ords research note

Following on from yesterday's less than objective responses in the JP Morgan thread there are brokers out there that see there being significant balance sheet strain just as Fluffy put forward. He and others are not being mischievious and should be afforded some respect for providing "hard facts rather than speculation".

To summarise Ords note of 10/1/14:

Rare earth prices continue to fall and with LYN yet to reach full phase 1 capacity (let alone provide evidence of achieving operating cost targets). As such there remains a risk additional funding will be required to meet the company’s debt obligations. Nonetheless, there are reasons for some optimism with recent reports indicating that L:YC is looking to extract a premium price for certain product sales, and China continues to consolidate supply.

They cut their recommendation to Hold.

Critically at spot ords estimate LYC achieved basket price is now about US$19/kg, which is below the estimated phase 1 costs of US$19-$20/kg.

Before you dismiss, brokers as "non-experts", you should acknowledge to some extent that these analysts have a relevant background and do not present as ignorant for providing differing views to yours. Indeed, they work within the required framework they requires some intellectual rigor.