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  • REE/Strategic Minerals Concentrator, July 26, 2011 [View instapost]
    Lynas published it's quarterly update tonight and it's content is nothing short of excellent… The management discussion is a fantastic read, it discusses all of the issues…

    Bottom line, great report on REAL progress... The pictures are impressive, much can be determined from them... LAMP looks to be close to completion and the technical level will unmatched in the industry...

    While the juniors and even Moly talk about their resources and future PLANS for production, Lynas is there... While it is difficult to put a price on LAMP or Mt.Weld, the bottom line is that it gives this company DEBT FREE shareholder equity that will provide positive cash flow in the near future... NO ONE else is even close to this...

    www.hotcopper.com.au/p...

    OK, the all important analysis of the financial statement... While I am not particularly familiar with the Oz accounting standards, this appears to be fairly straight forward...

    The company spent ~70m during the quarter for development of the project...
    This is forecast to increase to ~107m next quarter... The increase appears to be the increased activity as the project nears fruition... Quite reasonable...

    OK, next the available cash...

    Cash on Hand $31m
    Deposits at Call $167m
    Sojitz Cash $235m

    Total Cash (@ end of quarter) $433,956

    While this looks like a lot of cash, much of this is Sojitz Cash and as far as I can tell will be readily available for the expansion... I'm not familiar with "Deposits at Call" but the term "Deposits" indicates Lynas assets. Even if its not Lynas cash, it will be available for continued operations...

    This gives Lynas near $200m to complete LAMP...

    Almost $100m income (from financing activities) was realized from the sale of options or warrants... Of course this results in some common stock dilution... Total outstanding shares did not appear to increase significantly and is still ~1.7B shares...

    The only other item of note is that Lynas has a short term loan facility in place to be able to borrow $212m... While it looks as though they have already borrowed it, it appears they have not used any as of this time...

    All in all, this is an excellent financial report... While Lynas is not "flush" with cash, they have plenty to continue operations until LAMP is completed... The short term loan facility was something I wondered about and it apparently it is in place for contingencies of any kind...

    OT: Look at these numbers for one quarter, then look at pretty much any of the juniors for the same period... I'll pick on GWM for a second. As I remember the ANNUAL negative cash flow was $12m - $ 15m (as opposed to Lynas's predicted 1 QUARTER negative cash flow of $107m...

    Lynas has available cash North of $400m. GWM has total CASH ON HAND of $25m...

    Developing and commissioning a state of the art facility such as LAMP and Mt. Weld is VERY expensive... When a junior announces production in 2 years, one needs to discuss the financing... Most of the juniors (and Moly to some degree) are not even close... Money makes this a very different game... JMHO...
    Jul 27 09:56 PM | 9 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, January 11, 2012 [View instapost]
    Totally agree T.B., the demand for new REE uses is currently being determined by supply. A lack of a consistent, reliable supply is deterring the commitment of the end users to create new applications for the REE's

    I like to use Erbium as an example. It has characteristics that actually amplify optical waves when used in fiber optic transmission cable use in the Internet backbone. The future use of Er is critical to companies like Finisar, Oclaro JDU and many others.

    Your point that the use of RE's in Semiconductor's is spot on. I have read several white papers discussing this very issue and included a link below. I follow the Semi industry quite closely and the most exciting development is the use of Europium doped Gallium Nitride substrates. The use is rising exponentially. As to your point, grams of these element will be needed but with a kilo of Eu current selling at $4k it doesn't take long to build a nice profit.

    Another exciting use being developed by the Chinese is the use of RE's as an alloy in rails steels. It is still in the development stage but when the technology is fully developed the use of REE's as a rail steel alloy will be substantial.

    http://bit.ly/yI3kgJ

    http://bit.ly/AlquOb
    Jan 19 03:26 PM | 8 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, May 23, 2011 [View instapost]
    Fair enough G.H. It sounds as though the $280m loan through the DoE is a done deal... One of the concerns that have is that this is a loan... Perhaps it may be a better to approach DARPA for Advanced Research funding which as far as I am aware, would not have to repaid... In any event a DoE loan of close to $300m will go on the Moly balance sheet and will face all of the repercussions that go along with it...

    Also, as you said, little factual information is available concerning the project development including business and site planning, engineering, logistics and supply chain issues and environmental issues... Moly needs to be more transparent with some of these issues while obviously retaining IP and engineering plans specific to the projects... Lack of this encourages speculation... It seems to me that thus far the information has been selective and promotes only the good aspects such as financing or even M&A...

    Lynas has become proficient at discussing the facts as well as the headwinds... Case in point is all of the wonderful site maps and pictures provided by Lynas to show where the money is going... As well, they are now releasing continual updates on issues like Forge and LAMP... Also IMO Lynas has improved their Public Relations on an order of a magnitude, possibly due to comments made on HotCopper...

