{"id":61935,"date":"2014-10-15T03:51:50","date_gmt":"2014-10-15T07:51:50","guid":{"rendered":"http:\/\/countingpips.com\/?p=61935"},"modified":"2014-10-15T03:51:50","modified_gmt":"2014-10-15T07:51:50","slug":"why-the-lynas-corporations-share-price-fell-today","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/10\/why-the-lynas-corporations-share-price-fell-today\/","title":{"rendered":"Why the Lynas Corporations Share Price Fell Today"},"content":{"rendered":"
October 15, 2014<\/div>
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By MoneyMorning.com.au<\/u><\/a><\/p>\n

What Happened to the Lynas Share Price?<\/h2>\n

Lynas Corporation Limited [ASX:LYC]<\/strong> is involved in exploration and development of rare earth minerals. Its main asset is the Mt Weld rare earth site in Western Australia. <\/p>\n

The share price closed 2.41% lower on Wednesday. <\/p>\n

Why Did This Happen to LYC Shares?<\/h2>\n

The first quarter financial results were released this morning. In the three months to September, revenue was $31.06 million. This is almost half the total revenue the company achieved for the 2014 financial year of $66.23 million. However, operating costs outweighed revenue by $10.4 million. <\/p>\n

At the end of the 2013 financial year, the company had a solid $141.4 million in the bank. When 2014 wrapped up, Lynas was left with $38.1 million.<\/p>\n

The biggest problem from this quarterly report is just how little cash is left. LYC has just $16.9 million in the bank as at the end of September 30.<\/p>

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What Now for Lynas Corporation Limited?<\/h2>\n

Lynas remains a speculative punt. <\/p>\n

The recent $83 million capital raising is the second time this year the company has put its hand out to shareholders. <\/p>\n

In spite of revenue\u2019s growing, the company\u2019s costs per unit are roughly double the current rare earths \u2018basket sales price\u2019 of US$18.22 per kilo. Any increases in production without a drastic increase in the price of rare earths will only drive the company further into the red. <\/p>\n

On top of this is the massive debt that needs to be repaid within two years.<\/p>\n

Lynas have a US$440 million debt facility due in mid-2016. However, before this is paid in full, the company must stump up US$90 million (AU$103 million) by the end of 2015. Given the cash on hand and poor revenues, this seems very unlikely. <\/p>\n

In fact, because of these looming payments, it\u2019s likely that 2015 will see perhaps two more capital raisings.<\/p>\n

This highly leveraged company is one to stay away from.<\/p>\n

Shae Smith+<\/a>
\nEditor, Money Weekend<\/em><\/strong> <\/p>\n

Join Money Morning on Google+ <\/span><\/a><\/strong><\/p>\n

The post Why the Lynas Corporations Share Price Fell Today<\/a> appeared first on Stock Market News, Finance and Investments | Money Morning Australia<\/a>.<\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au What Happened to the Lynas Share Price? Lynas Corporation Limited [ASX:LYC] is involved in exploration and development of rare earth minerals. Its main asset is the Mt Weld rare earth site in Western Australia. The share price closed 2.41% lower on Wednesday. Why Did This Happen to LYC Shares? The first quarter financial […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-61935","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/61935","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=61935"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/61935\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=61935"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=61935"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=61935"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}