bright future ahead for lyc, page-11

kdav,

It's great to write positive posts but if you expect them to be taken seriously please check your facts. You do nobody any favours by repeatedly posting misinformation here.

The latest JPM research mote on LYC 31.3 (which I get thru Ords) confirmed their Dec 11 $2.71 price target AFTER the Sojitz deal was confirmed.

JPM price target uses a basket price of $60 FY 12 raising to a peak of $67 FY 15.

With a little research you can quickly find the sense in this. Using the MT Weld basket, prices have risen from $10 in 2009 to $160 currently, the bulk of the rise in the past 6 months. This has been mainly driven by supply disruption outside China and not by a massive increase in underlying demand so logically you would expect some retracement once the initial shock passes. For example, end users building some inventory rather than relying on "just in time" from China. However IMO the big kicker will be La & Ce and I think this goes some way to explain Moly's focus on "mines to magnet" (or water purifiers) strategy.

La & Ce make up the bulk of most RE deposits, Mt Weld 75% & Moly 83% and these two have risen from around $4 to $130 in the same timeframe, 09 to current.

Using the 2014 Supply/Demand projections from the LYC March 11 presentation Ce will be 25% OVERSUPPLIED. La shows a 25%/13800t shortfall but LYC doesn't calculate Moly's stage 2 production of approx 7000t so it too should be moving close to balance at this stage.

As this becomes apparent pricing on these two elements, that make up 75%/$120 of the MT Weld basket, will return to a level more in line with their long term average which is under $10.

Let's be generous and say $30 x 75% = $22 + $40 (remaining basket without discounting current prices) and you have a total of $62.

Moly has a bigger problem wth 83% of production in Ce & La so hence their intention to build vertically and add value thru their own manufacture. To me this confirms they've projected this, particularly with LYC getting to market first and tying up supply deals. Wasn't Mike Smith calling a bubble in REE prices last OCTOBER!!

So, all this circles back the the fact that while LYC will still be very profitable with a basket price around $60 and costs around $14 it might be sensible to hold on to a potentially valuable asset like Crown. It certainly makes no sense to give it away for $20m at this point and any long term investor would see it worth the fight.