production targets (now only three months away) they will be the only modern cash flow positive rare earth producer outside China. They will have earnings and will be ramping up first to 11,000tpa and then to 22,000tpa with established working technology.

Attaching any PE to that figure puts you over $3. And attaching any reasonable book value to the richest rare earth deposit in the world that is expanding with new drills, stockpiles with years of production, and is now already being concentrated puts Lynas over the current stock price. In fact, if all were lost in Malaysia (where things seem good but slow to me) and Lynas sold the concentrate to China, the company value is still higher than the current share price.

Traders do some really irrational stuff at bottoms. It makes me wonder how they make money. But Lynas is currently the exact type of victim of trading stupidity that creates the opportunities the great investors find in recessions. Most here survived 2008 as investors because we bought stocks back in March 2009 or thereabouts. This should not be missed. Every scenario and all of the fundamentals support that IMO. Good luck to all.