Seeking Alpha: Lynas Can't Afford Further Delays

I thought Lynas (OTCQX:LYSDY) looked like an interesting, albeit very risky, mining story back in December of 2013 ("Weak Prices Have Lynas Fighting An Undertow"). While the shares did participate a bit in the early 2014 run in mining companies, it didn't last and one of my biggest concerns (further issues ramping up the processing facility) seems to be coming home to roost.

Although management believes it could reach a 11ktpa production run-rate (a level where cash flow breakeven seems probable) in June of 2014, this is a company that has built a reputation for missing deadlines and coming in short of their own goals. What's more, the shortfalls in ramping up production have created the need for additional funding, as cash on hand won't be enough to keep up with annual costs and a debt repayment due in September. These shares may still offer a rich reward given the potential or theoretical net asset value, but funding terms are not going to be generous and it is hard to ignore the ongoing declines in near-term EBITDA expectations.

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Lynas Can't Afford Further Delays