Here's why Lynas Corporation Limited shares popped 7.3% today

Shareholders of Lynas Corporation Limited (ASX:LYC) can breathe a sigh of relief, but is the stock a buy?

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Shares of embattled rare earths miner Lynas Corporation Limited (ASX: LYC) have soared by 7.3% today to be trading at 5.9 cents after peaking at 6.2 cents earlier on. The strong rebound in price came on the back of an encouraging operating update provided by the company.

So What: Today's jump comes as a huge relief for shareholders of the miner, who have watched their shares decline by a massive 83.2% over the last 12 months. In an attempt to cool the market's pessimism surrounding the rare earths industry, Lynas reaffirmed its guidance for the quarter and confirmed there is no variation of estimates which were lodged with the ASX on 14 October 2014.

That quarterly report showed an increase in production volumes and sales revenues, together with a decrease in production costs compared to the previous quarter.

The company's CEO and Managing Director Amanda Lacaze said: "I am happy to confirm the direction that we provided in our recent quarterly report… Having received the full $83 million (less costs) from the recent equity raising, we are looking confidently to the future." A further update on production is expected at the company's AGM later this month.

Now What: Today's update has clearly helped to improve overall investor confidence in the business, however, investors should not jump in lightly. Lynas remains a highly speculative buy with a declining cash balance and heavy debts. It's certainly not one that will tempt me.

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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