* Plant delay seen depleting Lynas cash reserve
* Court decision due Nov. 8 on whether to review licence
* Company likely to need to sell new shares - broker
* Shares slump to six-week low
(Adds broker comment, details)
MELBOURNE, Oct 11 (Reuters) - Shares in Lynas Corp Ltd
plunged 19 percent on Thursday as it faced anotherdelay in opening its rare earths plant in Malaysia, raising theprospect the company may need to shore up its funding with ashare sale.
A Malaysian court extended a hold on the Australiancompany's operating license to Nov. 8 on Wednesday while itdecides whether to consider a review aimed at permanentlyblocking production at the $800 million plant in Kuantan, on thecountry's east coast.
Lynas received the temporary operating licence in Septemberfor the rare earths plant, the biggest outside China. It hadaimed to start production this month, processing material fromits Mt Weld mine in Western Australia, but said on Wednesdaythat would be delayed and gave no new timetable for the opening.
Its shares fell to a six-week low of A$0.69 in early tradeand last traded down 16 percent at A$0.72, reflecting worriesthat the company will need to raise equity to shore up its fundsthe longer the delay runs.
"Given the current delays, we believe the core tenet for ourargument to sell Lynas is still applicable -- namely riskssurrounding funding, dilution, commission and waste disposalsolution," Foster Stockbroking said in a note to clients onThursday.
Foster estimated the company, which had A$124 million ($127million) in unrestricted cash as of June 30, would have onlyA$20 million in working capital available if the plant startsoperating in November, and said it would probably need to raisefunds through a sale of new shares.
Lynas had A$205 million in total cash at June 30, but A$81million of this can only be used for a future expansion of theplant.
Activists linked to the environmental group Save MalaysiaStop Lynas want the court to suspend the licence until twojudicial review cases challenging the government's decisionallowing the plant to operate are heard.
Lynas had hoped to open the plant a year ago, but has beendelayed by community protests.
The company says that its plant is safe and is notcomparable to a rare-earths plant in Malaysia that was shut by aunit of Mitsubishi Chemicals in 1992, after residents thereblamed the plant for birth defects and a high rate of leukemiacases.
($1 = 0.9759 Australian dollars)
(Reporting by Sonali Paul; Editing by Richard Pullin)
((Sonali.Paul@thomsonreuters.com)(+61 3 9286 1419)(ReutersMessaging: sonali.paul.thomsonreuters.com@reuters.net))
Keywords: LYNAS SHARES/