Lynas Corporation Limited
Lynas Corporation Limited (ASX: LYC) is engaged in integrated extraction and processing of Rare Earth minerals, primarily in Australia and Malaysia; and development of Rare Earth deposits. The company recently provided the clarifications of Mineral Resources and Ore Reserves Figures.
The company confirmed that “2018 Mineral Resource” and “2018 Mineral Reserve” figures were taken from an update released on 6 August 2018. At the same time, LYC conveyed about no material changes to these numbers.
The company introduced Lynas 2025 as a larger business to meet forecast demand growth with efficient capacity expansion leveraging Lynas’ unique assets. Lynas is planning on spending A$500 mn by 2025 to establish new industrial footprint providing expanded geographical coverage. The company will Invest in downstream expansion which will include heavy rare earth separation and Cerium Purification. Deploying effective investments and engineering methodology, the company is poised to deliver within the nominated capital envelope and LYC has a strong history as an excellent steward of capital.
Strong Balance Sheet for Further Growth: At present, debt on the balance sheet of the company stood at US$162 million, of which US$15 million is convertible bonds. Cash balance at the end of 31 March 2019 comes in at A$67.1 million. The company has been enjoying strong operating cash flow of A$185.7 million since the last seven quarters which comes in at A$26.5 million on average per quarter.
Extended Support from JARE: With the request of LYC to modify the repayment obligations to extend the term of the JARE facility, LYC is optimistic about its ability to self-fund the project.
Lynas 2025: Growing with Market (Source: Company Reports)
Ausdrill Limited (ASX: ASL)
Diversified mining services company Ausdrill Limited (ASX: ASL) is a diversified mining company and a leader in open-cut and underground contract mining, diamond drilling, grade control, drill & blast, exploration, mineral analysis, procurement and logistics.
The company recently announced that a three-year extension of amount to $126 million has been granted to BTP (its earthmoving parts and equipment subsidiary) for the contract with Peabody Australia. With this development, the subsidiary company will carry on rent mining and ancillary equipment to Peabody’s coal mines which is situated in the Hunter Valley and Bowen Basin. BTP and Peabody are partners since April 2015. The extension will come into effect from 1 April 2019. However, Peabody will have an option to extend it for next two years. With this, the management looks forward to continue the partnership with Peabody to provide equipment and related services which will build a stronger relationship further. To a brief about Peabody, it is a leading global pure-play coal company from Fortune 500. The company offers its services to power and steel consumers. The company currently have footprints in >25 geographies with 6 continents.
The company recently advised not to proceed at present with the earlier communication related to US Notes (Guaranteed Senior Notes) by Ausdrill Finance Pty Ltd (a wholly owned subsidiary). The decision has been taken on account of weak market conditions and the management found it no longer attractive to proceed with the refinancing.
Operating Model (Source: Company Reports)
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