EDITOR: | June 16th, 2014 | 16 Comments

Lifton and Weslosky on Noyrez’s departure from Lynas, the Tesla Gigafactory and the critical materials market today

| June 16, 2014 | 16 Comments
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Weslosky-Lifton-2June 16, 2014 — From Eric Noyrez’s departure from Lynas to the Tesla Gigafactory and antimony — Tracy Weslosky, Editor-in-Chief and Publisher of InvestorIntel and Jack Lifton, Founding Principal of Technology Metals Research (TMR), LLC talk about the critical materials sector and where it is headed in this week’s InvestorIntelReport. Not surprisingly, Tracy and Jack start by discussing the surprise resignation of Eric Noyrez as CEO of Lynas Corp. Jack points out that through his reading of emails from Lynas, press releases and other related statements, Lynas has painted Noyrez’s resignation as the ‘reward’ for having completed what he was brought in to do: bring the Lynas Advanced Materials Plant (LAMP) in Malaysia to full operation. However, says Jack, Noyrez is 54 years old and he is moving back to France after having gathered significant experience in Asia.

Jack praises Noyrez as one of the most experienced and best informed professionals in the rare earths sector. So, a rather perplexed Jack puts it rather bluntly: ‘why is he being replaced by a ‘bean counter’?” The concern is no way intended as an insult. Accountants are usually brought in to lead a company after the technical issues have been resolved. Jack suggests that Lynas has yet to address a variety of technical issue and that it seems rather ‘optimistic’ to be putting accountants in charge. Therefore, Jack does not think the move will be beneficial to Lynas. Tracy shares Jack’s respect for Noyrez but cannot hold back her enthusiasm for the fact that there is finally a female CEO in the rare earth sector — Amanda Lacaze.

Tracy and Jack also talk about Tesla Motors and how their electric car ‘revolution’ and battery ‘gigafactory’ plans have favored the shares of many graphite plays. For his part, Jack is surprised that Tesla has already managed to raise some three and a half billion out of the five billion they need to build their factory. Jack also notes that Tesla is looking at Reno, Nevada as one of their locations. Jack says that the availability of rare earths is trivial, at best, in Tesla’s location scouting considerations; they have a very high concern for such materials as cobalt, lithium and graphite.  In fact, Jack says, given the number of cars and batteries that Tesla intends to produce, the ‘gigafactory’ may end up consuming “about 25 percent of the world’s lithium resources and a good percentage of graphite; given that this is ‘new use’, it would drive new mining and refining”.

Tracy and Jack also offer some interesting insights into niobium, a new niobium play, NioCorp (TSXV: NB) managed by Mark Smith (former CEO of Molycorp) that is starting to get some favorable market attention and the importance of this metal to the future of electric cars. Notably, Jack believes that NioCorp could “become a real niobium alternative to Brazil,” which is currently the world’s major producer.

Tracy and also has Jack discuss his own news with TMR. TMR recently received an Army Research Laboratory sub-contract to review rare earths processing technologies in order to determine whether or not technologies promising to offer greater speed and efficiency have any merit. “The ultimate idea is to, one day; build a pilot plant with the most efficient and highest speed separation technology.” Tracy and Jack end the discussion with some thoughts on a few rare earths companies. One of these is Ucore, which Jack considers a ‘sleeper’ despite the current lackluster share performance.

Final note, Tracy brings up InvestorIntel guest columnist and Hallgarten analyst Chris Ecclestone’s recent appointment as CEO for antimony driven Geodex Minerals Ltd.


Tracy Weslosky

Editor:

Tracy Weslosky is the CEO of InvestorIntel Corp., a company that publishes InvestorIntel.com. A leading source for investors, entrepreneurs and industry leaders alike, InvestorIntel is ... <Read more about Tracy Weslosky>


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Comments

  • Tim Ainsworth

    Jack, there is a very distinct difference between strategic marketing/delivering outstanding financial performance than counting it.

    June 16, 2014 - 4:50 PM

    • Tracy Weslosky

      Hey Tim. Just want to clarify that I am quite excited about Amanda’s new leadership role, and who knows: she may end up being CEO of the YR. Thanks for your note and commentary, as always.

      June 17, 2014 - 1:52 PM

  • Callum

    Jack, You might be better served reading the press releases and company announcements a little closer. The new CEO Amanda Lacaze is not a an accountant. Yes she has expertise in pricing but her background is principally in marketing.

