Molycorp Reports Third Quarter 2012 Results

FSC / Press Release 
Molycorp Reports Third Quarter 2012 Results 
HIGHLIGHTS: 
*Molycorp continues to ramp up Project Phoenix operations at its Mountain Pass,
California, facility, and it remains on schedule to achieve a Phase 1
operational rate of 19,050 metric tons (mt) per year in the fourth quarter of
2012. To date, 80% of Project Phoenix facilities are at Phase 1 or greater than
Phase 1 operational capabilities. 
* The Company reported revenue of $205.6 million in the third quarter of 2012, a
49% year-over-year increase and a 97% increase over the previous quarter. It
also generated positive operating cash flow in Q3 of $17.2 million. 
* The Company sold 4,391 mt of product across its business segments in the third
quarter of 2012, including: 2,768 mt of rare earth oxide equivalent products at
an average sales price of $43.45 per kilogram (kg); 1,527 mt of bonded magnet
powders and alloys at an average sales price of $48.98 per kg; and 96 mt of rare
metals at an average sales price of $269.22 per kg. 
* The Company reported a net loss of $0.19 per share, and a loss of $0.05 on an
adjusted non-GAAP earnings per share basis, taking into account operational
expansion items, out-of-ordinary business expenses, and certain non-cash items. 
Greenwood Village, CO US, November 08, 2012 /FSC/ - Molycorp, Inc (NYSE:
MCP)("Molycorp" or the "Company"), today announced financial and operating
results for the third quarter 2012. 
"Our production ramp up continues to build to Phase 1 levels at Mountain Pass,
and we remain on target for full Phase 1 operations in the fourth quarter," said
Mark Smith, President and Chief Executive Officer.  "As we execute our global
vertical integration plan, we will continue to see solid revenue from our
Molycorp Canada operations, and we will increasingly realize the benefits of
Project Phoenix and the ramping of our production volumes. This should result in
higher sales and gross margins, and both improved and sustainable bottom-line
performance, due to our low-cost production and our access to markets that
require high value, specialty-engineered materials." 
QUARTERLY RESULTS 
The Company reported consolidated net revenue of $205.6 million in the third
quarter of 2012, a 49% year-over-year increase and a 97% increase over the
previous quarter, during which the Company owned the former Neo Materials
(Molycorp Canada) for 19 days. 
In the third quarter, the Company sold 4,391 metric tons of product across its
business segments and realized a gross profit of $10.9 million, compared to
gross profit of $82.4 million during the third quarter of 2011. Gross profit
decreased from the prior year period as a result of significantly lower pricing
and increased production costs, offset by increased volumes. Gross profit during
the quarter also was negatively impacted by $33.0 million of out-of-ordinary
expenses, primarily related to purchase accounting adjustments related to the
Molycorp Canada acquisition and inventory write-downs. 
Molycorp's third quarter loss attributable to common stockholders was $18.9
million, or a loss of $0.19 per share. Earnings decreased substantially from the
prior year period as a result of lower selling prices and increased costs,
offset in part by increased volumes and tax recoveries related to the settling
of certain tax provisions. Adjusted loss per share of $0.05 reflects operational
expansion items, out-of-ordinary business expenses, and certain other non-cash
items. 
OUTLOOK 
"We are seeing customer demand beginning to stabilize," Smith said.  "We have
customer agreements in place, or are in advanced discussions and product
qualification efforts with customers, on sales in excess of our Phase 1
capacity.  In the Lanthanum and NdPr markets, we are seeing demand that will
move us into Phase 2 production relatively quickly.  With cerium, our
commercialization of SorbXTM products continues to gain traction in the
marketplace." 
"Several of our customers continue to work to deplete large volumes of
stockpiles.  We are seeing signs these customers are coming back into the
market, which is very positive going forward," Smith said. 
