Another Q of production falling short of the mark. In early May, LYC stated that output in April was 709t and that “management is confident of achieving the targeted production run rate of11ktpa REO on a sustainable basis during the June Q” and that “cashflow neutral is likely to be reached at the 750t/mth rate”.
Production for the remaining months of May and June averaged less (587t/mth) than April. This result, combined with an average selling price c10% lower than the average basket price (US$18.25 vs US$20.35/kg), suggests there are still operational issues with the LAMP.
There was a brief statement in the report that “significant progress was made” on the potential restructure of its existing financing facilities with further due diligence and documentation required
We are disappointed but not entirely surprised that LYC has failed to achieve its stated production goals for the Q.
LYC stock has risen strongly over the past week or so and we fail to identify any justification for such an improvement in the June Q report.
Accordingly, we downgrade our recommendation to SELL.
Specy, I thought you had sold out? Your post is Buy/held. Are you back buying yesterday at 17c?
LYC Price at posting:
14.0¢ Sentiment: Sell Disclosure: Not Held
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