Over budget but on time...

I just finished watching the full year report (video) and I must admit I am amazed at the amount of groaning over a few million dollar overrun when Amanda is building Emerald city. In summarizing the year in one word Amanda chose the word “productive” and that is pretty accurate considering all of the new development…

Let’s put things into perspective. The entire projected cost of Kal is around AUD$730M which equates to USD$475M. The US very recently reiterated their support and increased the grant (read free money) for the US separation facility in Texas to USD$258M. Why do the analysts seeming ignore the grant and the significance of this award while blindly requesting a detailed explanation on what amount to be accounting issues…

I recite these numbers because it seems many are overlooking the significance of the US infusion of grant money. I heard little complaining from the Ted Cruz consortium and I think it is pretty clear that Amanda is playing the cards like she has them. I’m not sure of the status of MP but they also have apparently been silent…

Knowledge runs deep on this board and those of us who have followed Lynas for some time understand that it takes “heavy lifting” to bring a RE project to fruition. Amanda has clearly outlined and reported both progress and challenges on a timely basis, to the best of her ability. The bottom line and good news is that this project would be over budget but on-time…

My question is this; Who cares if we are a few million over budget? This is a huge project and it is progressing well. While there are unanticipated challenges such as getting natural gas to flow through the pipeline or water dam issues, there are also material, human resource concerns. The “gamble” at Kalgoorlie will prove to be an exceptionally good decision as all of the processed rare-earth must go through the process of C&L (Cracking and Leaching). C&L may not be a radical new technology but it is a proven technology at scale…

At the end of the day, I also think “productive” is a good word to describe the past year as progress continues in many areas. To the untrained eye, the Lynas share price appears to be stagnant waiting for the price of RE’s to go up. In actuality, there are several major projects that will independently coalesce into a functional supply chain, a chain that is very much under Lynas control... JMHO...