"With regard to global trends, output from China continues to be significantly
reduced," Smith added.  "Chinese government officials are stepping up their
efforts to enforce tougher environmental regulation and to curb illegal mining,
and these efforts are putting pressure on production.  In addition, a growing
number of China's largest producers have either halted operations or are in the
process of halting production, including Baotou Steel Rare-Earth, China
Minmetals, Chalco Rare Earth, and China Nonferrous Metals. Government and
industry leaders in China acknowledge that these and other actions are being
implemented for the express purpose of stabilizing or strengthening prices for
all rare earth products." 
The Company generated $17.2 million of operating cash flow during the quarter,
and had $436.0 million in cash and cash equivalents on hand at September 30,
2012. Molycorp's cash capital expenditures for Q3 were $240.8 million, and for
the fourth quarter the Company expects to incur cash capital expenditures of
approximately $180.0 million. 
CONFERENCE CALL TODAY AT 4:30 P.M. EASTERN 
Molycorp will conduct a conference call today to discuss these results at 4:30
p.m. EST, hosted by Mark Smith, Chief Executive Officer, and Michael Doolan,
Executive Vice President and Chief Financial Officer.  Investors interested in
participating in the live call from the U.S. should dial +1 (866) 783-2139 and
reference passcode number 62830722. Those calling from outside the U.S. should
dial +1 (857) 350-1598 and use the same confirmation number. 
There will also be a simultaneous live audio webcast available on the Investor
Relations section of the Company's website at www.molycorp.com/investors. The
webcast will be archived on the website. 
NON-GAAP ADJUSTED NET LOSS 
Adjusted EPS is a non-GAAP measure that excludes certain non-cash items and
other out-of-ordinary operational and business expansion items. The Company's
management believes adjusting out these items, including but not limited to
purchase accounting adjustments, stock-based compensation, out-of-ordinary
expenses/income and other miscellaneous charges is useful to investors because
it provides an overall understanding of the Company's historical financial
performance and future prospects. Management believes adjusted EPS is an
indication of the Company's base-line performance. Exclusion of these items
permits evaluation and comparison of results for the Company's core business
operations, and it is on this basis that management internally assesses the
Company's performance. 
# # # 
FOR MORE INFORMATION: 
Company Contacts: 
Jim Sims, +1 (303) 843-8062 
Vice President Corporate Communications 
Jim.Sims@Molycorp.com 
Brian Blackman, +1 (303) 843-8021 
Senior Manager, Investor Relations 
Brian.Blackman@Molycorp.com 
FINANCIAL STATEMENTS AND SUPPLEMENTARY TABLES 
-***- 
TABLE 1: BALANCE SHEETS 
MOLYCORP, INC.
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share and per share amounts) 
SEPTEMBER         DECEMBER 31, 
30, 2012             2011 
ASSETS
Current assets:
  Cash and cash              $      436,025      $     418,855 
equivalents
  Trade accounts                     88,471             70,679 
receivable, net
  Inventory                         281,133            111,943
  Deferred charges                   12,517              7,318
  Deferred tax assets                17,402                  -
  Income tax receivable              38,933             10,514
  Prepaid expenses                   48,711             19,735 
and other current 
assets 
-------------------------------------- 
Total current assets           923,192            639,044 
--------------------------------------
Non-current assets:
  Deposits                           23,287             23,286
  Property, plant and             1,363,444            561,628 
equipment, net
  Inventory                           9,601              4,362
  Intangible assets, net            479,173              3,072
  Investments                        68,006             20,000
  Deferred tax assets                10,298                  -
  Goodwill                          505,003              3,432
  Other non-current                   5,322                301 
assets 
-------------------------------------- 
Total non-                   2,464,134            616,081 
current assets 
--------------------------------------
TOTAL ASSETS                 $    3,387,326      $   1,255,125 
LIABILITIES AND 
STOCKHOLDERS' EQUITY
Current liabilities:
  Trade accounts             $      230,255      $     161,587 
payable
  Accrued expenses                   66,289             12,898
  Income tax payable                 25,601                  -
  Deferred tax liabilities              128              1,356
