Experts still confident Lynas will deliver

Normal
0

false
false
false

MicrosoftInternetExplorer4

st1:*{behavior:url(#ieooui) }

/* Style Definitions */
table.MsoNormalTable
{mso-style-name:”Table Normal”;
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-parent:””;
mso-padding-alt:0cm 5.4pt 0cm 5.4pt;
mso-para-margin:0cm;
mso-para-margin-bottom:.0001pt;
mso-pagination:widow-orphan;
font-size:10.0pt;
font-family:”Times New Roman”;
mso-ansi-language:#0400;
mso-fareast-language:#0400;
mso-bidi-language:#0400;}

Deutsche Bank analyst Levi Spry says he is sticking to his “buy” recommendation for Lynas Corporation despite its troubles in Malaysia.

Last week Lynas announced delays in the construction of the Lynas Advanced Materials Plant and said it was unlikely first feed to kiln would occur until early next year.

But Spry said the nature of the plant meant investors should have expected some minor hiccups.

“Given the project complexity, further hold-ups are not unexpected,” he said.

Spry said delays in obtaining an operating permit for the plant had also pushed out his 2012 and 2013 production forecasts.

Lynas said last week its Mount Weld concentration plant was performing ahead of expectations and its Malaysia plant construction was 78 per cent complete at the end of the quarter.

Lynas stocks continue to be volatile in the short-term as the company faces significant public opposition to its Malaysia operations.

It’s share price plunged in late October following a statement by the Malaysian Government that the company had not been given permission to import ore.

But the statement was made in response to earlier incorrect claims Lynas would be shipping ore by the end of October.

The company later slammed the rumours of October shipping as “factually wrong”.

Deutsche Bank said the only future problems for Lynas would be risks production delays could see the company’s funds tighten up around December 2012.

It said if the risk materialised it would have implications for the company’s planned $264 million stage II expansion.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.