The stock of the Lynas Corporation Limited (ASX: LYC) has performed tremendously well in 2019. Lynas’ stock has generated a return of 58.96 per cent on a YTD basis with 87.69 per cent return during the last five years. On the other hand, S&P/ASX 200 has delivered a YTD return of 16.16 per cent. However, the company’s stock closed lower at AUD 2.360 on 24th May 2019, down by 3.279 per cent relative to last close. The stock fluctuated between a high and low value of AUD 2.49 and AUD 2.34, respectively during the intraday session.
The exceptional performance of the stock in the past years can be parallelly seen with the developments made by the company in 2019.
Lynas Corporation Limited, explores, develops, mines and processes the rare earth minerals. One of its aligned assets, Mt Weld, Western Australia is recognised among the highest-grade rare earths mine in the world. Lynas undertakes mining and initial processing of rare earth oxides at its Mt Weld Concentration Plant.
The company has a portfolio of aligned assets, including Mt Weld, Mt Weld Concentration Plant and Lynas Advanced Materials Plant (LAMP). It supplies high-quality rare earths, particularly the strategically significant neodymium, praseodymium (NdPr) and other rare earth materials.
The demand for NdPr is forecasted to accelerate from 2021. According to Energy International Agency, around 125-220 million electric cars will be on the road in 2030, which is equivalent to 88-155ktns additional supply of NdPr over the next ten years.
As the Electric Vehicles (EVs) are expensive and the battery accounts for 50 per cent of the cost of EVs, a Rare Earth Electric Vehicle drive is the solution, as per the company. Almost all car makers are embracing Rare Earth technology except for a few luxury car brands, providing substantial growth opportunities for companies like Lynas.
The company recently released the Investors Presentation on 21st May 2019. The presentation included the work completed by the company to date and the further work that is in pipeline. The presentation included an update on the company’s Malaysian, US and Western Australian Projects.
The company’s track record reveals that it is on a growing path as the company has witnessed a growth in Production Volume, Sales Revenue, NPAT, EBITDA and Cash Flow over time.
Recently, Lynas signed an MoU with a Blue Line Corporation located in Texas for the joint development of Rare Earths separation in the USA. Lynas expects that this partnership will maximise the value of its Heavy Rare Earths and speed up the USA market growth by providing there a sustainable source of supply.
On 16th April 2019, the company announced its quarterly report for the period ending 31st March 2019. The invoiced sales revenue grew 26.8 per cent to AUD 101.3 million during the quarter in comparison to the prior quarter. Lynas reported a cash balance of AUD 67.1 million at the end of March 2019 quarter.
The Malaysian Prime Minister supported the continuation of the company’s operations in Malaysia during a press conference on 5th April 2019. The positive comments of the Prime Minister created an optimistic environment as the company had earlier been in a regulatory conflict.
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