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LYNAS CORPORATION LIMITED

ASX: LYC

The data on Australian Shares.com is intended as a guide only and is compiled from information in the public domain. Data on this website should not be used to make an investment or trading decision.

Description

Lynas Corporation Ltd is an ASX 100 listed company, with the strategy to create a reliable, fully integrated source of Rare Earths from mine through to market, and to become the benchmark for the security of supply and environmental standards in the global Rare Earths industry.

The foundation of this strategy is Mount Weld in Western Australia, the richest known deposit of Rare Earths in the world, and a state-of-the-art Rare Earths processing plant, the Lynas Advanced Materials Plant (LAMP), currently under construction near Kuantan in Pahang, Malaysia. Production is scheduled for third quarter of 2011.

Lynas is set to provide the first new source of supply of Rare Earths outside of China when it comes into production in the third quarter of 2011. We believe this timeframe puts us well ahead of our competitors. Our customers’ requirements and commitments are driving the business development strategy for products to be produced, growth of production and collaboration with partners in the value chain.

Mount Weld Rare Earths roject

Substantial work has been carried out in estimating the Rare Earths resources at Mount Weld, including a thorough validation of all geological, drilling and assay information, the development of a robust 3D geological model and the generation of a detailed resource model to JORC Code standards.

Rare Earths Mineral Resources at Mount Weld; Total Resource of 1.416 million tonnes REO

At a 2.5% REO cut-off grade, the total rare earth mineral resource estimate is as follows:

Measured: 7,200,000t, 9.8% REO, 9.7% TLnO, 1770ppm Y203
Indicated: 5,000,000t, 5.3% REO, 5.1% TLnO, 2020ppm Y203
Inferred: 5,290,000t, 8.3% REO, 8.2% TLnO, 1210ppm Y203
Total: 17,490,000t, 8.1% REO, 7.% TLnO, 1680pm Y203

Independent mining experts Australian Mine Design and Development Pty Ltd (AMDAD) prepared preliminary pit optimisations, pit designs and mine schedules over the central part of the CLD. The work confirmed the simplicity and low risk of a mining operation, and the low overall strip ratio for the pit (SR 4.6:1). Due to the high ore grades, the ore production level is forecast to be relatively small. For example, production of 11,000 tonnes REO in the first year of operation will require 121,000 tonnes of ore to be processed. Based on proposed ore treatment options, current reserves were calculated by AMDAD in 2003 as 2.1 million tonnes @ 15.5% REO containing 321,000 tonnes REO. Lynas confidently expects that further metallurgical test work and inclusion of lower grade ore will result in a mine life in excess of 20 years.

Lynas Corporation Ltd is an ASX 100 listed company, with the strategy to create a reliable, fully integrated source of Rare Earths from mine through to market, and to become the benchmark for the security of supply and environmental standards in the global Rare Earths industry.

The foundation of this strategy is Mount Weld in Western Australia, the richest known deposit of Rare Earths in the world, and a state-of-the-art Rare Earths processing plant, the Lynas Advanced Materials Plant (LAMP), currently under construction near Kuantan in Pahang, Malaysia. Production is scheduled for third quarter of 2011.

Lynas is set to provide the first new source of supply of Rare Earths outside of China when it comes into production in the third quarter of 2011. We believe this timeframe puts us well ahead of our competitors. Our customers’ requirements and commitments are driving the business development strategy for products to be produced, growth of production and collaboration with partners in the value chain.

CONCENTRAION PLANT

The Concentration Plant is due to be commissioned in February 2011. The first feed to kiln of Mount Weld concentrate at the Lynas Advanced Materials Plant (LAMP) in Malaysia remains on schedule.

Engineering & Construction

The focus of the third quarter was completion of civil works, erection of structural steel and commencement of the installation of services, buildings and equipment. There was a delay in the arrival of flotation cells and the team is currently working to ensure that these delays have minimal impact on the overall Mount Weld schedule. Lynas can confirm these delays will have no impact to the first feed to kilns date in Malaysia. The remaining works are on schedule. These include the diesel generation power house, water reverse osmosis plant, concentrate thickening and filtration plant, along with the reagent and concentrate handling facilities. Progress of the Tails Storage Facility (TSF) and Evaporation Pond (EP) earthworks also remain within the scheduled plan. During the quarter, the onsite labour force increased from 52 to 88, in line with the increased construction activity at Mount Weld. The site has remained lost-time-injury free.

