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Highlights

  • LYC shares gained on Wednesday (21 June 2023) after the company informed that it received an AUD 20 million grant from the Australian Government
  • The grant will partially fund the Apatite Leach Circuit, which will be established at Lynas' Mt Weld site near Laverton, Western Australia.
  • LYC shares have witnessed a decline of around 7.59% in the last 6 months

Lynas Rare Earths Ltd (ASX: LYC) shares gained on Wednesday (21 June 2023) after the company informed that it received an AUD 20 million grant from the Australian Government as part of its Modern Manufacturing Initiative – Manufacturing Integration Stream. Following this announcement, LYC shares rose 1.64% to end at AUD 7.430 apiece. The company said this grant will contribute to developing a new facility that can process apatite-rich ores from the Mt Weld ore body through a newly-developed process containing two circuits for removing apatite.

The grant will partially fund the Apatite Leach Circuit, which will be established at Lynas' Mt Weld site near Laverton, Western Australia.

Today's gains in LYC shares have partially offset the losses that the stock witnessed over the last one week on concerns production would be impacted when the company switched to its new processing plant in Kalgoorlie.

On Monday, the company said in an announcement that the fourth stage of commissioning at its new Kalgoorlie Rare Earths Processing Facility began in June. In this last phase, chemical and wet circuits, including neutralisation, filtration and carbonation circuits, will be fed with rare earth carbonate from Lynas Malaysia, which will allow the completion of stage four commissioning of those circuits.

However, the company is facing some challenges with this final stage. As per the announcement, although the stage four process commissioning is largely on track, two critical path items--the waste gas treatment plant and on-site gas supply--are holding things up.

Because of these issues, the first production of Mixed Rare Earth Carbonate (MREC) from the Kalgoorlie Facility can not be expected before August 2023.

However, from a long-term perspective, given the significant potential that rare earth compounds hold for transforming various industries such as renewable energy, LYC stock is worth keeping an eye on. Let's scan through its past financials to understand how the company has performed.

LYC Financial Performance

For 1HFY23 ending 31 December 2022, LYC reported a net profit of AUD 150.10 million on revenues of AUD 370 million. While its 1HFY23 revenue grew by 17.5% annually, its net profit witnessed a decline of 4.3% year-on-year. The revenue growth was supported by continued growth in demand. But production-related challenges due to water supply and a significant increase in cost for chemical inputs weighed on its profitability. Here is a look at its past financials:

LYC’s Stock Price Performance

LYC shares have witnessed a decline of around 7.59% in last six months, and over the last one year, it has plunged by 15%. The stock has a 52-week low and 52-week high of AUD 6.020 and AUD 10.300, respectively and is currently trading lower than the 52-week high-low average.

LYC Daily Technical Chart, Source: REFINITIV 

Note 1: Past performance is neither an Indicator nor a guarantee of future performance. 

Note 2: The reference date for all price data, currency, is 21 June 2023. The reference data in this report has been partly sourced from REFINITIV.