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Press release from Business Wire

Molycorp Reports Second Quarter 2012 Results

<p> <b>HIGHLIGHTS:</b> </p> <ul> <li class='bwlistitemmargb'> Molycorp's Project Phoenix remains on-time to ramp up production at Mountain Pass to a Phase 1 rate of 19,050 metric tons (mt) per year in Q4 of 2012, and to mechanically complete its Phase 2 capacity of 40,000 mt by year end. Project Phoenix recently exceeded three million work hours without a Lost Time Incident. </li> <li class='bwlistitemmargb'> After closing its acquisition of Neo Materials (now known as Molycorp Canada) in June, Molycorp now produces rare earth magnetic materials as well as a variety of high-purity, custom engineered products from 13 different rare earths (lights and heavies), five rare metals (gallium, indium, rhenium, tantalum, and niobium), and the transition metals yttrium and zirconium. </li> <li class='bwlistitemmargb'> Molycorp's newly acquired product line of bonded magnet alloy powders, produced by Molycorp Magnequench, had a record quarter with 1,880 metric tons of alloy powders sold at an average sales price of $50.24 per kilogram (kg). During the period from June 12, 2012 to June 30, 2012, 386 mt of these powders contributed to Molycorp Canada's financial reporting. </li> <li class='bwlistitemmargb'> Molycorp's ultra-pure advanced materials facility in Zibo, China was notified on July 27, 2012 that it had passed the environmental inspection and met requirements to be fully permitted by the Chinese Ministry of Environmental Protection. </li> <li class='bwlistitemmargb'> Molycorp recorded Q2 GAAP net sales of $104.6 million, based on an average sales price of $52.48 per kg of rare earth oxide (REO) equivalent product. Average sales prices for rare earth products were positively influenced in the quarter by value-added customized rare earth products from Molycorp Canada. The Company also sold 93 mt of rare metals at an average sales price of $187.85 per kilogram. </li> <li class='bwlistitemmargb'> The Company reported a Q2 GAAP loss of $0.71 per diluted share and a loss of $0.03 on an adjusted non-GAAP earnings per diluted share basis, taking into account operational expansion items, out-of-ordinary business expenses, and certain non-cash items. </li> </ul>

Thursday, August 02, 2012

Molycorp Reports Second Quarter 2012 Results16:01 EDT Thursday, August 02, 2012 GREENWOOD VILLAGE, Colo. (Business Wire) -- Molycorp, Inc. (NYSE:MCP) (“Molycorp” or the “Company”) today announced financial and operating results for the second quarter 2012. "Molycorp continues to make significant progress on our three strategic priorities: completing Project Phoenix, commercializing XSORBX, and integrating Neo Materials (now known as Molycorp Canada) into Molycorp," said Mark Smith, President and Chief Executive Officer. "Our phased start-up of Project Phoenix Phase 1 is in full-swing, and we are on target to meet our accelerated schedule of achieving the Phase 1 production rate of 19,050 metric tons in Q4." Smith continued: "We successfully completed the acquisition of Neo Materials during the quarter, and are now producing a full range of ultra-pure, highly engineered custom materials, including heavy rare earths. Molycorp Magnequench had a record quarter in Q2 2012, selling 1,880 mt of alloy powders. In the brief integration period to date, I continue to be impressed with the knowledge, work ethic, and passion which all of our employees bring to the Molycorp family. I continue to believe the addition of Molycorp Canada better positions the Company through diversification into new geographies and sophisticated end-use markets. Our vertical integration into a comprehensive provider of advanced materials has expanded significantly with the addition of Molycorp Canada." QUARTERLY RESULTS Net sales for the quarter were $104.6 million, up 5% from the second quarter 2011. Molycorp Silmet and Molycorp Metals & Alloys (MMA) were acquired during the second quarter of 2011, and Molycorp Canada was acquired on June 11, 2012, which both contributed to net sales during Q2 2012. Molycorp's second quarter GAAP gross loss was $4.1 millionduring the quarter, compared to gross profit of $56.7 million during the second quarter of 2011. Gross profit decreased substantially from the prior year period as a result of lower product volumes shipped, lower prices, increased production costs, and other transaction costs related to acquiring Molycorp Canada. Gross loss during the quarter was negatively impacted by $30.4 million of