UPDATE 1.30pm: Shares in rare earths miner and processor Lynas Corporation slumped after it warned it would need a cash injection in the next 12 months to remain viable.
The company made the announcement as it unveiled a $51.8 million loss for the half year to the end of December, $3 million worse than the loss registered in the previous corresponding period.
Lynas spent the six month to the end of December focused on the ramp-up of its rare earths processing plant in Malaysia and its rare earths mining operation at Mt Weld near Laverton.
The company had planned to start production at its Malaysian plant in 2011 when rare earth prices were booming but fierce opposition from local villagers and court battles caused major delays.
Costs associated with the ramp-up of the plant in January has weighed on the company's result with non-cash depreciation and amortisation charges in the half year rising by $8.5 million.
The company said it would need either to raise more cash through an equity issue, take on more debt or restructure its existing debt facilities in the next year.
"The directors and management have assessed each of the alternatives and are in discussions with established financial industry participants regarding each of the alternatives," the company said.
While admitting a level of uncertainty, the company said its directors had reasonable grounds to believe that additional funding could be secured in a timely manner when required.
Lynas said cash and cash equivalents at December 31 comprised $67.2 million of unrestricted cash and $7.5 million of restricted cash, down from $125.7 million and $15.7 million at June 30.
The company said it had completed construction of phase 2 of its processing plant in Malaysia during the six-month period, which would allow it to use its cash reserves to make semi-annual interest payments on its debt facility.
"The directors and management are confident that the group will achieve the target run rate of 11,000tpa rare earth oxide from phase 1 during the June quarter."
Lynas shares closed down 2.5 cents, or 8.48 per cent, at 27 cents after falling to a five-year low of 24.5 cents in earlier trade.