  Debt and capital lease             32,935              1,516 
obligations
  Other current liabilities           2,096              1,266 
-------------------------------------- 
Total current                  357,304            178,623 
liabilities 
--------------------------------------
Non-current liabilities:
  Asset retirement                   20,727             15,145 
obligation
  Deferred tax liabilities          189,894             18,899
  Debt and capital lease          1,183,528            196,545 
obligations
  Derivative liability                8,846                  -
  Pension liabilities                 2,855                  -
  Other non-current                   3,020                683 
liabilities 
-------------------------------------- 
Total non-current            1,408,870            231,272 
liabilities 
--------------------------------------
TOTAL LIABILITIES            $    1,766,174      $     409,895 
--------------------------------------
Commitments and 
contingencies
Stockholders' equity:
  Common stock, $0.001                  138                 84 
par value; 350,000,000 
shares authorized at 
September 30, 2012
  Preferred stock, $0.001                 2                  2 
par value; 5,000,000 
shares authorized at 
September 30, 2012
  Additional paid-in capital      1,686,226            838,547
  Accumulated other                  (9,646)           (8,481) 
comprehensive loss
  (Deficit) retained                (74,898)           15,078 
earnings 
-------------------------------------- 
Total Molycorp               1,601,822            845,230 
stockholders' equity 
Noncontrolling                  19,330                  - 
interests 
-------------------------------------- 
Total stockholders'          1,621,152            845,230 
equity 
--------------------------------------
TOTAL LIABILITIES AND        $    3,387,326      $   1,255,125 
STOCKHOLDERS' EQUITY 
-------------------------------------- 
-****- 
-***- 
TABLE 2: INCOME STATEMENTS 
MOLYCORP, INC.
Consolidated Statements of Operations and Comprehensive Income
(In thousands, except share and per share amounts) 
Three Months Ended 
September 30 
-------------------------------- 
-------------------------------- 
2012                 2011 
--------------------------------------
Sales                         $ 205,604            $ 138,050
Costs of sales:
  Costs excluding              (184,128)            (50,602) 
depreciation and 
amortization
  Depreciation and              (10,612)             (5,056) 
amortization 
--------------------------------------
Gross profit                     10,864               82,392
Operating expenses:
  Selling, general and          (31,468)            (12,182) 
administrative
  Corporate development          (1,073)               (573)
  Depreciation,                  (9,723)               (544) 
amortization 
and accretion
  Research and                   (8,929)             (2,148) 
development 
-------------------------------------- 
Operating                 (40,329)              66,945 
(loss) income 
--------------------------------------
Other income (expense):
  Other expense                     (57)                (117)
  Foreign exchange                1,910               (2,000) 
gains (losses), net
  Interest expense, net          (5,269)                (671) 
-------------------------------------- 
(3,416)              (2,788) 
-------------------------------------- 
(Loss) income             (43,745)               64,157 
before income 
taxes and equity 
earnings 
Income tax                 28,956              (19,056) 
Benefit 
(expense) 
Equity in results            (662)                    - 
of affiliates 
-------------------------------------- 
Net (loss) income         (15,451)               45,101 
Net (income) loss          (3,440)                 255) 
attributable to 
noncontrolling 
interest 
-------------------------------------- 
Net (loss) income       $ (18,891)           $  45,356 
attributable to 
Molycorp 
stockholders 
-------------------------------------- 
Net (loss) income             $ (15,451)           $  45,101
Other comprehensive 
income:
  Foreign currency                  526               (5,564    ) 
translation adjustments 
-------------------------------------- 
Comprehensive           $ (14,925       )    $  39,537 
(loss) income 
--------------------------------------
Comprehensive (loss)
  income attributable to: 
Molycorp                  (11,485)             40,346 
stockholders 
Noncontrolling             (3,440)              (809) 
interest 
-------------------------------------- 
$ (14,925)          $  39,537 
-------------------------------------- 
(Loss) income per 
share of common 