expenses related to certain inventory write-downs, the impact of purchase accounting, stock-based compensation in cost of sales, and abnormal costs. Molycorp's second quarter GAAP loss attributable to common stockholders was $67.6 million, or a loss of $0.71 per diluted share. Earnings decreased substantially from the prior year period as a result of lower product volumes, lower prices, costs related to the Project Phoenix transition, and other transaction costs related to acquiring Molycorp Canada. Adjusted loss per diluted share of $0.03 reflects operational expansion items, out-of-ordinary business expenses, and certain non-cash items as compared to U.S. GAAP loss per share, such as $52.8 million related to the acquisition of Molycorp Canada, $19.5 million in consolidated inventory write-downs, and $8.4 million in purchase accounting adjustments impacted earnings, among others. 2012 OUTLOOK As of August 2, 2012, the Company is re-affirming its annual production of REO equivalent products to be in the range of 8,000 mt to 10,000 mt for the full year across its Mountain Pass, Sillamäe and Tolleson facilities, which does not include production from its newly acquired Molycorp Canada operations. The Company continues to believe it is well positioned for year-over-year sales growth given the Mountain Pass ramp-up, existing customer orders, a growing pipeline of global business opportunities, and its acquisitions. Capital expenditures for Project Phoenix Phase 1 and Phase 2, commissioning and start-up, and other capital projects at our Molycorp Mountain Pass facility are expected to be approximately $289 million on an accrual basis for the remainder of 2012. All other capital expenditures across the Company (including Molycorp Canada) are expected to be approximately $17 million for the remainder of 2012. All of the amounts for future capital spending described above are estimates that are subject to change as the projects are further developed. The Company is encountering cost pressures on its projects and has initiated measures to mitigate certain adverse cost trends. The Company may incur additional costs, which may be material, if its mitigation measures are not successful. The Company expects to fund operating expenses, working capital, capital expenditures and other cash requirements from its available cash balances, anticipated cash flow from operations, and other financing arrangements. Based on our on-going monitoring of the rare earth industry and our business, we expect that our cash flow from operations for the remainder of 2012 will likely be less than we expected. Accordingly, we will need to secure additional financing for a substantial portion of our remaining 2012 capital expenditures and other cash requirements. For example, we are in negotiations with various third-parties with respect to potential equipment leasing arrangements, asset-based revolving credit facilities and other debt financing arrangements. We cannot assure you that we will be able to obtain any such financing on commercially acceptable terms or at all. If we are unable to raise sufficient capital through public or private securities offerings, or other alternative sources of financing, we will implement a short-term business plan in 2012. Under this plan, discretionary capital expenditures, and if necessary, non-discretionary capital expenditures will be curtailed during the second half of the year. 2012 MARKET DYNAMICS During the second quarter of 2012, prices for most of our products have stabilized or declined at a much slower pace than earlier in the year. We believe this trend may continue in the third and fourth quarter of 2012, although there can be no assurance. Commenting on recent market conditions, Smith said: “The diversity of our vertical integration strategy is showing its value, as we have observed strengthening markets for certain downstream rare earth products, including bonded magnetic powders produced by Molycorp Magnequench. On the whole, pricing of rare earth oxides have flattened, although the floor remains soft in certain Japanese supply chains. We believe that these supply chains will continue to de-stock over the second half of 2012. The longer-term supply and demand picture remains tight as Chinese regulations increase and the industry continues to consolidate within China. Molycorp remains well positioned to fulfill the demand gap as it brings reliable supply online from Project Phoenix." Smith continued: "We see motor miniaturization and the ongoing increase in hybrid electric and full electric vehicle sales, driven by the need for increased global fuel efficiency, as a key growth driver for our industry. We anticipate the continuing stabilization of pricing and, more importantly, Molycorp's availability of supply as having a positive impact on the growing demand of neodymium-iron-boron (NdFeB) magnets in the automotive space. Design engineers should not worry any longer about uncertainty of supply." 