Lynas setbacks in WA and Malaysia

Lynas Corporation has responded to setbacks on two fronts by agreeing to issue an updated explanatory memorandum on its Forge Resources takeover offer and saying it welcomes a review of its proposed processing plant in Malaysia.

Lynas, which is developing a major rare earths project at Mt Weld in WA's Murchison region, has come under fire over the Forge Resources takeover because its managing director Nicholas Curtis is considered a related party.

In particular, the takeover would allow Mr Curtis to vest performance shares that would deliver an estimated $30 million profit.

The company said today it would issue an updated explanatory memorandum on the proposed Forge Resources transaction to address shareholder concerns.

It said an independent report had found the transaction to be fair and reasonable to the shareholders of Lynas not associated with Forge.

Lynas said the updated memorandum would be available by mid-May, and as a result the extraordinary general meeting concerning the Forge deal it had scheduled for 18 May would be delayed until mid-June.

Meanwhile, the company also said today it welcomed a one-month independent review of the health, safety, and environmental aspects of its rare earths processing facility currently under construction in Malaysia.

It said it was confident the review would have no impact on the anticipated completion date of the project and confirm that the plant was not a hazard to the environment, community, or its workers.

Lynas today announced the signing of a long-term agreement with "a major rare earths consumer" for the supply of Mount Weld Rare Earths from the processing plant in Malaysia.

The company said the contract was the conversion of a Letter of Intent signed in September 2008, and the contract price would be referenced to market prices at the time of delivery.