Rare earths producer Lynas Corporation Limited (ASX: LYC) saw its shares soar 17.7% today to close at 20 cents.
By comparison, the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) gained 0.6%.
It marks the third day in a row of gains, and Lynas shares are now up 52% since Thursday, 17 July. It appears that investors have turned positive on the company, with BBY analyst Mike Harrowell telling Fairfax media that the company had now passed the point by which it would be required to disclose if it was at risk of missing June quarter production guidance, ahead of a formal update in the Quarterly Activities Report due to be released on July 31.
Mr Harrowell said, "If Lynas does meet production guidance, it will mark an important milestone in the Malaysian processing plant achieving profitability". There's still a long way to go for that though.
In the company last update, it said it had removed some bottlenecks which were affecting production, and was working on delivering the optimal balance of volume, finished product quality and REO yield.
But rare earth oxide prices are still well off their highs in 2012, and are around Lynas's estimated cost of production. Factor in US$440 million of debt, and shareholders may have to wait some time before they see Lynas profitable. Having raised capital in May, another one could be on the cards in the near future.
