Lynas Rare Earths to raise A$750M, warns of uncertainty in progress of Texas plant

[Modern industry depends on mining for the valuable rare-earth, rare earth crystal detail]
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Lynas Rare Earths (OTCPK:LYSCF [https://seekingalpha.com/symbol/LYSCF]) (OTCPK:LYSDY [https://seekingalpha.com/symbol/LYSDY]) said Thursday it plans to raise A$750M [https://www.wsj.com/business/lynas-rare-earths-flags-texas-plant-uncertainty-aeac48db] (US$488M) through a share sale to help fund its expansion and pursue deals with metal or magnet makers, but cautioned it may not move forward with a planned heavy rare earths processing facility in Texas.

The world's largest producer of rare earths outside China said it will issue new stock at A$13.25/share, a 10% discount to its last traded price, to help boost its processing capacity and add to its resources, as well as ramp up its existing operations.

Lynas (OTCPK:LYSCF [https://seekingalpha.com/symbol/LYSCF]) (OTCPK:LYSDY [https://seekingalpha.com/symbol/LYSDY]) shares have mpre than doubled YTD, and closed Wednesday at A$14.73/share before a trading halt on Thursday, but the company reported net profit after tax for the year ended June 30 plunged more than 90% to A$8M (US$5.2M) from $84.5M in the prior year while also missing the A$30.4M Visible Alpha analyst consensus estimate.

Lynas (OTCPK:LYSCF [https://seekingalpha.com/symbol/LYSCF]) (OTCPK:LYSDY [https://seekingalpha.com/symbol/LYSDY]) has been developing plans for a plant in Seadrift, Texas, but said Thursday there was "significant uncertainty as to whether the construction... will proceed and, if so, in what form."

The project was allocated $258M in grant funding by the U.S. Department of Defense in 2023, but Lynas (OTCPK:LYSCF [https://seekingalpha.com/symbol/LYSCF]) (OTCPK:LYSDY [https://seekingalpha.com/symbol/LYSDY]) said it is in talks with DoD officials about a "mutually acceptable" supply arrangement for production from its existing operations.

"While there can be no certainty that offtake agreements will be agreed, any offtake agreements would need to be on commercial terms acceptable to Lynas," the company said.

Lynas (OTCPK:LYSCF [https://seekingalpha.com/symbol/LYSCF]) (OTCPK:LYSDY [https://seekingalpha.com/symbol/LYSDY]) can "have a broader range of separated heavy rare earths coming out of our facility in Malaysia faster than we would a greenfields site in the U.S.," CEO Amanda Lacaze said on the company's earnings conference call.

MORE ON LYNAS RARE EARTHS

* Lynas Rare Earths: Leader Of The Ex-China Rare Earths [https://seekingalpha.com/article/4798819-lynas-rare-earths-leader-of-the-ex-china-rare-earths]
* Lynas Rare Earths: Still Bullish On REE Price Recovery [https://seekingalpha.com/article/4798220-lynas-rare-earths-stock-still-bullish-on-ree-price-recovery]
* Lynas Rare Earths Has Likely Bottomed Out (Rating Upgrade) [https://seekingalpha.com/article/4778084-lynas-rare-earths-has-likely-bottomed-out]