The pink sheets-traded shares of Lynas went crazy briefly this morning with a surge of optimism that they’ve got good financing-related news to report.
Lynas is the rare earth miner in Australia that has a big project just barely underway — but they need a lot of money to move it forward, and to build their processing plant. They halted operations a while back because financing wasn’t forthcoming, and investors (myself included) have been wondering just what a rare earths mine is worth in a slowing economy … and whether they’ll be able to raise the money they need.
It seems news is on the verge of coming out — trading was halted on Wednesday in Australia, and will remain halted until the news is announced, or until Friday (whichever comes first, I guess). Pink sheets traders in the US are apparently not halted, and at least one person is pretty optimistic and bid the price up close to 70% today.
As a minor shareholder (I sold a portion of my holdings a while back, but still hold a little bit), I hope it’s good news and that they’ll get the money they need, at reasonable terms — rare earth elements should continue to be in high demand as technology advances (they’re key to things as diverse as missile guidance and advanced batteries), and if things pick up there’s some potential that Lynas, with a fair amount of mining already done and a stockpile of ore to process, could leverage any possible return of positive sentiment. The financing might come at a steep price, and they could also always sell equity or sell the entire company, who knows.
No secret knowledge of what will be announced, but I’ll be watching …