FIRB extends Lynas $252m review period

Lynas Corporation says finalisation of a $252 million investment deal with a Chinese business has been pushed back after the Foreign Investment Review Board extended its review period.

In early May, Lynas announced that China Nonferrous Metal Mining (Group) Co (CNMC) will acquire a 51.6 per cent interest by subscribing to 700 million Lynas shares at 36 cents, raising $252 million.

CNMC also agreed to provide a corporate guarantee for Lynas to a Chinese bank for a loan of $US184 million $A218 million).

Lynas will use the funds to bring its Mt Weld rare earths project near Laverton back online after suspending operations earlier this year due to a dispute with bond holders.

The binding heads of agreement with CNMC is subject to regulatory and shareholder approvals.

Yesterday, Lynas said the FIRB had not yet made a decision concerning the CNMC transaction and therefore the 30 day review period is now due to expire early next month.

"There has been no change to the agreed terms of the CNMC transaction," Lynas said.

"Both parties remain committed to the CNMC transaction."

Lynas added that it has sufficient cash to cover its cash flow requirements until mid-October this year.

The company is also in advanced talks over a contingency structure to cover its cash flow requirements.

"Such a contingency structure would only be needed to cover Lynas' cash flow requirements if there is a further delay in the transaction timetable," it said.

Shares in Lynas dipped 0.5 cents to 43c at 11:40 AEST.