PERTH (miningweekly.com) – The share price of rare earths miner Lynas tumbled on Tuesday after CEO Amanda Lacaze said that the company was unlikely to remain cash flow positive during the March quarter, despite reaching this milestone during December.
She said that factors contributing to this included the current market environment, which included low demand and pricing owing to the continued uncertainty relating to the Chinese government policy, as well as ongoing costs associated with restructuring.
While the company’s quarter-on-quarter production had increased, Lacaze said issues had arisen during the production ramp-up, which required remedial action. Actions to address these issues were being implemented and production was now returning to stable rates.
“While we will seek to recover production through the current quarter, it is unlikely we will be able to mitigate the full effect,” she said.
During the three months to December, Lynas produced 2 177 t of rare-earth oxide, up from the 2 043 t produced in the September quarter.
Improvements in both the throughput and reliability of kiln operations continued during the December quarter, and Lynas noted that the kilns, which were the bottleneck for the Lynas Advanced Materials Plant (LAMP), in Malaysia, from the start-up, until September last year, could now reliably produce consistent quality leach liquor feed for the solvent extraction circuits.
Solvent extraction was the current constraint at LAMP, with only the Phase 1 operation in full operation.
Commissioning of the Phase 2 solvent extraction plant started during the quarter, but this required a significant rare earth oxide feed, which has required several weeks to load and stabilise.
Lynas noted that a portion of the rare earth oxide feed into the LAMP was used to fill the Phase 2 solvent extraction stages, which reduced production of ready-to-sell product.
During the quarter, Lynas sold 2 014 t of rare-earth oxides, generating revenue of A$45.1-million.
Lynas traded as low as A$0.05 a share on Tuesday, down 20% on its previous closing price.