Lynas Corp. Ltd. (LYSCF)

[Wild-bill]

"Notice of Extraordinary General Meeting & Explanatory Memorandum".

At any time that the continuation of this seems a waste of time, just let me know please.

Keep in mind that the issues that seem to be of concern, predominately, are the actual value of the tenement, apparent conflicts with prior documents and the basis upon which claims are made. I.e. what are the assertions made about the value of the assets based on and on what basis are the estimated development costs made.

From Notice of Extraordinary General Meeting & Explanatory Memorandum page 8:

Further testwork, engineering studies and feasibility studies would be required to establish the commercial viability of development. Any feasibility study would require significant capital investment and take approximately 3-4 years to complete.

Depending on the potential economic value of the Crown tenement - I'm not concerned with the Swan area - is there any compelling reason to believe at this time that the efforts mentioned should not be done to at least a preliminary level? It seems to me that with relatively minimal expenditures enough information could be gathered to allow a preliminary analysis and estimate of continued investigation costs and time frames. This should also yield enough information to estimate the potential value of the materials in the tenement and a preliminary extraction and processing design.

Without identification of an extraction process, capital and operating costs are difficult to estimate and cash flow models cannot be developed,

Exactly!

however Lynas believes that if an economic process is developed, development costs of a processing facility would be likely to exceed US$1 billion which would require the introduction of a partner to assist in the development of the project.

Circular logic? US$1 billion pulled out of thin air (in fairness, experience may support the number, but we have no way to assess the validity of the figure, which is important given the financial benefit to Nick and potential loss of benefit to shareholders if the deal is completed) and supported by no effort or expenditure of any kind. But this assertion is apparently the basis for foregoing “Further testwork, engineering studies and feasibility studies”. Normally the work that Lynas is planning to forgo would support the estimated cost, not the other way around.

Considering Lynas's own assessment gave a value of US$44.5 billion in JORC findings from 2007, and presuming that the value of those resources has at least not declined (and we could believe it has increased based on the general inflation seen in commodities across the board in terms of U.S. dollars), it seems that even the expenditure of US$1 billion, ~2.25% of the 2007 stated value, might be justified. And certainly the “Further testwork, engineering studies and feasibility studies” would be justified.


To save time, I'll get some convenient information from the Lynas Corp - Vote NO to Sale of Crown Deposit

Compare the following image from a Lynas publication to the current Mt. Weld basket components prices and see if there appears to be substantially more than $20/kg value. Does there appear to be more than … US$44.5 billion in the ground?

The Crown Polymetallic Resource has a Rare Earths distribution value of over $20/kg

Just using current (4/21/2011) prices posted on the Lynas website, and assuming I didn't make a math error, the value of the tonnes in the ground of only the first three listed REEs comes to US$55.893 billion. The total basket having matches on the Mt. Weld basket (no price shown for Yttrium) table comes to ~US$90.62 billion.

Please double check my math - lots of opportunity for a fat finger operation there.

In summary, whether or not Crown is part of Lynas's core holdings, the sale of an asset (now under?)valued by Lynas JORC findings at US$44.5 billion for US$20.7 million to avoid an expenditure for the the “Further testwork, engineering studies and feasibility studies” seems to give short shrift to the shareholders. Even considering the 2.25% of the old estimated value for full development, any kind of valuation methodology should indicate the resource is worth development by Lynas and/or a much higher price.

If the true value of the in-ground resource is closer to US$90 billion, the US$1 billion drops to 1.125% for development of the facility.

What business would not invest 1.125% of the returned value to develop such a resource?

The shareholders deserve a more detailed explanation of why this sale is of such great benefit to the shareholders.

Preemptive: I've not yet reached the stage of considering the received shares, off-take agreement, right of first refusal, … All things in their time. Nor have I yet touched upon the "expert" that works for a recently renamed firm that ... are you ready? Has a relationship to Nick?

At any time that the continuation of this seems a waste of time, just let me know please.

Bill