    I wish Moly the best, I am one of the millions that pass the Mt. Pass site on a regular basis and I love to root for the home team... (I am a huge Denver Broncos and Rockies fan☺ )... That said, Lynas is becoming a giant and with little fanfare is getting the job done... It is possible that most of the "good" news is out on Moly... That can be the biggest headwind of all...
    May 25 12:35 AM | 8 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, January 31, 2012 [View instapost]
    Just a couple of comments, first of all the simple truth is that Lynas has become an institution in Malaysia, any investment of over $500m has critical mass in itself. To suggest that any operating permit will be denied goes against the rules of capitalism, there is just too much money for this situation to not work out. The true reason for the delays are engineering and construction problems that occur with any project this size.

    That said, the past month has been pretty flat for Lynas in terms of trading, the political sideshow SEEMS to threaten the completion and operation of LAMP but the facts are that it is a safe and well engineered facility. This has been known for a long time and the uninformed protest group is just passing the time.

    What is really concerning is that the lack of Rare Earths on the market are creating demand destruction in the marketplace. It's simple. Without any rare earths available on the market at a reasonable price, the end users have reason to develop uses for an end product. Instead of the infighting and competition within the industry, we should all be pulling for the Rare Earth Industry as a whole. Instead of a bigger piece of the pie, let's make the pie itself bigger...
    Jan 31 02:06 PM | 7 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, November 2, 2011 [View instapost]
    More from Toronto...

    First of all I need to apologize for spelling Gareth's name wrong... It is with an E as opposed to an A...

    When I arrived at the Toronto Hilton and was checking in, I met Jeb Handwerger, journalist and owner of the Gold Trade Stocks web site... Jeb has quite a following on his site and deals quite extensively with gold and silver trading. He is also moving into the REE arena. Also, early on the first day I met Mark MacDonald of UCORE. Mark is with the business development end of things in Halifax, (NS)... The three of us ended up spending time together and sharing a lunch or dinner table with most of the speakers at one time or another...

    I guess I will post my comments and notes in a chronological order as they were at the seminar. All of the subjects were very well chosen and presented in an order that made sense and had a natural flow. The presentations were followed by a short question and answer period. The answers to the questions were often annotated by other experts to give a little more color on the subject, without ego's!

    The seminar open with some opening remarks by Garath on supply/demand projections. His charts indicated REE demand increasing anywhere between 4 to 10% (annualized) over the next 8 years.

    This is obviously a projection and an encouraging one at that. If demand increases at this rate and the supply is not there, the first movers stand to do very well in an uncrowded space. There was some more discussion of REE demand with respect to the changing supply chain and the different regions and applications that will determine future growth. Annualized growth of 10% (compounded ?) is significant and will keep the demand increasing. However supply must be there to keep the users interested in REE applications... Of course different regions and demands will determine the individual elements use...

    The next speaker was Karl Gschneidner who presented an intro to Rare Earth Chemistry. It made me wish I paid better attention in my college chemistry class but it still was presented in a manner that even I got something out of it. Karl presented some moderate Physics describing the actions of the different atom shells and the significance of their interaction. Included were the different shapes of the 4f charge densities and other subjects (pretty interesting). IMO, the presentation was in depth enough to keep everyone interested yet general enough so someone like myself could keep up. Also Professor Gschneidner included many reference and facts that tied his chemistry presentation together with the Lanthanide group of metals (REE's)...

    Other things discussed included the separation process of REE's which is extremely complex and requires a level of understanding that I do not have. It helped me realize that REE production is a lot more than mining...

    As far as individual companies are concerned, it seemed as though everyone had an opinion on the current progress and future direction of the juniors especially those close to production. While I am not going to list any names or individual comments I will reveal some general thoughts and opinions. The prevailing opinions about the Juniors is that most will be gone is a few years. Pretty much everyone felt that the separation of the individual elements will provide a very large barrier of entry and will trip up many of the smaller players. That said, it seemed that there was a wide variety of opinions as to just who will be on the top of the pile as time goes on...

    I am a staunch believer in the financial statements and while cash on the balance sheet is of critical importance, the burn rate ultimately determines the staying power of any company. I guess what I am saying it the obvious, the better capitalized juniors will survive if they have control over their spending. In my discussions with Mark McDonald, he indicated that UCORE was well aware of this and was cautiously developing it's exploration plan and moving ahead with controlled progress. It is my feeling that the juniors need to put them in a position for potential M & A as the Capex of planning, engineering, constructing and operating a separation facility will be cost prohibitive...

    More a little later... :)
    Nov 2 03:53 PM | 7 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, October 25, 2011 [View instapost]
    Hi all, there was so much on the plate in Toronto I will post it a little at a time.

    First, the "housekeeping"...

