Lynas Corporation (ASX:LYC, OTC:LYSDY) has completed a A$150 million institutional placement.
A total of A$60 million has been committed by institutional investors through the placement of 80 million ordinary Lynas shares at A$0.75 per share under the unconditional first tranche of the Institutional Placement.
A further A$90 million has been committed by institutional investors through the proposed placement of 120 million ordinary Lynas shares, also at A$0.75 per share under the second tranche of the Institutional Placement.
Settlement and issue of the second tranche is subject to shareholder.
The A$150 million institutional placement is part of a A$200 million capital raising program, which also includes a Share Purchase Plan offering up to an extra $15,000 worth of shares to existing shareholders to raise a maximum of $50 million. J.P. Morgan is underwriting $25 million of this.
Lynas said that following the Institutional Placement and SPP, the company anticipates having sufficient working capital through to positive cash flow, along with sufficient funds to meet capital expenditure requirements and a cash buffer to allow for unforeseen events.
Lynas key investment highlights
High quality, long life assets: CLD reserves of 9.7Mt at 11.7% REO with expected mine life of >25 years, highest grade Rare Earth known orebody in the world
Strategic location of the LAMP: Access to an established supplier and manufacturer network and a skilled and competitive labour force; Excellent infrastructure, including chemical, water, electricity and gas supplies; and close proximity to the Kuantan deep water and all weather port
Strong market position: Strategic importance as one of the few non-Chinese producers in the market; phase 1 production capacity of 11,000tpa separated REO products which is equivalent to about 10% of global supply in 2012 (source: IMCOA).
Near-term cash flows: >700,000 tonnes of ore stockpile at the CLD and 14,365 dry tonnes of concentrate containing 5,225 tonnes of REO were bagged ready for export; Mt. Weld Concentration Plant in operation since May 2011; phase 1 LAMP construction complete and ready for first feed to kiln, with Phase 2 well underway and is on time and on budget for construction completion in early 2013.
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