First Question is when you say “ 3. EPS = 2.21 cps (AUD” is for the year or is this 4 times Q4? In general I agree but think 0.55C for Q 4 '18 would be high. Need to know Q4 '17 loses to make any type of reasonable estimate right now. Hard to extrapolate not know Q4 numbers. We know an expensive Mining campaign is starting in the next two Qs. I have no idea the quality of the ore. Will it match the current 17% REE since the average of Mt Weld CLD is 10%? If total REE or %NdPr in REE go down costs go up. Also the company has been running very lean. Some items will be backfilled as profits appear further raising expenses. How much all this raises expense is debatable but I will agree profits will be high enough to support a higher SP. Just think you are high. I do not see JARE debt as much of a negative to the SP All companies have debt and Jare alone is less debt than I would expect for a company this size. I think many of the bond holders want their money, not Lynas stock. Finding enough buyers for this stock is a real concern for me. No US fund or institution can buy this stock with its current ratings. There are US SEC rules but most corporations put much tighter restrictions on their funds than those of the SEC. Reason is simple even if everyone is convinced it is a winner there is always risk. Even if problem is not Lynas’s, like a sector or market recession, and or REE price collapse. Losing money on something like Lynas if it did happen would bring out the lawyers by the hundreds. Institutions and funds do not want to defend against this. So easy in hind sight to explain to a jury why this should never been bought.
Not sure what you mean by a "another 2 trains " I believe a train is a sub-unit of a production step like SX7. Until the ore is less than 10% REE there is plenty of Concentration and C&L capacity to increase NDPR, without spending money in those spaces. To Increase ND PR without increasing La and Ce would only Require an expansion of SX1 and SX3 line. Possibly SX5 I have never seen any numbers of how much NdPr comes from SX1 vs SX5. Currently they are not finishing over 2,000KT of Ce and La a Q. I think this is because of price not capacity. More NdPr means more La and Ce not finished. Expanded Ce and La makes no sense. Since May 1 ‘17 LA is down 5 % to $1.80, Ce 20% to $1.75. Not a market to expand into. Mt Weld’ NdPr content is very high at 23% of REE. If China whose NdPr content is much lower increases NdPR as well, the market for La and CE will be saturated even worse.
As far as expanded NdPr. RIGHT NOW it appears to be a hands down winner, Depending on what figures you use it is currently 75% to 85 % of Lynas revenue. It is a product whose price China controls. Is this the correct product to expand, long term? The other two areas that could be expanded are full separation of SEG into Oxides. This would increase the value of SEG substantially but it is small volume as a whole, 5%, but 22% of NdPr by weight so it may be worth doing. Fully separated it should be several times more revenue than La and CE combined. The last is to fully separate Nd and Pr. Nd is 78% and PR is 22% of Lynas NdPr. This is an average measurement for Mount Weld, it varies. Unfortunately using today’s prices this results in the same ASP as unseparated NdPr. So other than flexibility in the market not sure it offers much. (When I started calculating I was sure it would net more $, two years ago it did, oh well) ND = $46 /Kg, PR = $59/ Kg, NdPr $50/ KG.
NdPr and SEG separation does not need any increase to Mining, Concentration, C&L or any SX line. Just take what you have and process further. No idea of capital or recurring cost but I am sure AL and team know. Many small mines have unseparated SEG. Maybe Lynas could buy SEG from others to have bigger CREE and HREE numbers.
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