I think your reply is to another of my posts not this one. But I...

I think your reply is to another of my posts not this one. But I understand what you are saying I just am pointing it out For others.

Most of what you say is correct. First assumption I disagree with but have no proof to say you are wrong is price will average $60 for 20 years adjusted for inflation. You may be high you may be low but do we know. I do not think so.

Next is in the ground ore value. The simplistic but I feel accurate way to evaluate it is What it can be sold for minus all expenses of from taking it out of ground to selling it. All expenses include operations G&A, R&D, Interest, depreciation, Taxes, Good will, and everything I forgot. So far through H1 17 this has been a negative number which means no value for what is in the ground right now and that is why Lynas does not and cannot carry it as an asset.


I believe H2 will be negative as well but lest not argue we will know in a week or two and if I am wrong I will admit it clearly.

Several other things lead me to believe that we do not yet understand the true operating cost.

First all the ore up till a few months ago was mined in 2008. All cost with that campaign have been fully depreciated. So we are not seeing any of the expense of mining in in FY '17. Q1 '18 should show this allot better. Much of the ore , not all they are still mixing, will be from recent campaign.

Even this recent campaign was low cost as AL clearly told us and does not reflect cost per ton of REE of a major campaign.


Next the ore from the 2008 campaign was 24% REE. The ore from the resent campaign was over 17% REE. The MT Weld CDL deposit has an average of 9.7% REE. At some point Lynas will be mining ORE below 9.7% REE because average is 9.7%. Lower grade ore means you have to handle more dirt to have the same amount of product. This will increase mining costs and concentration allot. I think it will have a small impact on C&L but hard to know until we see what % REE comes out of concentration. After C&L no impact.

I am sure the next campaign will be between 9.7% and 17%, possibly higher, it only makes sense to go after best first. Each campaign will be lower grade than before. There is more high grade ore below the last campaign but they went down to the water table. Right now it appears it is not worth pumping out water to get to this, that may change as the easy stuff up top becomes lower grade.

Every day as prices rise your P&L estimates for FY18 look to be better than mine. I suspect unless something big happens I will be raising mine closer to yours but I am still in a holding pattern on that.

If P&L lose is 10M to 20M in H2 (Or 22M to 32 M for year) I will not change till Q1. That's excluding currency loses or gains.