Lynas (LYC AU) Targets Vertical Expansion

• Last week, rare-earth play Lynas Corp Ltd (LYC AU) squared away a fully underwritten A$750mn placement (56.6mn shares, 6.1% of shares outstanding) at A$13.25/share, a 10% discount to last close.

• Gina Rinehart, Lynas' second largest shareholders with ~8.2%, took up her compliment.

• Placement proceeds will be applied to streamlining ops, expanding its stockpiles/capacity, and investing downstream into magnet makers.

The NEW News

• On the 29th August, Lynas announced it had successfully completed its $750mn placement of 56.6mn shares (~6.1% of shares outstanding) at A$13.25/share, a 10% discount to the last traded price of A$14.73/share on the 27th August.

  • Proceeds will be used to "help accelerate growth", with two key strategies:

Harvest – Optimise performance from the Lynas 2025 capital investments to deliver returns for shareholders, including ramping up assets in line with customer demand and market growth; and
Grow – Grow the business by: a. Adding Resource and Scale; b. Increasing Downstream Capacity; and c. Expanding into the outside China metal and magnet supply chain

• Concurrent with the placement, Lynas also posted A$8mn in net income for FY25, below the A$23.5mn analyst consensus, and down from A$84.5mn last year, on account of production issues and expansion costs. Revenue increased 20% to A$556mn.