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. FINANCIAL STATEMENTS AND SUPPLEMENTARY TABLESTABLE 1: BALANCE SHEETMOLYCORP, INC. Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except share and per share amounts)     June 30, 2012December 31, 2011ASSETS Current assets: Cash and cash equivalents $ 369,262 $ 418,855 Restricted cash 4,951 — Trade accounts receivable, net 118,402 70,679 Inventory 319,872 111,943 Deferred charges 16,627 7,318 Deferred tax assets 9,179 — Income tax receivable 28,648 10,514 Prepaid expenses and other current assets 46,038   19,735   Total current assets 912,979   639,044   Non-current assets: Deposits 23,283 23,286 Property, plant and equipment, net 1,153,304 561,628 Inventory 10,445 4,362 Intangible assets, net 491,927 3,072 Investments 55,339 20,000 Deferred tax assets 1,704 — Goodwill 505,003 3,432 Other non-current assets 5,244   301   Total non-current assets 2,246,249   616,081   Total assets $ 3,159,228   $ 1,255,125   LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Trade accounts payable $ 287,928 $ 161,587 Accrued expenses 56,605 12,898 Income tax payable 25,013 — Deferred tax liabilities 692 1,356 Debt and capital lease obligations 263,569 1,516 Other current liabilities 3,807   1,266   Total current liabilities 637,614   178,623   Non-current liabilities: Asset retirement obligation 20,162 15,145 Deferred tax liabilities 172,715 18,899 Debt and capital lease obligations 850,319 196,545 Derivative liability 9,148 — Pension liabilities 2,835 — Other non-current liabilities 3,404   683   Total non-current liabilities 1,058,583   231,272   Total liabilities $ 1,696,197   $ 409,895   Commitments and contingencies Stockholders' equity: Common stock, $0.001 par value; 350,000,000 shares authorized at June 30, 2012 110 84 Preferred stock, $0.001 par value; 5,000,000 shares authorized at June 30, 2012 2 2 Additional paid-in capital 1,518,347 838,547 Accumulated other comprehensive loss (10,172 ) (8,481 ) (Deficit)/retained earnings (61,697 ) 15,078   Total Molycorp stockholders' equity 1,446,590 845,230 Noncontrolling interests 16,441   —   Total stockholders' equity 1,463,031   845,230   Total liabilities and stockholders' equity $ 3,159,228   $ 1,255,125     TABLE 2: INCOME STATEMENTMOLYCORP, INC. Consolidated Statements of Operations and Comprehensive Income (In thousands, except share and per share amounts)         Three Months EndedSix Months Ended   June 30June 302012201120122011 Sales $ 104,577 $ 99,615 $ 189,047 $ 125,876 Costs of sales: Costs excluding depreciation and amortization (103,569 ) (40,348 ) (153,641 ) (55,069 ) Depreciation and amortization   (5,081 )   (2,575 )   (8,452 )   (4,531 ) Gross profit (4,073 ) 56,692 26,954 66,276 Operating expenses: Selling, general and administrative (23,070 ) (10,476 ) (47,253 ) (19,175 ) Corporate development (14,925 ) (2,042 ) (18,305 ) (3,317 ) Depreciation, amortization and accretion (2,279 ) (523 ) (2,637 ) (840 ) Research and development   (6,049 )   (1,753 )   (9,699 )   (3,017 ) Operating (loss) income   (50,396 )   41,898     (50,940 )   39,927   Other income (expense): Other (expense) income (30,980 ) 133 (37,558 ) (35 ) Foreign exchange (losses) gains, net (2,789 ) 42 (1,185 ) 42 Interest (expense) income, net   (9,805 )   70     (9,720 )   210     (43,574 )   245     (48,463 )   217   (Loss) income before income taxes and equity earnings (93,970 ) 42,143 (99,403 ) 40,144 Income tax benefit 27,303 6,612 29,485 6,413 Equity in results of affiliates   (257 )   —     (484 )   —   Net (loss) income (66,924 ) 48,755 (70,402 ) 46,557 Net income attributable to noncontrolling interest   (680 )   (968 )   (680 )   (968 ) Net (loss) income attributable to Molycorp stockholders $ (67,604 ) $ 47,787   $ (71,082 ) $ 45,589     Net (loss) income $ (66,924 ) $ 48,755 $ (70,402 ) $ 46,557 Other comprehensive income: Foreign currency translation adjustments   (4,221 )   1,324     (1,691 )   1,324   Comprehensive (loss) income $ (71,145 ) $ 50,079   $ (72,093 ) $ 47,881   Comprehensive (loss) income attributable to: Molycorp stockholders (70,465 ) 48,980 (71,413 ) 46,782 Noncontrolling interest   (680 )   1,099     (680 )   1,099   $ (71,145 ) $ 50,079   $ (72,093 ) $ 47,881   Weighted average shares outstanding (Common shares) Basic   99,175,285     83,847,119     93,090,872     83,054,811   Diluted   99,175,285     84,413,499     93,090,872     83,339,566   (Loss) income per share of common stock: Basic $ (0.71 ) $ 0.54   $ (0.82 ) $ 0.50   Diluted $ (0.71 ) $ 0.53   $ (0.82 ) $ 0.50     TABLE 3: STATEMENT OF CASH FLOWSMOLYCORP, INC. Consolidated Statements of Cash Flows (Unaudited) (In thousands)   Six months endedJune 30,2012   June 30,2011 Cash flows from operating activities: Net (loss) income $ (70,402 ) $ 46,557 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, amortization and accretion 11,188 5,895 Deferred income tax benefit (12,131 ) (13,481 ) Inventory write-downs 26,106 1,585 Stock-based compensation expense 1,900 3,386 Foreign currency transaction losses, net 1,214 — Unrealized loss on derivatives — — Allowance for doubtful accounts 2,500 — Equity results of affiliates 484 — Other operating adjustments and write-downs (66 ) (113 ) Net change in operating assets and liabilities   (25,174 )   (12,471 ) Net cash (used in) provided by operating activities   (64,381 )   31,358   Cash flows from investing activities: Cash paid in connection with acquisitions, net of cash acquired (591,011 ) (20,021 ) Investment in joint venture (14,805 ) — Deposits (488 ) 10,700 Capital expenditures (403,932 ) (79,291 ) Other investing activities   2     (33 ) Net cash used in investing activities   (1,010,234 )   (88,645 ) Cash flows provided by financing activities: Capital contributions 390,225 — Repayments of short-term borrowings—related party — (1,688 ) Repayments of debt (2,188 ) (2,958 ) Net proceeds from sale of preferred stock — 199,642 Net proceeds from sale of Senior Notes 635,373 — Net proceeds from sale of Convertible Notes — 223,100 Payments of preferred dividends (5,693 ) (3,320 ) Proceeds from debt 9,745 6,288 Other financing activities   (2,394 )   (22 ) Net cash provided by financing activities 1,025,068 421,042 Effect of exchange rate changes on cash   (46 )   97   Net change in cash and cash equivalents (49,593 ) 363,852 Cash and cash equivalents at beginning of the period   418,855     316,430   Cash and cash equivalents at end of period $ 369,262   $ 680,282     TABLE 4: SEGMENT INFORMATIONThree months ended and at June 30, 2012 (In thousands)   Molycorp Mountain Pass   Molycorp Silmet   MMA   Molycorp Canada   Eliminations(a)   Corporate and other(b)   Total Molycorp, Inc. Sales: External $ 16,533 $ 31,541 $ 12,870 $ 43,633 $ — $ — $ 104,577 Intersegment   400     712     —     14     (1,126 )   —     —   Total sales 16,933 32,253 12,870 43,647 (1,126 ) — 104,577 Cost of sales: Costs excluding depreciation and amortization (22,277 ) (37,947 ) (17,112 ) (37,703 ) 11,470 — (103,569 ) Depreciation and amortization   (2,229 )   (1,526 )   (79 )   (1,247 )   —     —     (5,081 ) Gross profit (7,573 ) (7,220 ) (4,321 ) 4,697 10,344 — (4,073 ) Operating expenses: Selling, general and administrative (9,041 ) (1,510 ) (116 ) (1,737 ) — (10,666 ) (23,070 ) Corporate development — — — — — (14,925 ) (14,925 ) Depreciation, amortization and accretion (365 ) (77 ) — (1,813 ) — (24 ) (2,279 ) Research and development   (2,006 )   (359 )   —     (1,175 )   —     (2,509 )   (6,049 ) Operating (loss) income (18,985 ) (9,166 ) (4,437 ) (28 ) 10,344 (28,124 ) (50,396 ) Interest expense — (177 ) (175 ) (828 ) — (8,625 ) (9,805 ) Other income (expense)   21     (2,385 )   8     (478 )   —     (30,935 )   (33,769 ) (Loss) income before income taxes and equity earnings (loss) $ (18,964 ) $ (11,728 ) $ (4,604 ) $ (1,334 ) $ 10,344   $ (67,684 ) $ (93,970 ) Equity (loss) earnings in results of affiliates $ (15,754 ) $ —   $ —   $ 309   $ 15,754   $ (566 ) $ (257 ) Total assets $ 433,808   $ 79,185   $ 20,174   $ 1,746,876   $ (80,988 ) $ 960,173   $ 3,159,228   Investment in equity method affiliates $ 14,011   $ —   $ —   $ 19,053   $ —   $ —   $ 33,064   Capital expenditures (c) $ 228,787   $ 5,254   $ —   $ 832   $ —   $ —   $ 234,873     TABLE 5: EARNINGS PER SHARE(In thousands, except share and per share amounts)   Three MonthsEnded June 30,2012   Three MonthsEnded June 30,2011 Net (loss) income attributable to Molycorp stockholders $ (67,604 ) $ 47,787 Dividends on Convertible Preferred Stock   (2,846 )   (2,846 ) (Loss) income attributable to common stockholders   (70,450 )   44,941   Weighted average common shares outstanding—basic 99,175,285 83,847,119 Basic (loss) earnings per share $ (0.71 ) $ 0.54   Weighted average