    What an event!... Garath and Jack hit a real successful note; The attendance was around ~75 people or so (including staff and speakers)… It was possible to have lunch or dinner, one on one, with all of the speakers including the staff (Garath and Jack). We all had some excellent discussions with some very influential people in the REE space...

    I was very impressed with Garath, he made himself freely available and was a cordial as he could be. The event itself was well organized and included everything as advertised. Details such as issuing a power point supplement on a thumb drive (instead of a stack of papers), to carefully choreographed presentations helped keep the pace of things very smooth. The conference center was an excellent facility and the lunches and dinners were a room adjacent to the conference room. There was plenty of room for a cocktail party and having been to events that were spread out all over town, it was nice to have everything in one place...

    Once again, the networking opportunities were excellent, everyone was at ease and while I did manage a some discussions about specific stocks, the mood in general was generic, but focused on the REE industry. No self promoting or corporate spamming here :)

    All of the speakers were excellent, obviously professionals in their given fields and presented their subjects clearly and in a timely manner. Needless to say the equipment and presentation aids worked well and any small glitches were immediately resolved by Garath and Jack who were on top of things at all times. Did I mention that the presentation power points were on a thumb drive? :)

    Most stayed at the Toronto Hilton and it was a 4 minute walk from the conference center and it was the quality you would expect at the Hilton (Great Views)...

    I guess the main reason I am posting this is that I am hoping this might become an annnual event... When I left Toronto I felt like it was the best money I have spent in a long time...

    Sorry to bore anyone with these details but I thought I would explain these detail in case anyone wants to express interest to TMR for another event in the future...

    Just as another note, I discussed TB's instablog with Garath and he admitted to being a lurker (and occasional poster) on this blog. He doesn't follow many of the other sites and I told him we all appreciated his presence on the concentrator. He specifically noted the professional nature of this site!

    Sorry, time to jump on the plane... The speakers and DD next post!
    Nov 1 09:14 PM | 7 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, October 25, 2011 [View instapost]
    At the Boot Camp today (in Toronto) I had some very interesting conversations with some knowledgable people (including some speakers)… I am not going to list any names here but the overall sentiment is that the Lynas lamp issue is a non-issue…

    There was some concern about the timing of LAMP coming on line but as one of the presenters aptly put it, it is a large complex project that is essentially breaking ground in the REE industry. He went on to suggest that the rest of the industry will make sure Lynas succeeds for the benefit of the industry.

    The speakers thus far have been excellent and I expect another outstanding day tomorrow… More then :)
    Nov 1 12:28 AM | 7 Likes Like |Link to Comment
  • REE / Strategic Minerals Concentrator, October 6, 2011 [View instapost]
    Not sure if this was posted...

    KUANTAN: The Atomic Energy Licensing Board (AELB) has confirmed receiving a long-term waste management plan from Australian mining corporation Lynas for its rare earth refinery in Gebeng.

    However, AELB director-general Raja Datuk Abdul Aziz Raja Adnan said the plan would not be considered submitted until the board is satisfied that Lynas had fulfilled all requirements set by the International Atomic Energy Agency (IAEA).

    “We have received the long-term waste management plan from Lynas but we have not analysed it yet.

    “The plan will not be made public as I do not consider it submitted until we make sure it is in accordance with international standards,” he said when contacted.

    http://bit.ly/rllokA
    Oct 12 10:13 PM | 7 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, September 12, 2011 [View instapost]
    GWM… Where's the beef? I heard Jim sidestep questions about short term financing. He "hopes" shareholders will exercise warrants to the tune of $23m but it was pointed out the expiry is a couple of years down the road. Exercising is not likely... Jim made the statement that GWM is fully funded for this month and 1/2 of next month… What?

    Also I wonder how they are going to build a concentration and separation facility for $60m including Planning and Engineering...

    Yes, I can see a takeoff agreement in the near future, there has to be. The question becomes just what expense will the agreement demand… JMHO...
    Sep 15 07:49 PM | 7 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, July 25, 2011 [View instapost]
    Has anyone looked at the financial statements for GWM /LCM?…

    Cash on hand appears to be around $15m... With A/R, inventories and other assets, the current assets are around $25m...

    Mineral properties are assessed at $34m but it is difficult to determine if these are reserves of resources and where they are with respect to exploration (there are many)...

    Total assets are ~ $65m...

    Liabilities are low @ ~ $3.5m s

    In terms of cash flow, for the 3 month period ending March 31, 2011, cash flow was negative @ ~ $3m which annualized would be negative ~ $12m...

    Income from operating, investing and financing activities was ~ $5.5m with the majority coming from financing activities (issuance of shares for warrants/options more dilution)...

    With cash burn ~ $12 - $15m (annualized) and only financing income (dilution), I am wondering how GWM plans to continue operations without raising cash to finance it's activities… Also the company appears to be spread out with it's exploration efforts and other than the properties has little in terms of assets (such as plant property and equipment)...

