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Molycorp, Inc Common Stock Message Board

  • votingmachine votingmachine Nov 28, 2012 3:42 PM Flag

    Latest Presentation

    The slideshow is available on the company website. Go to the Investors section. Click on the Presentations/Events and then open the latest one.

    Slide 7&8 are a very good update on progress.
    Slide 11 shows cost reductions with facility completion. The 2014 costs are expected to be 15% to 30% of the historical ... which is rather ambiguous. If you say the historical is about $25 then that is a range of $3.75 to $7.50. If you use a $40 historical then you get a range of $6 to $12 per kg.

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    • In 2014 they will sell 40,000 metric tons. Probably with a net revenues of $2 billion. At a cost of $10,000 per metric ton ($10 per kg ... toward the high end of the cost range) they will have operational costs of $400 million. Overhead will be another $200 million. That leaves $1.4 billion as profit. For convenience assume 140 million stock shares. That is an EPS of $10. If MCP is mature and no longer expanding, then a multiple of 10 and a stock price of $100 make sense. If MCP is still acquiring and expanding then a multiple of 20 makes sense and a stock price of $200.

      The revenues will depend on how far out the value chain they can go ... selling at magnets is better than selling at neodymium oxide. Lanthanum and Cerium will drag the average sale price per kg down. Using a composite $50 is a very WAG when the individual RE prices may be all over, as may the prices of other rare metals they sell.

      • 1 Reply to votingmachine
      • Would love to see your numbers. Average sell price per kg REE for MCP in Q3 was $25. See slides from Q3 conference call, it is near end. Since 1 September prices are down more than 25%. If prices do not go down further then that is 750 Mil. This is still very good but a long ways from 2 bil. With Lynas and MCP hitting production about the same time ( I think Lynas is a Q behind in reality) Prices are not going up for a while. I agree the future is looking brighter but lets keep some reality in the numbers. In the petro industry it takes a new cracking facility about 3 years to hit it’s target costs, I doubt MCP will achieve better than ~$15 /KG until late 2013. With Gas prices falling fast in their area I have no doubt they will achieve the ~$6.00 range eventually but I doubt it will be before mid to late 2014. The learning curve needed to optimize on operating a facility like this take quite awhile. There are always start up problems that take money and time to fix. Plan for it and you will only be surprised on the up side.

    • interesting that they claim Phase 2 will be complete in 2012 as well. Means capacity is going to be 40,000 tons by the end of December. Better than I thought. Must by why Japan signed up for 10K tons from them in 2013. I was wondering how they were going to fill it with a 19,000 ton capacity.

    • Yeah that presentation must have really "WOWED" attendee's of the Goldman Sachs conf..... market up strong and MCP down 3% ......

      Once again the spike from 5.75 to 9.06 is now played out and over .....and down we go !

      just wait till JP Morgan listens to this "presentation" tomorrow.....they will see right thru it and MCP will close below $8 by tomorrow or Friday at the latest !

      New ALL TIME LOWS coming.....just give it time

      Sentiment: Strong Sell

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