www.lynascorp.com
Lynas Corporation Limited's (ASX: LYC) vision is to be a global leader in Rare Earths for a sustainable future; a vision realised by the passion and practices of our people.
Lynas is an ASX listed company, with the strategy to create a reliable, fully integrated source of Rare Earths supply from mine through to customers, and to become the benchmark for security of supply and environmental standards in the global Rare Earths industry.
Lynas owns the richest deposit of Rare Earths in the world at Mount Weld, Western Australia. Project development has commenced, with the first mining campaign completed and two processing plants underway. All necessary approvals required for project development have been received, the project is funded and production will commence in 2011.
Lynas Corporation updates baseline capital costs for Rare Earths Project
Sydney-based Lynas Corporation (ASX: LYC) has moved a number of steps closer to the first concentrate feed to the kiln in Malaysia in the third quarter of 2011, for its Rare Earths Project - by arriving at a baseline capital cost estimate and schedule.
Lynas owns the richest known deposit of Rare Earths, also known as Lanthanides, in the world at Mount Weld, near Laverton in Western Australia.
Since the restart of its rare earths project in November 2009, the company has worked with United Group to confirm costings for the project.
Estimated capital cost to complete Phase 1 of the concentration plant in Western Australia and the advanced materials plant in Malaysia is A$339 million (previously A$302.7 million).
The major variation is due to a significantly higher Engineering, Procurement and Construction Management fee than in the previous estimate (previously A$100m which has increased to A$136.4).
Since the restart of the Lynas Rare Earths Project in November 2009, after a nine month suspension, a major focus of the company has been to review, and progress where necessary, the project engineering with United Group (UGL) to reach a point where the Company could confirm a revised baseline capital cost estimate and schedule.
This work has now been completed by the UGL – Lynas Alliance Team. The estimated capital cost to complete Phase 1 of both the Concentration Plant in Western Australia and the Advanced Materials Plant in Malaysia is A$339.19 million.
The increase in the EPCM fee has resulted from a necessary revision of all engineering estimates, the undertaking of significant value engineering to keep original plant capital costs within previous projections, and a revision of construction management costs for the Advanced Material Plant in Malaysia.
Mobilization to site in Western Australia occurred in April 2010. Importantly, the target date of First Ore Feed in December 2010 also remains on track as previously announced.
Mobilization to site in Malaysia is scheduled to commence this month. The first construction contractors to mobilize to site will advance the civil works package by commencement of pile capping in preparation for concrete pouring. A detailed review of the schedule anticipates first concentrate feed to the kiln early in the third quarter of 2011 (previously Q2 2011).
Estimated operating costs during the period of construction have been reduced significantly since the previous estimate. In Western Australia, the majority of the decrease is due to a reduction of work shifts at the Concentration Plant until the Advanced Materials Plant in Malaysia is fully commissioned. It has also been possible to reduce working capital in Malaysia and the Corporate
Office.
As at 31 March 2010 the forecast total cash requirements to start of production of Phase 1 of the Lynas Rare Earths project is A$407.32 million. Total cash at bank as at 31 March 2010 was approximately A$417million.
Dependent on the final capital costs, use of the contingency facility included within the capital estimate, and the revenue generated during the commissioning and ramp-up of the Advanced Materials Plant there may be a potential requirement for a working capital facility in the amount of approximately A$25million during ramp-up of the plant.