stock (Table 5): 
Basic                    $   (0.19)           $    0.51 
-------------------------------------- 
Diluted                  $   (0.19)           $    0.49 
-------------------------------------- 
Nine Months Ended 
September 30 
----------------------------------------- 
----------------------------------------- 
2012                   2011 
------------------    ---------------
Sales                                $   394,651           $   263,927
Costs of sales:
  Costs excluding                      (337,769)            (105,670) 
depreciation and 
amortization
  Depreciation and                      (19,065)              (9,588) 
amortization 
------------------    ---------------
Gross profit                              37,817               148,669
Operating expenses:
  Selling, general and                   (78,721 )             (31,465 ) 
administrative
  Corporate development                  (19,379 )              (3,889 )
  Depreciation,                          (12,361 )              (1,384 ) 
amortization 
and accretion
  Research and                           (18,628 )              (5,165 ) 
development 
------------------    --------------- 
Operating                          (91,272 )             106,766 
(loss) income 
Other income (expense):
  Other expense                        (37,615)                  (152)
  Foreign exchange                          724                (1,850) 
gains (losses), net
  Interest expense, net                 (14,989)                 (461) 
------------------    --------------- 
(51,880 )              (2,463 ) 
------------------    --------------- 
(Loss) income                     (143,152 )             104,303 
before income 
taxes and equity 
earnings 
Income tax                          58,442               (12,643 ) 
Benefit 
(expense) 
Equity in results                   (1,146 )                   - 
of affiliates 
-----    ------------------    --------------- 
Net (loss) income                  (85,856 )              91,660 
Net (income) loss                   (4,120 )                (713 ) 
attributable to 
noncontrolling 
interest 
-----    ------------------    --------------- 
Net (loss) income              $   (89,976 )         $    90,947 
attributable to 
Molycorp 
stockholders 
Net (loss) income                    $   (85,856 )         $    91,660
Other comprehensive 
income:
  Foreign currency          )             (1,165 )              (4,240 ) 
translation adjustments 
-----    ------------------    --------------- 
Comprehensive                  $   (87,021 )         $    87,420 
(loss) income 
------                   ---
Comprehensive (loss)
  income attributable to: 
Molycorp                           (82,901 )              87,130 
stockholders 
Noncontrolling                      (4,120 )                 290 
interest 
-----    ------------------    --------------- 
$   (87,021 )         $    87,420 
------                   --- 
(Loss) income per 
share of common 
stock (Table 5): 
Basic                           $     (0.97 )         $      1.01 
-----    ------------------    --------------- 
Diluted                         $     (0.97 )         $      1.00 
-----    ------------------    --------------- 
-****- 
-***- 
TABLE 3: STATEMENTS OF CASH FLOWS 
MOLYCORP, INC
Consolidated Statements of Cash Flows (Unaudited)
(In thousands) 
NINE MONTHS ENDED 
------------------------------------ 
SEPTEMBER 30, 2012  SEPTEMBER 30, 2011 
------------------------------------
Cash flows from operating activities:
  Net (loss) income                   $     (85,856 )     $      91,660
  Adjustments to reconcile net 
(loss) income to net cash 
from operating activities: 
Depreciation, amortization              31,426              10,972 
and accretion 
Deferred income tax benefit            (35,179 )            (4,544 ) 
Inventory write-downs                   41,082               1,585 
Release of inventory step-up            26,428              10,200 
value 
Stock-based compensation                 3,179               4,042 
expense 
Amortization of debt discount            1,257               1,037 
Allowance for doubtful accounts          2,500                   - 
Other operating adjustments                 56               2,461 
Net change in operating assets         (32,081 )           (88,689 ) 
and liabilities 
------------------------------------ 
Net cash (used in) provided         (47,188 )            28,724 
by operating activities 
------------------------------------
Cash flows from investing activities:
  Cash paid in connection with             (591,011 )           (20,021 ) 
acquisitions, net of cash 
acquired
  Investment in joint venture               (28,130 )                 -
