Troubled rare earth miner Lynas Corp faces a cash crisis at the end of the ­September quarter unless they find solutions to their significant funding, pricing and production problems.

Lynas on Thursday revealed ongoing operating inflows of $26.5 million and ongoing operating outflows of $49.5 million for the June 2014 quarter.

Accompanying the significant cash-flow negative result were quarterly rare-earth ore production figures of 1882 tonnes, a run-rate approximately 32 per cent lower than required in order to keep the company cash-flow neutral.

Lynas shares fell 17 per cent or 3.5¢ to 17¢ on Thursday.

Patersons’ head of research Rob Brierley has a sell recommendation on the stock and said the result reflects yet another quarter of under performance, particularly on the production side.

“They said they produced 708 tonnes of REO for the month of April, so there were some positive signs there," said Mr Brierley.

“But they only did 1882 tonnes for the whole of the quarter, so it suggests that May and June did worse than April."

Lynas completed a fully subscribed $40 million equity raising at the end of May.

Key to that raising were forecast run-rate production numbers, coming off the April actuals, that would get yearly production totals to 11,000 tonnes per year. The June quarterly run-rate puts annual production at just over 7500 tonnes, a long way shy of their proposed break-even point.

Rare-earth production of 11,000 tonnes per year, excluding any price change, will keep the company in a relatively cash-flow neutral position.

Deutsche analyst Chris Terry agrees that production and pricing are the key challenges but points to the new Malaysian production plant as the problem child.“The issue is a technical one, it’s a technical based process and the ramp-up of that plant in Malaysia to date has been problematic and quite sensitive," Mr Terry said.

“It’s quite a unique project and they haven’t got it into a steady state level at this stage. It’s not driven at the mine, it’s driven at the processing plant."

On top of their production woes Lynas is also facing debt obligation issues with a $35 million instalment due in the September quarter.

The cash-flow statement shows a closing cash balance of $38.1 million with no reference to any alternative funding arrangements.

Lynas has total debt of US$440 million, which is split between a debt facility of US$215 million and US$225 million in convertible notes. Both analysts agree the outlook for Lynas is, at best, risky, with Mr Brierley describing it as “all very scary at the moment".

Lynas was unavailable for comment.