common shares outstanding—diluted 99,175,285 84,413,499 Diluted (loss) earnings per share $ (0.71 ) $ 0.53         (In thousands, except share and per share amounts)Six MonthsEnded June 30,2012Six MonthsEnded June 30,2011 Net (loss) income attributable to Molycorp stockholders $ (71,082 ) $ 45,589 Dividends on Convertible Preferred Stock   (5,693 )   (4,269 ) (Loss) income attributable to common stockholders   (76,775 )   41,320   Weighted average common shares outstanding—basic 93,090,872 83,054,811 Basic (loss) earnings per share $ (0.82 ) $ 0.50   Weighted average common shares outstanding—diluted 93,090,872 83,339,566 Diluted (loss) earnings per share $ (0.82 ) $ 0.50     TABLE 6: PRODUCT REVENUE, VOLUME, ASPSProduct Revenues, Volumes     Three Months Ended June 30,Revenues (in thousands)20122011REO Equivalent ProductsMolycorp Mountain Pass, Silmet Selected Products Neodymium/Praseodymium Products $ 11,581 $ 26,464 Lanthanum Products 8,936 16,792 Cerium Products 10,896 31,235 Consolidated Segments Other Rare Earth Products1 22,270 1,099 Rare Earth Alloys   8,984   7,182 Subtotal REO Equivalent 62,667 82,772   Rare Metals2 17,470 13,525 Neo Powders 18,662 — Other3   5,778   3,318 Total Net Revenues $ 104,577 $ 99,615             Three Months Ended June 30,Volumes (in metric tons)20122011REO Equivalent ProductsMolycorp Mountain Pass, Silmet Selected Products Neodymium/Praseodymium Products 148 182 Lanthanum Products 429 427 Cerium Products 350 351 Consolidated Segments Other Rare Earth Products1 242 13 Rare Earth Alloys   25   43 Subtotal REO Equivalent 1,194 1,016   Rare Metals2 93 79 Neo Powders 368 — Other3   146   1,419 Total Product Volumes nm nm             Three Months Ended June 30,Avg Selling Price per kilogram20122011REO Equivalent ProductsMolycorp Mountain Pass, Silmet Selected Products Neodymium/Praseodymium Products $ 78 $ 145 Lanthanum Products 21 39 Cerium Products 31 89 Consolidated Segments Other Rare Earth Products1 92 85 Rare Earth Alloys   359   167 Subtotal REO Equivalent 52 81   Rare Metals2 188 171 Neo Powders 51 — Other3   40   2 Average Selling Price nm nm     nm = not material 1. Other rare earth products consists of: dysprosium, europium, gadolinium, samarium, terbium, yttrium, yttrium-europium co-precipitates, rare earth fluorides; and neodymium, praseodymium, lanthanum, and cerium from Molycorp Canada. 2. Rare metals consist of niobium, tantalum, gallium, indium and rhenium. 3. Other non-rare earth products consists of: zirconium oxides and salts, mixed rare earth/zirconium oxides, specialty alloys, small metals and metal. These volumes are not REO equivalent, but metric tons.   TABLE 7: NON-GAAP ADJUSTED NET INCOME RECONCILIATIONMolycorp, Inc.Non-GAAP financial measuresAdjusted Net Income (Loss)   (In thousands, except per share data)Three MonthsEnded June 30,2012 Net (loss) income attributable to Molycorp stockholders $ (67,604 ) Certain non-cash and other items: Stock-based compensation 1,075 Inventory write-downs 19,542 Impact of purchase accounting on cost of inventory sold, net of tax 8,361     Out of the ordinary items: Water removal 4,532 Project Phoenix non-capitalizable costs 4,278     Business Expansion items: Due diligence and other transaction costs 53,756 Other business expansion expenses 3,466 Income tax effect of above adjustments   (27,553 ) Adjusted net (loss) income $ (147 ) Cumulative paid and undeclared dividends on preferred stock   (2,846 ) Adjusted net (loss) income attributed to common stockholders for dilutive EPS purposes   (2,993 ) Weighted average diluted shares outstanding   99,175,285   Adjusted diluted net (loss) income per share $ (0.03 )   NON-GAAP ADJUSTED NET INCOME 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. 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 accelerated start-up of 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. Also as a result of the Molycorp Canada acquisition, Molycorp's business performance may be materially affected by a number of other factors and uncertainties including, but not limited to: 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; and various events which could disrupt operations, including natural events and other risks. Other risk factors and uncertainties that may cause actual results to differ materially from expected results include: 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. Molycorp, Inc.Jim Sims, +1-303-843-8062Vice President Corporate CommunicationsJim.Sims@Molycorp.comBrian Blackman, +1-303-843-8021Senior Manager, Investor RelationsBrian.Blackman@Molycorp.com