  Deposits                                     (516 )             2,946
  Cash paid to acquire non                        -             (20,000 ) 
-marketable securities
  Capital expenditures                     (644,683 )          (160,917 )
  Other investing activities                  4,953                  19 
------------------------------------ 
Net cash used in                 (1,259,387 )          (197,973 ) 
investing activities 
------------------------------------
Cash flows from financing activities:
  Capital contributions                     390,225                   -
  Repayments of short-term                        -              (2,343 ) 
borrowings-related party
  Repayments of debt                       (228,431 )            (5,447 )
  Net proceeds from sale                          -             199,642 
of preferred stock
  Net proceeds from sale                    132,471                   - 
of common stock
  Issuance of 10% Senior                    635,373                   - 
Secured Notes
  Issuance of 6.00%                         395,712                   - 
Convertible Notes
  Issuance of 3.25%                               -             223,100 
Convertible Notes
  Payments of preferred                      (8,539 )            (6,167 ) 
dividends
  Proceeds from debt                          9,456               6,337
  Other financing activities                 (3,331 )                 - 
------------------------------------ 
Net cash provided                 1,322,936             415,122 
by financing activities
  Effect of exchange rate                       809                (348 ) 
changes on cash 
------------------------------------ 
Net change in cash                   17,170             245,525 
and cash equivalents
Cash and cash equivalents                   418,855             316,430
  at beginning of the period 
------------------------------------
Cash and cash equivalents             $     436,025       $     561,955 
at end of period 
------------------------------------ 
-****- 
-***- 
TABLE 4: SEGMENT INFORMATION 
Three months ended        Resources         Chemicals           Magnetic
  September 30, 2012                       and Oxides     Materials and Alloys 
(In thousands) 
-----------------------------------------------------
Sales:
 External             $      17,150      $    87,820      $        74,789
 Intersegment                 3,745           11,559                    - 
-----------------------------------------------------
Total sales           $      20,895      $    99,379      $        74,789 
-----------------------------------------------------
Depreciation,         $      (4,035 )    $    (5,685 )    $       (8,857)
  amortization
  and accretion
Operating (loss)      $     (23,966 )    $     2,149      $         1,419 
income
(Loss) income before  $     (25,506 )    $     1,201      $         1,215 
income taxes and
  equity earnings
Total assets at       $   1,686,524      $   565,673      $       536,299
  September 30,
  2012 (a)
Capital expenditures  $     187,611      $     2,597      $         1,432
Three months ended      Rare Metals      Eliminations
  September 30, 2012 
(In thousands) 
------------------------------------
Sales:
 External              $   25,845      $          -
 Intersegment                   -           (15,304 ) 
------------------------------------
Total sales            $   25,845      $    (15,304 ) 
------------------------------------
Depreciation,          $   (1,715 )    $          -
  amortization
  and accretion
Operating (loss)       $   (3,774 )    $        369 
income
(Loss) income before   $   (3,812 )    $        369 
income taxes and
  equity earnings
Total assets at        $   79,996      $   (161,201 )
  September 30,
  2012 (a)
Capital expenditures   $    2,837      $          -
Three months ended    Corporate and other  Total Molycorp, Inc.
  September 30, 2012 
(In thousands) 
-------------------------------------------
Sales:
 External                                  $       205,604
 Intersegment                                            - 
----------------------
Total sales                                $       205,604 
----------------------
Depreciation,         $          (43 )     $       (20,335 )
  amortization
  and accretion
Operating (loss)      $      (16,526 )     $       (40,329 ) 
income
(Loss) income before  $      (17,212 )     $       (43,745 ) 
income taxes and
  equity earnings
Total assets at       $      178,465       $     2,885,756
  September 30,
  2012 (a)
Capital expenditures  $        1,387       $       195,864 
(a) Excludes goodwill of $501.6 million arising on the Molycorp Canada
acquisition which has not been allocated to its operating segments. 
