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Gold/Mining/Energy : Rare Earth Elements and Exotic Metals -- Ignore unavailable to you. Want to Upgrade?

To: Anchan who wrote (91)	2/16/2007 1:26:33 AM
From: Anchan	Respond to of 24726

Sorry, Lynas Corp is LYC.AX (not LYS.AX). EOM

To: Anchan who wrote (91)	2/16/2007 2:25:31 AM
From: Anchan	Read Replies (1) \| Respond to of 24726

Brutally condensing Lynas Co (LYC.AX) investor presentation into a few lines: [excerpted quotes] "Australian assets: * Mount Weld Rare Earths resource in Western Australia * Mount Weld Polymetallic resource including Nb, Ta, Ti, Zr, & Rare Earths * Listed on the Australian Stock Exchange (LYC) * Shares on issue 397,290,506 Rare Earths are vital for three important developments in our society: 1) Reduction in car exhaust • Catalytic converter • Hybrid vehicles 2) Enabling miniaturisation • Rare Earth magnets • Flat panel displays 3) Energy efficient products • Compact fluorescent lights • NiMH batteries * Supply - demand imbalance suggest the price increases will continue over the next few years. Demand is growing over 10% p.a. from both existing and new applications. * A conservative forecast for hybrid vehicle sales by 2010 is 2M vehicles worldwide. With 12kg of Rare Earths used in the NiMH battery and 1.5kg in electric motors per vehicle additional demand would be ~27,000 tonnes of Rare Earths. * Whilst Rare Earths are relatively abundant in the earth’s crust, they are rarely present in economic concentrations. * They are never found as free metals but as a ‘cocktail’ of the Rare Earths elements, which need separating for commercial use. * China currently supplies over 95% of the global Rare Earths market. * Lynas Corporation owns the only commercially viable deposit outside of China, at Mt Weld in Western Australia. * Supply is undergoing a structural change due to environmental and regulatory issues: * China continues to dominate the world’s supply of Rare Earths (~95%). * Chinese Government announced a mining production quota of 76,000 tpa. * Chinese Government enforcing their environmental regulations causing many Rare Earths plants to shut down. * Chinese production will at best remain at 85,000-90,000 tpa. * Chinese Government apply export quotas to limit supply outside China as well as 10% export duty. * The speciality Rare Earths are lagging Nickel and Zinc price movements. * (Lynas Corp's) Mt Weld is the richest grade Rare Earths resource in the world. * Recoverable value of Mt Weld Rare Earths is A$5.4B (based on Rare Earths Oxide price of US$8,090/t, AUD/USD = 0.75). * Mt Weld mining contract to be let by April with ground breaking in May. * Rare Earth oxides (above 14% head grade) to be separated at strategic partner's plant in Malaysia. * Commissioning of the plant in Malaysia is planned for H2 2008. * Ramp-up to 10,500t REO, including wet commissioning, is expected to take 12 months, ultimately continued expansion to 20,000t by 2010. Summarizing: * A perfect storm has hit the Rare Earths market, with demand growing strongly and supply restrictions in place. -- Lynas has the only commercially viable deposit outside China, and will be one of the lowest cost producers in the world. -- The plant in Malaysia brings significant tax advantages, a 10 year tax free period and a 17% revenue advantage compared to China which must absorb 17% VAT. [END EXCERPTS] * Lynas has A$66m cash; they will need another A$30-40m to build and initially run the plant. * Also, they have another deposit ("Crown polymetallic resource") nearby, for which a scoping study has been completed, with a positive project value. Further work on this to commence this year; over A$50 bln metal content. Next project?