Company Profile – Lynas Corp (LYC) Shares

Rare earths have been big news over the past year. We discussed rare earth shares in detail recently.

On the ASX, the company that has gained the most attention has been Lynas Corp (LYC).

LYC has rapidly grown from a minnow and is now part of the ASX top 100.

LYC says is aim is to create a reliable, fully integrated source of rare earths from mine through to market and become the leading benchmark in the rare earth sector.

LYC’s major operation is in Mount Weld in Western Australia. This company says it is the richest known deposit of rare earths in the world.

Lynas was originally a gold mining operation before current chairman Nicholas Curtis bought a stake in 1999.

Curtis had experience in rare earths and saw Lynas an option to buy Australia’s most promising rare earths deposits at Mount Weld in Western Australia.

High hopes

The company now aims to provide the first commercial supply of rare earths outside of China by the third quarter of 2011.

Lynas mines rare earths at a purity level of around 15%. From there, the material is taken to a concentration plant when the level rises to around 40%.

This material is then shipped to Malaysia, where the company has set up the Lynas Advanced Material Plant and refined to a saleable level. At the moment, full production is scheduled for third quarter of 2011.

The numbers

Looking at the financials, the company made a net loss of $43 million in 2010, on the back of a $29 million loss in 2009.

Last year, operating expenses were just a pinch over $30 million. At 30 June 2010, the company has over $400 million in the bank, so the company is clearly well capitalised for the moment.

Besides, investors are pouring money into the company, so any need to raise capital should not be too much of a problem in the current environment.

The most recent survey of share analysts, from February 2011, found that three brokers called LYC shares a “buy”, one an “outperform”, and two brokers called the shares a “sell”.

Globally, the company’s main competitor will be US based rare earths company Moly Corp.

We have further articles about rare earth shares in our archive.