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Lynas Rare Earths Limited (ASX:LYC) or formerly known as Lynas Corporation Limited has climbed the ASX price ladder swiftly with the stock now reaching a new all-time high of $3.870 (as on 2 December 2020 12:36 PM AEDT).
Lynas has been on a continuous uptrend from the level of $1.021 (seen in March 2020), with the stock posting 28.77 per cent gains, one of the strongest gains in November 2020.
LYC Agreement With the Pentagon
The stock has been clinching higher and higher value on the exchange since inking a deal with the United States Department of Defense (DoD) back in July 2020.
The Company entered an agreement with the Pentagon to conduct the detailed market strategy study, planning, and the design work related to the rare earth elements separation facility across the United States.
In the deal with the Pentagon, LYC secured funding from the U.S. DoD and decided to utilise the inhouse intellectual property and proven track record to design and operate the separation facility, which is pegged to be completed in FY2021.
To Know More, Do Red: Lynas And Pentagon Ink Contract for In-Situ Development of a REO Separation Facility
Apart from the contract secured with the Pentagon, the quarterly performance for the period ended 30 September 2020 has also been a sentiment booster for the stock.
Primary Mineralisation Below the Existing Rare Earths Pit at Mt Weld
LYC recently conducted deeper drilling in the Fresh Carbonatite below the area of the Mineral Resources and Ore Reserves, successfully establishing two new bores below the current pit floor at a depth of 100 and 106 metres.
Geological section of Boreholes (Source: Company’s Report Dated 26 November 2020)
As a result of the same, the Company received considerable and continuous intersections of Rare Earth minerals, including both lightweight and heavyweight.
The new borehole identified as LWB025 included 2.2 per cent of REOs in carbonatite from 52m to 201m (for 149m). Likewise, another borehole identified as LWB026 included 2.7 per cent of REOs in carbonatite from 17m to 78m (for 61m).
Collar Positions of Boreholes (Source: Company’s Report Dated 26 November 2020)
September 2020 Quarterly Highlights
Image Source: © Kalkine Group 2020
LYC generated a sales revenue of $87 million during the period, more than double against the previous corresponding period (pcp). The strong revenue for the period was primarily due to the increase in sales volume during the period.
The REO sales volume for the quarter remained ~ 139 per cent higher against pcp at 4,499 tonnes.
Apart from that, several other components of the deal with the Pentagon and developments across the business front such as the Lynas 2025 plan, have lifted market sentiments around the Company, propelling the stock to a new all-time high.
Lynas 2025 Initiatives
Under the 2025 initiatives, LYC plans to construct an in-situ processing facility at Kalgoorlie and also plans to upgrade its Malaysian plant.
During the September 2020 quarter, the Company raised $425 million through institutional and retail entitlement offer, and the fund would now be utilised to support the 2025 foundation projects. Apart from that, the Company demonstrated several signs of progress at the Kalgoorlie project, including obtaining the General Purpose Lease under the Mining Act for the site of the project.
The stock of the Company last traded at $3.860 (1:31 AEDT), up by 0.139 per cent against its previous close on ASX.