Operations

During the third quarter, the number of permanent operations staff increased from 18 to 22. Recruitment of operations staff remains on plan, with continued good response to advertised opportunities, despite the tightening conditions in the West Australian labour market. Good progress has been made in our staff training and readiness to operate the plant, with all Ready For Start-Up (RFSU) activities tracking well against schedule. Detailed planning for plant commissioning and start up has also now occurred. A site visit was undertaken by crushing contractors who tendered for the work of crushing the first 12 months of ore feed. The selected contractor is expected to commence crushing operations at Mount Weld during the fourth quarter.

LYNAS ADVANCED MATERIALS PLANT

The Lynas Advanced Materials Plant (LAMP) remains on track for first production of Rare Earths in the third quarter of 2011.

Engineering & Procurement

Engineering progressed during the third quarter and the LampsOn alliance team between UGL and Lynas reported engineering as 95% completed and is scheduled to be fully completed during the fourth quarter. The two key focus areas that remain in engineering are:

1. Expediting the structural steelwork drawing to the shop detailing and fabrication processes.
2. Expediting the procurement of the piping bulk materials through to delivery on site.

Contracting and procurement activities are in full swing with tenders being called for the main construction contracts and outstanding equipment supply. The focus of remaining procurement is on bulk materials for piping, valves, telecommunications and security packages. Preassembly of the kilns has commenced in a fabrication yard close to site and the process of awarding the mechanical and structural steel installation packages has commenced. The contracting strategy on site has been refined to increase the ability to influence and manage a larger number of smaller contractors, which will allow the project to optimise the delivery schedule.

Construction

Multiple work fronts are currently open and progressing on site. Significant progress was made in pile cutting with 100% of piles cut. The main activity continues to be installation of concrete and steel bar reinforcement. In addition, the process water pond has been built and the contractor for the Gas Treatment has mobilised and commenced installation during the third quarter. Site manning exceeded 700 people during the month of September and site man hours have almost doubled over the last two months.

Malaysia Operations

The Ready For Start-Up (RFSU) projects continued to be the main focus in the third quarter, with the overall completion of the RFSU programme at the end of September 2010 standing at 55%, ahead of schedule. These RFSU projects include:

• Commissioning Plan & Schedule
• Commissioning Procedure
• Functional Description Review
• Pre-loading Plan & activities
• Standard Operating Procedures
• Production Training Material Development
• Control System Graphics Development
• Manual Valve Numbering
• Job Safety Analysis

Work has commenced on the Water Treatment Plant (WTP), and as announced last quarter, the contract was awarded to Ranhill Water Technologies Sdn Bhd (RWT). The WTP is on schedule to complete in time for start-up operations. RWT will operate and maintain the WTP on behalf of Lynas.

The development of Synthetic Material Products progressed in the third quarter. Samples of synthetic gypsum produced from the desulphurisation of the flue gases in the LAMP and magnesium-rich synthetic gypsum produced from the neutralisation of acid in the LAMP have been prepared by University Malaysia Pahang (UMP). Potential customers have been provided with these samples for analysis. A sample of the iron phosphogypsum produced from the leached Rare Earths concentrate is currently under preparation and due for delivery in the fourth quarter.

Mine For

rare earths, niobium, tantalum, zirconium, titanium

Location of operation(s)

Western Australia

Address

Level 7, 56 Pitt St
SYDNEY, NSW, AUSTRALIA

Phone

(61 2) 8259 7100

Email

Website


Last Updated

17/1/2010

 

The data on Australian Shares.com is intended as a guide only and is provided purely as an indication of what information can be found through official announcements. Data on this website should not be used to make an investment or trading decision. All information should be carefully cross-checked against official sources for accuracy. The publisher (Intaanetto Pty Ltd) will not be held liable for any loss arising from the use of this website.

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