One last clarification when I said negative cash flow I mean before they raise any new cash, Regardless if from loans, gifts, stock sales or leasing of facilities. or any thing I have not thought of. The drain on cash & profits comes from several places. the first we already know about clearly by information released by Lynas. It is PDF that hits Cash and profits because it can not be CAP EX. The second is Malaysia C&L depreciations. Not saying this cannot change but here is a chart as announced. Q3 already has had an increase in PDF payments but we do not know how it will effect H2. so I will leave it unchanged from announcement. Look at total for 2021 it is AUD 70M that is 35% more then they have ever made in a year.
| AUD Millions. |
| PDF | C&L | total |
| H1 2020 | | 6 | 6 |
| H2 2020 | 15 | 9 | 24 |
| Total 2020 | 15 | 15 | 30 |
| H1 2021 | | 9 | 9 |
| H2 2021 | 52 | 9 | 61 |
| total 2021 | 52 | 18 | 70 |
| H1 2022 | | 9 | 9 |
| H2 2022 | 52 | 9 | 61 |
| Total 2022 | 52 | 18 | 70 |
The next thing that effects only cash because it will all be CAP EX. Is deposits on major equipment deposits for 2025. And Labor expenses for 2025 plan. AL has told us clearly these are coming. Appropatly she has been vague about when and how much. So it is not clear what hits 2020. It is clear it will be a major hit by December 2020 which is why I say AR and SAR combined.
Last thing. AL has told us where they make money. NdPR has to be in Mid USD 30s no vat. La and CE have fallen as well so this lifts price that they have to get for NdPr. I will be first to admit not very much but it is the wrong direction. They publish Nd Pr prices in every Q report because they are important though some people claim now with low prices not that much but one in particular loves to post every time they go up. We are below that number right now and Prices are falling again. If this is just a bounce or a trend is to early to call. There will be big operational loses in H2 2020. Low REO prices low production volume, due to shut downs, It is pretty safe to say this trend will continue well into 2021 ( September 2020 or longer) impacting H1 severely even if prices recover in next 30 days which I do not see happening but they could. Recover means at least USD 40 No Vat for NdPr. Today price is USD 32.78 no vat. Does any body expect the WW economy to recover enough by September to lift NdPr to even USD 39.00? SO compared to this the BL money is just not that significant. Yet many holders love to concentrate on it because they have no answer for what is a much bigger problem. JMO.
Many like to insult me severly for these ideas. I take great satisfaction that even with the overwhelming majority insulting not one person has refuted my facts or proposed a different scenario for the periode thru June 2021. Fundamentals will become more important as just how big cash and profits are. We saw this when they announced the 3 year license and the stock began to rise sharply. Then Next day a 80% decline in H1 profits YOY and it started a decent ot just over a $. Yes the virus added to it. but the day of licence 27 Feb. the SP was 1.995 next day with H1 results it closed at 1.845 Two week later March 15 th it closed at 1.08. Can any one explain why will not see something similar when Q4 and AR come out. Yes the virus had an impact but this was only 16 days. Yes we will have positive news about Virus in July and August when these reports come out. Do you think this news on virus will be more powerful than the negative results from Lynas. For me only if news on virus lifts Nd, Pr prices allot.
(20min delay)