After watching Mahathir's "announcement" have to wonder if he is mindful of anything much, beyond auditioning for Albert Steptoe in The Lodger.
Certainly not the fact Moly spent 3yrs trying to get their C&L operational, despite 50yrs prior experience they never produced anything on spec from the new plant, not to mention Lynas' own issues getting C&L fully functional, with considerable input from Malay team members.
WES have simply got a look at Lynas forward planning, gone to Malaysia played Lynas trump card, and scuttled any chance at a negotiated settlement waving a magic wand, told the Malaysians exactly what they wanted to hear.
In the process they have created a totally untenable situation, the only party outside Lynas who should be aware of this are the Japanese, and they should be very concerned at the fantasy in Mahathir's head.
Lynas only option to remain independent now is to present their forward planning in toto, and I hope to hell it is as developed as I suspect, and pray for Japanese funding & pressure on Malaysia for a grace period of at least 24 months to transition both the process route & current WLP situation. Ultimately Mahathir will have to provide that to any new owner, or destroy ROW downstream RE industry, Dragon must be delighted.
"Japan" won't bid for Lynas, they may further fund a workable transition to an expanded supply of greater surety IF it is presented in a credible manner.
The fall back of course is such an outline of Lynas potential would go a long way to focus attention on the forward value LYC, something WES "advisors" UBS are very much aware of with their latest "unrestricted" note forecasting FY21 Revenues $608M, Net $217M, Cash $165M, and FY22 $650m, $255M, $332M, and that is purely off current operations base. Their base case NPV set at $3.08 PDF, discounted 9% to $2.80 in the event of WLP repatriation. These based on 10% DCF & LT NdPr pricing $60kg but regardless strong indication UBS perception of value here.
AL's mantra "under promise & over deliver" which may work nicely in a perfect world, but clearly it ain't. Equally clearly the best shot at maintaining independence is the best shot at extracting maximum value for current equity, AL needs to aggressively SELL the forward planning they have been working on for some time, and I hope to hell it is well developed, to the point of finance & permits, & credible.
And at least an indication, with notice March QR, pre mkt Monday.
Hopefully that will survive moderation.
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