Perhaps I didn't state myself well enough. The valuation is for the resource, particularly if a buyout was to be entertained. I would think that shareholders would want the resources at Mt Weld to be calculated at a price indicative of its value.
The mine is the largest asset owned by the shareholders yet it is not included in the financials except for the following:
Consolidated Statement of Financial Position, under Property, plant and equipment is shown a figure of $658,353 (A$ ‘000). Note 21 is assigned to the line. Note 21, Property, Plant & Equipment , under Leasehold Land is Cost 58,243 which is $58,243,000, the carried value of the mine, I assume. Accumulated depreciation of 3,834 brings the Carrying cost to 54,409 (A$ ‘000) or $54,409,000. There are 2.549 Billion kilograms of REO at Mt Weld. That would indicate that Lynas is carrying the value of its rare earth asset at $0.0213 per kilogram! This does not show the true value of a kilogram of rare earth oxide as if it did it would mean Lynas was making a huge profit, which it isn’t, or the manufacturing process was extremely expensive seeing the raw material is so low, or that the value is being carried too low.
Does anyone really know what the true value of a kilogram of REO is worth as it comes out of the mine? It’s important to know to be certain the true and fair value of Lynas is known. For certain the current share price does not reflect Lynas’s true value.
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