With the recent news of Gina buying a significant stake in LYC...

With the recent news of Gina buying a significant stake in LYC (adding to her significant stakes in ARU, BRE and NYSE:MP), it got me thinking about some other recent news from LYC.

Lynas are building two co-located refineries in Texas, USA - a light and a heavy rare earths refinery. What makes this interesting is that Lynas don't make any HREO from Mt Weld - they don't even report the amount of DyTb they produce and just note a mixed heavy product as a small by-product stream. So where are they going to get feed from for their HREO separation facility that is under construction?

IMO, they have two options:

1. Binding offtake from a rare earth miner making MREC that is high in HREO. The first one that comes to mind is NTU Browns Range, but ILU have already locked this one up with a strategic partnership back in 2022 for feed to ILU's Eneabba refinery. The next option are the Brazilian Ionic plays, of which VMM has already tied up a JV with IXR to refine their MREC in house. That just leaves MEI and much smaller players like ENV, ALV.

2. Acquisition of a rare earth developer with a substantial proportion of HREO in their mix. There isn't much point acquiring a developer with a lot of NdPr because Lynas already produce a huge amount of NdPr and are ramping up to make more - they need DyTb and the other HREO to complement Mt Weld.

Lynas have already hinted at this twice now:
a f r .com/companies/mining/lynas-seeking-new-mines-leaving-nothing-to-waste-20230808-p5duwt
a f r .com/companies/mining/lynas-not-standing-still-after-mega-merger-stalls-20240226-p5f7q2

Their options are slim at this point in time with MEI looking to be the only suitable project that is both economic at moderate NdPr prices and with decent HREO without offtakes tied up already. MEI is a large target to swallow though at $500m market cap and a premium required to get it over the line if it does happen. TSX:ARA Carina project also looks interesting but economics from their SS are challenging at sub US$100/kg NdPr.

But there is another.. A significant advantage of Sybella is the rare earth mix, with a suprisingly high proportion of leachable DyTb. From their Phase 1 met work:


Sybella has a leachable DyTb of 15 g/t feed ore, compared to MEI Caldeira average of only 11 g/t.

So if LYC are looking for an economic supply of DyTb to feed their Texas HREO refinery in the back half of this decade, we could be on the menu. We are looking like the half price lunch special at this share price..