-****- 
-***- 
TABLE 5: EARNINGS (LOSS) PER SHARE 
Three Months Ended
(In thousands, except share              September 30,      September 30,
and per share amounts)                       2012               2011
-------------------------------------------------------------------------
Net (loss) income attributable to       $   (18,891 )       $   45,356
 Molycorp stockholders
Dividends on Convertible                     (2,846 )           (2,846 )
 Preferred Stock
(Loss) income attributable to               (21,737 )           42,510
 common stockholders
Weighted average common                 117,086,022         83,847,119
 shares outstanding*basic
Basic (loss) earnings per share         $     (0.19 )       $     0.51
(Loss) income attributable to               (21,737 )           42,510
 common stockholders
Effect of dilutive 3.25% Convertible Notes        *                404
(Loss) income attributable to common        (21,737 )           42,914
 stockholders adjusted for effect of dilution
Weighted average common                 117,086,022         87,069,256
 shares outstanding*diluted
Diluted (loss) earnings per share       $     (0.19 )       $     0.49
------------------------------------------------------------------------- 
------------------------------------------------------------------------- 
Nine Months Ended
(In thousands, except share            September 30,      September 30,
 and per share amounts)                    2012               2011
-------------------------------------------------------------------------
Net (loss) income attributable          $   (89,976 )       $   90,947
 to Molycorp stockholders
Dividends on Convertible Preferred Stock     (8,539 )           (7,116 )
(Loss) income attributable to               (98,515 )           83,831
 common stockholders
Weighted average common                 101,147,638         83,321,816
shares outstanding*basic
Basic (loss) earnings per share         $     (0.97 )       $     1.01
(Loss) income attributable to               (98,515 )           83,831
 common stockholders
Effect of dilutive 3.25% Convertible Notes        *                413
(Loss) income attributable to common        (98,515 )           84,244
 stockholders adjusted for effect of dilution
Weighted average common                 101,147,638         84,596,676
 shares outstanding*diluted
Diluted (loss) earnings per share       $     (0.97 )       $     1.00
------------------------------------------------------------------------- 
-****- 
TABLE 6: PRODUCT REVENUE, VOLUME, ASPS 
-------------------------------------------------------------------------
Product Revenues, Volumes 
Three Months Ended 
September 30, 
------------------------------------
Revenues (in thousands)                    2012                2011 
-----------------   ----------------
Resources (1)                         $    20,895         $   124,877
Chemicals and Oxides (2)                   99,379              22,579
Magnetic Materials and Alloys (3)          74,789              14,449
Rare Metals (4)                            25,845              13,332
Intersegments eliminations                (15,304 )           (37,187 ) 
-----------------   ----------------
Total Net Revenues                    $   205,604         $   138,050 
-----------------   ---------------- 
------------------------------------ 
Three Months Ended 
September 30, 
------------------------------------
Volumes (in metric tons)                     2012                2011 
-----------------   ----------------
Resources                                     835               1,002
Chemicals and Oxides                        1,933                 384
Magnetic Materials and Alloys               1,527                 226
Rare Metals                                    96                  88
Intersegments eliminations                   (720 )              (520 ) 
------------------------------------ 
Three Months Ended 
September 30, 
------------------------------------
Avg Selling Price per kilogram               2012                2011 
-----------------   ----------------
Resources                             $     25.02         $    124.65
Chemicals and Oxides                  $     51.41         $     58.79
Magnetic Materials and Alloys         $     48.98         $     63.95
Rare Metals                           $    269.22         $    151.50
------------------------------------------------------------------------- 
1. The Resources segment includes: the Company's operations at its Molycorp
Mountain Pass facility where it conducts rare earth minerals extraction to
produce rare earth concentrates; REO, including lanthanum, cerium, didymium,
neodymium, praseodymium and yttrium; heavy rare earth elements, such as
samarium, europium, gadolinium, terbium, dysprosium, and others; didymium rare
earth metal; and SorbXTM (formerly XSORBX), a line of proprietary rare
earth-based water treatment products. 
2. The Chemicals and Oxides division includes: production of REO at the
Company's operations in Sillamae, Estonia; heavy rare earths from the Company's
facilities in Jiangyin, Jiangsu Province, China; and production of REO, salts of
rare earth elements ("REEs"), zirconium-based engineered materials and mixed
rare earth/zirconium oxides from the Company's facilities in Zibo, Shandong
Province, China.  Rare earths products and zirconium-based engineered products
are primarily supplied to the automotive catalyst, electronics, ceramic, clean
technology and glass industries.
3. The Magnetic Materials and Alloys segment includes: the production of Neo
Powders through Molycorp's wholly-owned manufacturing facilities in Tianjin,
China and Korat, Thailand, under the Molycorp Magnequench brand. Neo Powders are
used to make bonded magnets for a variety of electronic and mechanical products
such as micro motors, precision motors, sensors and other applications requiring
high levels of magnetic strength, flexibility, small size and reduced weight.
