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Table Of Contents

Executive Summary
NPV valuation of $0.91
Stress testing our base case valuation
Our earnings forecasts
Consensus forecasts
Driver #1: Integrated rare earths project
Mt Weld rare earths deposit
Reserves and resources
Brief history of Mt Weld
Mt Weld Concentration Plant
Completion of the concentration plant at Mt Weld
Project infrastructure in Western Australia
Malaysian Advanced Materials Plant
Brief history of Advanced Materials Plant
Current status of the Advanced Materials Plant
Project infrastructure in Malaysia
Customer offtake agreements
Project financing
Capital costs
Approvals process
J.P. Morgan view
Driver #2: Expansion of the integrated rare earths project
Phase 2 development
Potential for LYC to handle third-party mixed rare earths carbonate
Potential development of Malawi deposit
Driver #3: Expected strong demand growth
What are rare earths? What makes them attractive?
Application 1: Environmentally-friendly technologies
Application 2: New digital devices
Strong growth in rare earths expected to continue
Rare earths are un-substitutable in many applications
Driver #4: Tightening Chinese supply
Major deposits in China
Government restricting supply
Environmental concerns rising
Risk #1: Project delays and cost inflation
Valuation impact from project delays
Risk #2: Resource Super Profits Tax
Rationale for RSPT
Structure of RSPT
Where is the taxing point for LYC?
Sensitivity analysis
Risk #3: Supply response to high prices
Reopening old mines
Development of new mines
Capital constraints likely to be overcome…
…but new projects could take some time to come to market
Risk #4: Foreign exchange risk
Corporate appeal
Relatively open register…
…but regulatory decision makes a foreign takeover harder
Supply/demand outlook
Undersupply in Mt Weld’s main ores in CY10E
Undersupply persisting over the medium term
Rare earths prices
Scenario analysis for changes in price assumptions
Financial issues
Capex and start up costs for current projects
Gearing
Tax Rate
LYC management team
Nicholas Curtis, Executive Chairman
Gerry Taylor, Chief Financial Officer
Eric Noyrez, Chief Operating Officer
Matthew James, Corporate and Business Development
Mike Vaisey, Technical Development
John Croall, General Manager - WA
Mashal Ahmad, General Manager - Malaysia
Appendix
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LYS+JPM

LYS+JPM

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Published by jslovely

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Published by: jslovely on Nov 17, 2010
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11/07/2011

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