@cafe: Not sure what sort of business you are in, but most would...

@cafe: Not sure what sort of business you are in, but most would walk a mile from this sort of risk.

Might be closer to this sort of thing than you guess.


Look, IMO, Lynas is stuffed. I wish it wasn't and I hope ultimately I am proven wrong. But essentially the writing has been on the wall since admissions about adverse material processing characteristics along with the proposal to partially mothball stage 2. So those clues, amongst millions of others, following on from the bust cycle of REEs, have provided a happy playground for the shorters.

The problem here is that Lynas went from a mining/exploration company to a pioneering chemical company on foreign and rather unfriendly soil. That is the huge risk that deserved the mile long walk. IMO, the mine itself is much less of a risk. It just needed an appropriate JV with either a Glencore or Siemens type for the off-take of concentrate. Obviously due to the unproven aspects of the costs to deliver product, then sure, there is much more risk than a base metals project. And I don't downplay that risk, but it could have been somewhat mitigated with fixed or hedged pricing with the off-take partner.

When I say it's worth $100m (with a blind-fold on and dart in hand), I at least mentally touch on other weathered carbonatite REE deposits for peer valuation. So immediately to mind, I have Ngualla in Tanzania at half the grade (possibly better metallurgy), completely undeveloped, with no takeover premium - currently sitting at about $30m. We also have Zandkopsdrift in S.A., a less attractive deposit again, that the Koreans threw plenty of cash at (don't recall exactly - tens of millions) for a minority stake (admittedly during the REE peak).

Perhaps those people thinking I'm nuts for suggesting that Mt Weld is worth $100m have gone from being rocket launchers to pissed-off-party-poopers. I don't know. But even from a shorter's perspective, I at least perceive value in the deposit. Many of the worlds' largest mines are at times un-viable due to a host of possible macro and micro reasons (examples abound). But that doesn't mean the IGV of the resource and infrastructure become worthless during those periods. Even with Lynas-centric myopia, surely people can anticipate some potential future for the best ROW LREE deposit, permitted and developed in WA? As for the future of the LAMP, or LYC that's another matter.

We'll see, if someone gets Mt Weld and all of LYC's tenements for less than $100m (which is not a lot in the scheme of things), then I for one, will be thinking they got a good deal.