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, 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:
- Biden presidency and renewables push (EVs permanent magnets etc)
- European commitment to lowering emissions
- 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.
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