    I about fell out of my chair when I saw ~350m shares outstanding… This company has ~ $50m or less in book value and is going to run into serious financial problems soon unless it has a secondary or debenture offering. Of course this will result in significant dilution given the pps… Also, I wish I was in line for the generous compensation as discussed in "note 13" in the filing…

    This would be a good time to sell into the rally… JMHO...


    www.gwmg.ca/images/fil...
    Jul 26 01:52 AM | 7 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, June 5, 2011 [View instapost]
    The problems begin...

    Molycorp Announces Proposed Offering of $200 Million of Convertible Senior Notes Due 2016

    Tuesday June 07, 2011 - 16:28 PM EDT

    Molycorp, Inc. (NYSE: MCP), the Western hemisphere's only producer of rare earth oxides, today announced that, subject to market conditions, it intends to offer $200 million principal amount of its Convertible Senior Notes due 2016 (the “Notes”) in an offering exempt from the registration requirements of the Securities Act of 1933. The Notes are being offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933. In addition, Molycorp intends to grant the initial purchasers of the Notes an option to purchase an additional $30 million principal amount of the Notes.

    finance.denverpost.com...
    Jun 7 05:37 PM | 7 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, May 30, 2011 [View instapost]
    31 lengths... Greatest Horse of all time (next to Man o' War :~) I witnessed the derby that year from the infield...

    With respect to the Vale threat, I was wondering when some good headwind would pop up now that Malaysia is falling out of favor...

    IMO the whole REE industry is predicated on demand which IMO is and will continue to accelerate at an exponential rate... As I commented on another blog, there are new uses being discovered every day and the existing applications are themselves demanding greater quantities... I read a couple of days ago that the new stealth helicopter used in the Bin Laden affair reportedly used significant REEs... It has recently been discovered that structural steel has significantly less corrosion when coated with REOs (Imagine the quantities there)... Neo Materials is a company dedicated to discovering new uses for REOs/Metal, and there are others...

    Back to your analogy, the real money didn't come from the horse races... the greatest benefit was from stud fee's...
    May 31 08:53 PM | 7 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, May 18, 2011 [View instapost]
    A very important development last week directly involving the sentiment of PM Najib late last week concerning technology based industries...

    The creation of the GSIAC is probably the most important recent development with respect to Malaysia and LAMP.. An article from Bernama (Malaysian News) reported on the importance of the newly formed council... The significance of Najib chairing the council is huge and he comments coming from various members of this council are telling to the future of technology in Malaysia... This council was very recently formed with the first meeting in New York at the World Trade Center...

    From the article:

    NEW YORK, May 19 (Bernama) -- Malaysia will be at the forefront of the next generation of advances in science and technology through the newly set-up Global Science and Innovation Advisory Council (GSIAC).

    Najib chaired the first GSIAC meeting attended by more than 35 council members, including 25 international members and 10 from Malaysia at the New York Academy of Sciences located at the World Trade Centre 7, downtown Manhattan.


    Comments by a prominent GSIAC member...

    "My major inputs are ... the use of waste products for green energy and chemistry," he said.

    IMO this is indicative of the final outcome of LAMP... Great news!

    www.bernama.com/bernam...
    May 21 11:37 PM | 7 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, Dec. 7,2012 [View instapost]
    Here are some very recent quotes by Wong Tack that may indicate a shift of focus from Lynas, to the government as a whole. While it does not look like he has 180ed his position, it would appear that he may be recognizing the truth and is looking for an easier street to hawk his wares...

    “After this, Lynas will not be our focus anymore. But to destroy the threat, we must look hard to prevent further corruption and abuse of power,” Himpunan Hijau chairman Wong Tack told The Malaysian Insider yesterday.

    “We will work hard to bring down the regime ... We will bring down the government,” Wong declared.

    He admitted that it would be impossible for the group to dismantle the Lynas Advanced Materials Plant (LAMP) which had been given the green light to operate after a temporary operating licence (TOL) was granted.

    “We were never against Lynas coming, we were never against rare earth, we just don’t want them to go through a short cut,” Wong asserted.

    “When they are 100 per cent ready, 100 per cent safe, and comply with the regulations 100 per cent, they can go on. Why does Malaysia have to take all the risk?”

    Despite shifting its focus on other environmental threats in Malaysia, Wong stressed that Himpunan Hijau will not be sitting idly with regards to Lynas.


    http://bit.ly/YLeeS3
    Jan 1 12:35 PM | 6 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, May 10, 2012 [View instapost]
    May 10 (Reuters) - Lynas Corp Ltd said on Thursday it was on track to start up its rare earths plant in Malaysia next month after an official in the country called it "the safest rare earths plant in the world."

    http://reut.rs/M1Yt7a
    May 10 07:46 PM | 6 Likes Like |Link to Comment
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