This operating segment also includes manufacturing of neodymium and samarium
magnet alloys, other specialty alloy products and rare earth metals at the
Company's facility in Tolleson, Arizona.
4. The Rare Metals division includes: Molycorp's production of gallium, indium,
tantalum and rhenium from its operations in   Quapaw, Oklahoma; Blanding, Utah;
Peterborough, Ontario; Napanee, Ontario; Sagard, Germany; and Hyeongok
Industrial Zone in South Korea.  This operating segment also includes tantalum
and niobium from the Company's operations in Sillamae, Estonia. Rare metals are
primarily used in the wireless, light-emitting diode, flat panel display,
turbine, solar and catalyst industries. 
-****- 
-***- 
TABLE 7: NON-GAAP ADJUSTED NET LOSS RECONCILIATION 
Molycorp, Inc. 
Non-GAAP financial measures 
Adjusted Net Loss 
(In thousands, except                             Three Months
 per share data)                               Ended September 30, 
--------------------- 
2012 
---------------------
Net loss attributable to                      $       (18,891 )
Molycorp stockholders
Certain non-cash and other items:
Stock-based compensation                                1,279
Inventory write-downs                                  14,976 
Impact of purchase
 accounting on cost of inventory sold                  18,067
Out of the ordinary items:
Water removal                                           3,174
Project Phoenix non-capitalizable costs                 4,958
Business Expansion items:
Due diligence and other transaction costs               1,001
Other business expansion expenses                       1,743
Release of tax provision                              (15,100 )
Income tax effect of above adjustments                (14,463 ) 
---------------------
Adjusted net loss                                      (3,256 )
Dividends on Convertible Preferred Stock               (2,846 ) 
---------------------
Adjusted net loss attributed                  $        (6,102 )
to common stockholders for EPS purposes 
---------------------
Weighted average shares outstanding                117,086,022 
---------------------
Adjusted net loss per share                   $         (0.05 ) 
--------------------- 
-****- 
ABOUT MOLYCORP 
Molycorp is a leading rare earths and rare metals company, and combines a
world-class rare earth resource at Mountain Pass, California, with world-class
ultra-high-purity rare earth and rare metal materials processing capabilities. 
With 26 locations across 11 countries, Molycorp is vertically integrated across
the global rare earth mine-to-magnetics supply chain. It produces rare earth
magnetic materials as well as a variety of high-purity, custom engineered
products from 13 different rare earths (lights and heavies) as well as five rare
metals (gallium, indium, rhenium, tantalum and niobium), and the transition
metals yttrium and zirconium.  Through its Molycorp Magnequench subsidiary, the
Company is a leading global producer of neodymium-iron-boron (NdFeB) magnet
powders, used to manufacture bonded NdFeB permanent rare earth magnets.  Through
its joint venture with Daido Steel and Mitsubishi Corporation, Molycorp expects
to begin manufacturing next-generation, sintered NdFeB permanent rare earth
magnets in early 2013.  The rare earths and rare metals materials that Molycorp
produces are critical inputs in wide variety of existing and emerging
applications, including the following: advanced transportation technologies,
such as hybrid electric, plug-in hybrid electric, and all-electric vehicles;
clean energy technologies, such as solar and wind power systems; energy
efficiency technologies, such as high efficiency motors and appliances, compact
fluorescent lights, and color displays; computing and communications
applications, including fiber optics, lasers, and hard disk drives; defense and
aerospace applications, such as satellites, guidance and control systems, and
global positioning systems; and advanced water treatment technologies for use in
municipal wastewater, industrial wastewater, pool & spa, and outdoor recreation
applications. For more information please visit www.molycorp.com. 
