Deciphering Lynas, page-796

Mainly because their business model is almost a complete duplication of Molycorp, and they went out of business because the raw material is too low in grade to offset the lower RE prices. Not to mention they dont have a wider basket of mined minerals for other applicants other than marget production. And their yield of what they produce is substantially lower than other source mines, like our Mt Weld.

If RE prices remain low, as demand stays low, MP will continue to show losses, and will have to reach into the debt markets to remain a going concern.

At the current cost of money (interest rates), MP will have a near impossible task of servicing its new debt while losing money. And it will continue to lose money! Its entire existence is based on higher RE prices, and not even their Chinese owners anticipated a flattening of RE prices when MP was organized. In fact, the venture was based on taking over Molycorp assets, with the expectation that higher RE prices were baked into future sales. Their business model was based on the future need for huge amounts of RE. Suppressed RE pricing may well remain for the next 12-36 months. With their Chinese owners selling much of their processed oxides in China, there is no appetite for paying premium prices to MP (which they had been consistently doing) before the Chinese economy went to hell in a hat basket. With Chinese demand for EV cars so low, even the Europeans (EU) are pushing back on Chinese made EV sales with the anticipation that Chinese dumping is just around the corner in European markets, stalling their own car producers from claiming a home market advantage.

MP has a P/E of almost 30, and a market cap of 2.9 billion. How long in a down marketplace do you think 30x will hold? If MP delivers a P/E similar to LYC, then the value of Mountain Pass as their primary asset and the backbone of the company is worth 1.7 billion. LYC will glide down another 5%+, so lets call it 1.3 Billion. If I wanted US RE autonomy from China, I'd be working behind the scenes on financing LYC to buy MP, and use their raw materials along with Kalgoorie concentrate to feed the LYC Texas plant. Exactly what they planned for the LAMP before the extention. That provides the US with production and at reduced radioactive levels.

MP is a victim of its own business model. Just like iron mining. The cost of the mining equals the cost of the commercial metal.

MP is a mining stock, fully dependent on the commercial price of what it mines.

In the last quarter, we produced 1900 MT of NdPr. MP did 50 MT. Hoping to get to 75 MT in "next few years". By that time, we will be at 4000 MT a quarter, and MP will be hoping for 75 MT. Sorry, you have not convinced me. But, I enjoyed the digital conversation.

GLTA