Lynas Rare Earths Shares Rise as Firm Posts Record Revenue and Receipts in Q4

Source: Streetwise Reports   07/26/2021

Shares of Lynas Rare Earths Ltd. traded 10% higher after the company reported record revenue in Q4/21 due to continued strong global demand for NdPr products.

Rare earth materials producer Lynas Rare Earths Ltd. (LYC:ASX; LYSCF:OTC) today announced financial results for its fourth quarter ended June 30, 2021.

The company’s CEO and Managing Director Amanda Lacaze commented, “I am very pleased to report excellent results for the June quarter.”

Lacaze advised that the company achieved record sales revenue in Q4/21 of A$185.9 million along with record sales receipts totaling A$192 million. These sales and receipt levels were up significantly from A$110 million and A$133 million, respectively in Q3/21.

The company attributes these results to higher rare earth element (REE) prices and the strong ongoing demand for its NdPr products (neodymium praseodymium used in magnets) from customers and governments worldwide seeking to secure a diversified supply source of responsibly mined rare earth materials.

The firm stated that its REO production in Q4/21 totaled 3,778 tonnes, compared to 4,463 tonnes in Q3/21 and 2,579 tonnes in Q4/20. The company noted that its NdPr production measured 1,393 tonnes in Q4/21, compared to 1,359 tonnes in Q3/21 and 775 tonnes in Q4/20.

Lynas noted that NdPr production in the most recent quarter was a strong positive considering the challenges presented from the pandemic in Malaysia. The company’s Malaysia team has been able to successfully manage water supply shortages affecting the Gebeng Industrial Estate and in spite of those issues the firm said that it has been able to continue operations at around 75% of Lynas NEXT production rates.

The firm explained that NdPr market prices softened somewhat during the most recent quarter after increases in previous months, but have now rebounded a bit in July. The company pointed out that the average China Domestic NdPr Price was US$69.9/kg in Q4/21 and that demand is now back to pre-pandemic levels in the automotive and the fluid catalytic cracking (FCC) sectors.

The company stated that in Q4/21 it submitted the information requested by the Western Australia Environment Protection Authority (EPA) for its Kalgoorlie rare earth processing facility. The firm is now preparing for its next mining campaign at Mt Weld which has already begun.

Lynas noted that in Q4/21 it submitted a detailed engineering and design work to the U.S. government for a Heavy Rare Earths (HRE) facility projected for 2025. The firm advised that the U.S. Department of Defense is presently conducting a merit evaluation of the submission.

Lynas is headquartered in Malaysia and is involved in mining and processing rare earth minerals in Australia and Malaysia. The company stated on its company website that “it is the only producer of scale of separated Rare Earths outside of China and the second largest in the world.” After being mined and processed at its Mt Weld Concentration Plant, Lynas’ rare earth oxides are transported to its materials plant in Gebeng, Malaysia, where the raw concentrate is processed further into high quality rare earth materials including NdPr, Lanthanum (La), Cerium (Ce) and Mixed Heavy Rare Earths (SEG) that are sold for use in catalytic converters, electric and hybrid motor vehicles, electronics and wind turbines.

Lynas Rare Earths has a market cap of around US$4.7 billion with approximately 901.1 million shares outstanding. LYSCF shares opened nearly 8% higher today at US$5.08 (+US$0.37, +7.86%) over Friday’s US$4.71 closing price. The stock has traded today between US$5.08 to US$5.25 per share and closed for trading at US$5.18 (+US$0.47, +9.98%).

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