Shares in Lynas Rare Earths hit a near 9-year high as its promising future took a more defined shape and revenue for the year to June 30 surged to record levels.
The miner’s shares leapt more than 10% higher to $7.12 – its best since 2012 – after reporting record quarterly revenue on the back of strong ore prices.
The shares were a standout on Monday closing at $7.105, up 10.5% in a wider market that weakened to finish just in the red on Monday.
The company, which has a rare earth mine in Western Australia and processing plant in Malaysia, reported record sales revenue of $185.9 million for the June quarter.
That was almost four times the $38 million reported for the June quarter last year and took revenue for 2020-21 to more than half a billion dollars for the first time.
Lynas said revenue of $502 million was up 60% from 2019-20’s $314.1 million.
In fact, revenue topped $100 million in each of the three quarters of the year to June as sales growth accelerated from the slowdown in the middle of 2020’s Covid pandemic.
The surge came despite more COVID-related production headaches in the three months to June 30 in Malaysia in the June quarter as the national government limited movement to try and control a series of severe virus outbreaks.
“This result reflected sustained demand for Lynas Neodymium and Praseodymium (NdPr) products and strong market pricing, as end users and governments around the world continue to recognise the need for a diversified supply of responsible rare earth materials,” said Lynas CEO Amanda Lacaze.
The company said the average selling price for its rare earths was $39.10 for the quarter, up from $35.50 for the March quarter and nearly double the prices from the June, 2020 quarter.
Total rare earth ore production dropped to 3,778 tonnes but NdPr production improved slightly from the prior quarter to 1,393 tonnes.
“This is an excellent result given continuing challenges presented by the ongoing pandemic, particularly in Malaysia,” the company said in its ASX filing.
Lynas faced COVID movement restrictions in Malaysia which limited the company to having 40% of its workforce on site at any one time. It also faced water shortages at one stage.
The company said it is progressing with its processing in plans in Western Australia and the US and last week was given a $14.8 million grant by the Australian government for its processing project in Western Australia.
Demand for rare earth materials such as neodymium and praseodymium (NdPr) has rebounded from a pandemic-driven drop last year as demand for electric vehicles accelerates amid a global push to reduce carbon emissions. NdPr is also used in magnets for wind farms, smartphones, and military equipment.
“Demand for Lynas products, in particular for our NdPr product family, continued to be very strong through the quarter, leading to record sales and cash collection,” Ms Lacaze said.
Lacaze said a drop in prices during the quarter was due to a “normal correction after the sharp and speculative increases seen in the previous months” and added that prices had strengthened again in July.
Lynas also revealed it had identified a second potential site in Malaysia to build a low-level radioactive waste disposal facility amid ongoing delays for clearance of an earlier site identified by the Pahang state government.
Lynas said it had a closing cash balance at June 30 of nearly $681million, up from $568.5 million at March 31.
