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Commodities

Lynas Share Price Down Marginally — Rare Earths Back on Menu

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By Lachlann Tierney, Friday, 29 January 2021

At time of writing, the share price of Lynas Rare Earths Ltd (ASX:LYC) is down around 0.8%, trading at $4.94. It’s been a strong and sustained surge for the LYC share price from the March low. We take a quick look at the LYC quarterly...

At time of writing, the share price of Lynas Rare Earths Ltd [ASX:LYC] is down around 0.8%, trading at $4.94.

It’s been a strong and sustained surge for the LYC share price from the March low:

ASX LYC Share Price Chart

Source: tradingview.com

We take a quick look at the LYC quarterly, and why the Lynas share price is moving further up. We then look at the outlook for Lynas and rare earths more generally.

Highlight from Lynas quarterly reveal a company moving forward

Here are the key snippets from the most recent quarterly:

  • ‘Record Quarterly Sales Revenue of $119.4m (Q1 FY21: A$87.3m)
  • ‘Production in line with guidance:
  • ‘NdPr Production: 1367 tonnes (Q1FY21: 1342)
  • ‘Cash conversion with the quarter was low
  • ‘Reduced shipping schedules and delayed sailings (due to COVID-19) skewed sales to late in the quarter
  • ‘Closing cash balance A$512.6m (Q1 FY21: A $522.0)
  • ‘Progress on Kalgoorlie project continued including placing orders for key process equipment
  • ‘Exploration at Mt Weld indentified potential REE mineralisation below the current Mt Weld Rare Earths pit (announced 26 November 2020)’

So accelerating revenue growth, a slightly smaller cash balance, some operational difficulties and some operational successes.

At these heights, the LYC share price might seem a bit lofty for the value oriented out there.

Here’s why I think this could just be the beginning for Lynas and rare earths more generally.

Too many factors point to LYC share price and REE resurgence

Let’s keep it short and sweet here:

  1. Biden presidency and renewables push (EVs permanent magnets etc)
  2. European commitment to lowering emissions
  3. Recent events in Taiwan Strait point to US stance on China remaining the same, even if tone changes

All this points to a sustained push by Western powers to make a major shift in the REE supply chain.

I’ve noticed many players in the mini-sector moving as well.

This may not be REE boom-redux just yet.

But many seem to be positioning for an outcome like that, just based on the charts I’m watching.

Lithium is moving too if you weren’t aware of the obvious.

We’ve got one unique lithium player based in Europe and listed on the ASX in this report.

It’s still a small-cap, so if that doesn’t pique your interest, I don’t know what will.

Download it for free, right here.

Regards,

Lachlann Tierney

For Money Morning

PS: Energy expert Selva Freigedo reveals three ways you can capitalise on the $95 trillion renewable energy boom. Download your free report now.

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

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Lachlann Tierney
Lachlann ‘Lachy’ Tierney is passionate about uncovering hidden opportunities in the microcap sector. With four years of experience as a senior equities analyst at one of Australia’s leading microcap firms, he has built a reputation for rigorous research, deep-dive due diligence, and accessible investor communications. Over this time, he has vetted seed, pre-IPO and ASX-listed companies across sectors, conducted onsite visits, and built strong relationships across the microcap space. Lachy is nearing completion of a PhD in economics at RMIT University, where his research focuses on blockchain governance and voting systems. His work is housed within the Blockchain Innovation Hub at RMIT, a leading research centre for crypto-economics and blockchain research. He holds a Master’s degree from the London School of Economics and an Honours BA in Philosophy and Politics from the University of Melbourne. Born in New York and raised in California, Lachy grew up a few blocks from biotech giant Amgen and counts among his peers various characters in the overlapping worlds of venture capital, technology and crypto. When he’s not researching microcaps, he’s most likely sweating it out in a sauna or dunking himself in cold Tasmanian water.

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All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

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