Lynas Targets Multiple Rare Earth Supply Chains
Amanda Lacaze, Managing Director of Lynas Corporation Ltd. (ASX: LYC | OTC: LYSDY) in an interview with InvestorIntel Editor Peter Clausi discuss the Australian’s rare earth plays. Being the largest rare earths producer outside China, Amanda tells us of their primary product, neodymium and praseodymium (NdPr): “it is not a commodity, it is actually a specified functional material; so it can’t be sold into a pool and then sold out, and that’s a very good thing for our business.” Lynas also targets the mixed oxide supply chain with lanthanum and cerium, and they reported record-breaking positive cash flow last quarter of AUS$11.6 million.
Peter Clausi: Lynas has had a great year so far.
Amanda Lacaze: We’ve been quite pleased with this year. There’s been a lot of heavy lifting in Lynas and I know that you have tracked Lynas’ performance over time. We’re pretty happy. We’re in a good spot now. We’ve now got 100% of our assets commissioned. We’ve got one separation train yet that we’re going to look at how we actually bring that into play, but we’re operating at slightly above design rates for Nd Pr which is the most valuable of the materials we produce.
Peter Clausi: A year ago you came to the conference saying you had erased debt, you put the assets— getting them ready for production and you had said it was going to be a big, big year. Now a recent press release shows that you have positive cash flow.
Amanda Lacaze: Actually I’m not sure that I said we had erased it. We’ve taken it away as a continuing issue. In fact, in the year just passed we did do a further rescheduling of the debt. I think we may have some of the cheapest money in the world seeing we’re secured at 2.5%. Our bond is now at 1.25% coupon. Both of those debts have been pushed out, so we have plenty of runway.
Peter Clausi: Is that with a bank or a private lender?
Amanda Lacaze: The senior secured is with a company called JARE, which is a special purpose vehicle combined from JOGMEC, which is a Japanese government instrumentality, and Sojitz. Our subsidiary convertible bond is actually with a group of hedge funds basically. Both of our lenders have been very supportive during the period of time that the business has been both ramping up and also dealing with the most unfavorable market conditions that most people can remember. We are very aligned. We’re very aligned on making a strong and successful business that sees good returns to all stakeholders…to access the full interview, click here
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