The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from Filing Services Canada

Molycorp Reports Third Quarter 2012 Results

Thursday, November 08, 2012

Molycorp Reports Third Quarter 2012 Results17:29 EST Thursday, November 08, 2012FSC / Press ReleaseMolycorp Reports Third Quarter 2012 ResultsHIGHLIGHTS:*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 RESULTSThe 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. EASTERNMolycorp 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 LOSSAdjusted 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 CommunicationsJim.Sims@Molycorp.com Brian Blackman, +1 (303) 843-8021 Senior Manager, Investor RelationsBrian.Blackman@Molycorp.comFINANCIAL STATEMENTS AND SUPPLEMENTARY TABLES-***-TABLE 1: BALANCE SHEETSMOLYCORP, 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 STATEMENTSMOLYCORP, 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) incomeOther 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 stockholdersNet (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 FLOWSMOLYCORP, 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 INFORMATIONThree 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 MOLYCORPMolycorp 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 STATEMENTSThis 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.To view this press release as a webpage, please click on the following link:http://www.fscwire.com/pr/molycorpnov082012.htmMaximum News Dissemination by FSCwire. http://www.fscwire.com