Lynas Corporation is raising $425 million to build its proposed rare earths processing facility in Kalgoorlie, while also disclosing an annual loss of $19.3 million.
Lynas Corporation is raising $425 million to build its proposed rare earths processing facility in Kalgoorlie, while also disclosing an annual loss of $19.3 million.
The Malaysia-based miner, which currently exports rare earth concentrate to its overseas processing plant, is planning to build a $500 million facility to locally process rare earth concentrate produced from its Mt Weld mine in the Goldfields.
Lynas recently began work on the Kalgoorlie plant, having contracted Metso Outotec – a Metso Minerals and Outotec merger – last month to supply the plant’s 100-metre long, 1,500-tonne kiln.
Lynas said it would be the largest piece of equipment required for the project.
Managing director Amanda Lacaze said the proposed facility had received strong support from the City of Kalgoorlie-Boulder, as well as from the state and federal governments.
She also said COVID-19 had highlighted the need for resilient and diversified supply chains.
“Lynas is ideally placed to meet this need as we are a proven and profitable operation and the only significant producer of separated rare earths outside of China,” Ms Lacaze said.
Lynas will issue around 92 million shares under a placement to raise $211.6 million, as well as 92.9 million shares under a one-for-7.7 rights issue to raise $213.7 million.
The offer is being jointly managed by Canaccord Genuity and Merrill Lynch, which are also acting as underwriters and bookrunners. Ord Minnett is acting as co-lead manager to the offer.
It comes as Lynas reported a $19.3 million annual loss for the 2020 financial year.
Ms Lacaze attributed the loss to lower market prices and a six-week shutdown of Lynas's Malaysian processing plant due to COVID-19, along with a production halt in December when Lynas reached its concentrate processing limit for the calendar year.
“While this was disappointing, we have built a resilient business and despite the lower market pricing, our performance in quarters not affected by the production halts remained strong,” she said.
Lynas reported revenue of $305.1 million in FY20, down from $363.5 million on the prior year, and underlying earnings of $59.8 million, down from $100.7 million.
Its closing cash balance was $101.7 million, up from $89.7 million in FY19.
The company entered into a trading halt ahead of today’s announcement, and expects to resume normal trading on Wednesday.
