Shares in Lynas Corporation Limited (ASX: LYC) have fallen over 8% in afternoon trading. This performance is despite the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) rising strongly to be up over 1%, bolstered by strong rises in other miners including BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO).
In my opinion, an air of desperation surrounds the company, despite only two months ago raising $40 million via a combined share purchase plan and top-up placement. These funds provided short-term liquidity to rectify the cash outflow revealed in the March quarter, which left only $23 million in the bank.
Today's announcement
The company issued an operational improvement plan with the aim of raising operational efficiency and reducing overall costs. Some of the initiatives are as follows:
1. Relocating the head office from Sydney to Kuala Lumpur.
2. Reducing workforce numbers (mostly by reducing contractor positions).
3. Renegotiating supplier contracts.
4. Improving asset allocation.
Looking at the positives, Chief Executive Amanda Lacaze said: "We are pleased to report that demand for Rare Earth Oxide (REO) products remains buoyant and the company has achieved further increases in production and sales of REO products during the June 2014 quarter".
Shareholders will be holding their collective breath for the June 2014 Quarterly Activities report, to be released on 31 July 2014, for further updates on cash-burn and signs of operational improvements.
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