    Stick to your area of expertise.

    June 17, 2014 - 12:48 AM

    • Tracy Weslosky

      You have concluded incorrectly and must not have heard Jack’s commentary. He says some lovely things about Amanda’s talents gained from being the CFO…link to the video is above. Usually this is for InvestorIntelReport members only as most people in this audience know Jack and me — and will appreciate where he is coming from. And indeed: we were surprised by Eric’s departure as we both deemed him well qualified and an excellent leader.

      June 17, 2014 - 1:54 PM

  • Andrew

    Lynas no need strong marketing and no need tv advertisement. Rare earth users are all familiar with the products. Lynas just need an accountant to perform pricing and prepare contract and agreement. A CFO can do the same. So lynas has TWO people to do similar thing. No wonder the capital market give lynas a thumb down on its share price.

    June 17, 2014 - 2:07 AM

  • blackjack

    I dont know
    the SP of Lynas dropped significantly over 80% under his directorship
    the World class LAMP was in fact the most inspected thing in the RE arena – the best of the best – and so when fired up should have worked.

    However, it fell apart. Something the locals raised concerns about.

    Praise where praise due but Eric had zero PR skills.

    The last time I looked the SP was 14 cents and dropping – probably someone loading up shares so as to take the LAMP over and get it run properly and profitably.

    The only winner in this sad story was the ex CEO.

    June 17, 2014 - 3:50 AM

  • Steve Mackowski

    Beg to differ. No better leaders of the REO story than Judith and Tracy in the research and investor relations field. And don’t forget the contribution of Karin in the development of REO separation. Amanda has some strong competition.

    June 17, 2014 - 4:11 AM

    • Tracy Weslosky

      Thanks Steve.

      June 18, 2014 - 1:39 PM

  • Gordon

    I spoke with the investor relations person of Ucore at length about a week ago , basically the message was that the world is going to change for Ucore after the Bankable Feasibility Study comes out this fall.

    June 17, 2014 - 11:14 AM

    • Tracy Weslosky

      Ucore has many supporters and their innovative teamwork with the Alaskan government provides evidence surrounding the bench strength of management. Thank you for posting.

      June 17, 2014 - 1:56 PM

    • hackenzac

      Gordon; Your info is BFS this fall 2014? Please confirm.

      June 17, 2014 - 9:54 PM

  • Aat Oskam

    Amanda Lacaza’s Linked-In profile: At MLC Consulting: The practice focuses on creating value in underperforming businesses including turnaround and transformation projects.
    That is very usefull for Lynas nowadays, I am sorry to say..
    (still shareholder)
    Btw Jack: please buy a better webcam / laptop please?

    June 17, 2014 - 4:00 PM

  • JJ

    The equation is simple. Lynas will inevitably go under (liquidation, insolvency, etc.) either be restructured or be taken over. The debt is high and income low. Amanda has skills and experience to help Lynas in the process of the financial transformation. Eric is the perfect leader for an established business/industrial operation.

    June 17, 2014 - 7:15 PM

    • JJ Beswick

      Hi other JJ; seems a bit of a simplistic analysis there!
      Any facts involved?
      Balance sheet isn’t too bad; $450m debt backed by $1.1bn assets. Not so bad for a startup. (No goodwill/intangibles on the BS to the tune of $500m either, unlike a key competitor! )
      Production?
      Jan-Feb combined 600t.
      March 575t
      April 709t
      Guidance: Will be at nameplate 917 tpm rate by the end of the quarter (and it’s illegal to know you won’t make guidance and not announce that).
      Cash flow?
      We know they had $62m in the kitty end of April (nominal; includes the cap raising). And April production was very close to the cash flow neutral guidance of 750 tpm. That guidance explicitly includes ALL costs except capital outlays and funding costs. (Interest $3m per month near enough.)
      So they have money and should be currently making a (modest) profit if the customers are prompt payers.
      Sales?
      They say (guidance again) they can sell all they produce at a profit @ current prices and 11 ktpa production.

      Might they go belly up?
      Of course, as for many other startups.
      Is it as simple as you claim?
      Not by a long shot.

      June 18, 2014 - 9:20 AM

  • freethinking

    excellent interview, thankyou Tracy and Jack

    June 23, 2014 - 5:17 AM

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