paterson's latest lyc report

States much of what was in their previous report, here's the highlights;

? Lynas Advanced Materials Plant (LAMP): Phase1 is complete and producing.
It is ramping up to design capacity of 11ktpa of REO products. First deliveries to
clients are anticipated late February/early March. Revenues next quarter with,
shipping times, customer qualification, and invoice terms pushing the first
paycheck to after the end of March.

? Phase2 is more than 90% complete and will be ramped up in parallel but behind
Phase1 during 2013. The remaining capex to complete everything is $37m.
There is no more capex after this. The plant is all completed in this fiscal year
ending June-13 and it is likely that by the end of this year LYC will be producing
at the full nameplate rate of 22ktpa.

? The Company has been testing both the Mt Weld plant and the LAMP with
consistent feedstock and with high/low grades in order to find the tolerances.

? The Company will be holding an analyst site visit at the LAMP on 19 March.

? Other Matters: The government recently approved another project, at Bukit
Merah, whose operation has much higher radiation than the LAMP.

? The total quota of REO exports from China (the world’s largest producer) for
CY13 is expected to be only 31kt, which makes LYC a very important supplier
outside China.

? At the current market cap, investors are paying for the build cost of
the plants at Mt Weld and Kuantan and almost getting for free one of
the world’s largest and richest rare earth deposits. Further, there is
little value being factored in for the future earnings that are
imminent. LYC is trading at 5x and 2x PE on FY14 and FY15 earnings.
It is trading at 1x EV/EBITDA on FY15. Accordingly, we retain a Buy
recommendation with a price target or $2.08/share.