SAFE HARBOR STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 
This release contains forward-looking statements that represent Molycorp's
beliefs, projections and predictions about future events or Molycorp's future
performance. Forward-looking statements can be identified by terminology such as
"may," "will," "would," "could," "should," "expect," "intend," "plan,"
"anticipate," "believe," "estimate," "predict," "potential," "continue" or the
negative of these terms or other similar expressions or phrases. These
forward-looking statements are necessarily subjective and involve known and
unknown risks, uncertainties and other important factors that could cause
Molycorp's actual results, performance or achievements or industry results to
differ materially from any future results, performance or achievement described
in or implied by such statements. 
Factors that may cause actual results to differ materially from expected results
described in forward-looking statements include, but are not limited to:  the
potential need to secure additional capital to implement Molycorp's business
plans, and Molycorp's ability to successfully secure any such capital;
Molycorp's ability to complete its planned capital projects, such as its initial
modernization and expansion efforts, including the achievement of an annual
production capacity of 19,050 metric tons at its Mountain Pass, California rare
earth mine and processing facility, or the Molycorp Mountain Pass facility,
which management refers to as Project Phoenix Phase 1, and the second phase
capacity expansion plan, which management refers to as Project Phoenix Phase 2,
and reach full planned production rates for REO and other planned downstream
products, in each case within the projected time frame; the success of
Molycorp's cost mitigation efforts in connection with Project Phoenix, which if
unsuccessful, might cause its costs to exceed budget; the final costs of
Molycorp's planned capital projects, such as Project Phoenix Phase 1 and Project
Phoenix Phase 2, which may differ from estimated costs; Molycorp's ability to
successfully integrate Neo Material Technologies, Inc. (now Molycorp Canada),
with its operations; Molycorp's ability to achieve fully the strategic and
financial objectives related to the acquisition of Molycorp Canada, including
the acquisition's impact on Molycorp's financial condition and results of
operations; and unexpected costs or liabilities that may arise from the
acquisition, ownership or operation of Molycorp Canada;  the rate of exchange of
the U.S. dollar to the Canadian dollar, the Japanese yen, and the Chinese
Renminbi; new products pricing; the competitive environment for these new
products; unexpected actions of domestic and foreign governments; various events
that could disrupt operations, including natural events and other risks;
uncertainties associated with Molycorp's reserve estimates and non-reserve
deposit information, including estimated mine life and annual production;
uncertainties related to feasibility studies that provide estimates of expected
or anticipated costs, expenditures and economic returns, REO prices, production
costs and other expenses for operations, which are subject to fluctuation;
uncertainties regarding global supply and demand for rare earths materials;
uncertainties regarding the results of Molycorp's exploratory drilling programs;
Molycorp's ability to enter into additional definitive agreements with its
customers and its ability to maintain customer relationships; Molycorp's
sintered neodymium-iron-boron rare earth magnet joint venture's ability to
successfully manufacture magnets within its expected timeframe; Molycorp's
ability to successfully integrate other acquired businesses; Molycorp's ability
to maintain appropriate relations with unions and employees; Molycorp's ability
to successfully implement its "mine-to-magnets" strategy; environmental laws,
regulations and permits affecting Molycorp's business, directly and indirectly,
including, among others, those relating to mine reclamation and restoration,
climate change, emissions to the air and water and human exposure to hazardous
substances used, released or disposed of by Molycorp; and uncertainties
associated with unanticipated geological conditions related to mining. 
For more information regarding these and other risks and uncertainties that
Molycorp may face, see the section entitled "Risk Factors" of the Company's
Annual Report on Form 10-K for the year ended December 31, 2011 and of the
Company's Quarterly Reports on Form 10-Q. Any forward-looking statement
contained in this release or the Annual Report on Form 10-K or the Quarterly
Reports on Form 10-Q reflects Molycorp's current views with respect to future
events and is subject to these and other risks, uncertainties and assumptions
relating to Molycorp's operations, operating results, growth strategy and
liquidity. You should not place undue reliance on these forward-looking
statements because such statements speak only as to the date when made. Molycorp
assumes no obligation to publicly update or revise these forward-looking
statements for any reason, or to update the reasons actual results could differ
materially from those anticipated in these forward-looking statements, even if
new information becomes available in the future, except as otherwise required by
applicable law. 
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