I was in attendance. I would say that about 75 people were in the room and probably about 50 were not employed by Molycorp. The attendance was higher last year. The business portion of the meeting was very short, ..about 10 minutes. Ross Bhappu ran the meeting. He made a point of thanking Mark Smith for his 10 years of service to Molycorp early in his remarks. I did not see Mr. Smith in the room. The
CEO, Constantine Karayannopoulos made most of the presentation and handled questions. I was very impressed with CK's command of the subject and his response to questions. He is a Chemical Engineer by training with 20 years experience in RE much of it with NEO before its acquisition by MCP. I'll mention some points he made during his presentation and in response to questions.
1. He has met with the Chinese official overseeing production of RE and made the point that China must control the illicit production and smuggling of RE. The official is in agreement.
2. Illegal RE is smuggled into Vietnam and from there to Japanese trading companies for use in Japan.
3. Illegal RE is poorly refined and is not suitable for High tech operations. Cerium Oxide of purity as low as 40% could be used for glass polishing.
4. Major companies are mostly not buying illegal RE as they need high quality material.
5. There is a new plant flyover available on the website.
6. They expect to have phase I capability in the next quarter.
7. they expect to have the chlor-alkali plant up this year. The plant will reduce production cost by $5/Kg.
8. Chlor-alkali provides HCl (Hydrochloric Acid) and Caustic Soda ( Sodium Hydroxide, NaOH) and recycles it from the production process reducing environmental impact as well as cost.
I will continue in a second post.
Thanks for the great report denverdude very informative also thanks to cb also ,great job guys , this is a long term investment for me and I refuse to listen to these bashers ! or sell off any of my shares , CK imo has done a great job since taking over in just a very short time , can't wait to see what he can do next year .
Sentiment: Strong Buy
I paid attention to what you wrote. Really! And to be honest, the lingo was beyond me. But my mind started to trail off as you and the other cronies here spoke about all the things that Molycorp DOES...or WANTS to do...or will do IF so and so....etc. for one reason and one reason only: your current stock price. I just love it when people who are losing lots of money always look for rational reasons to hold or buy a stock. It's just very cute.
Sentiment: Strong Sell
Bob, based on your statements, it doesn't surprise me one bit that the lingo is beyond you. Denverdude was kind enough to provide a brief but factual report of what went on in the meeting. If I recall correctly, he even stated something to the effect that very little information was actually presented. Just basic facts. Obviously you don't want to hear those facts. I would be willing to go out on a limb and bet that you are a far left liberal who believes in freedom of speech until someone says something that you don't agree with. There's already way too much garbage from both sides on this board, so when someone takes the time to post relevant facts, it should be welcomed by all. Thanks again, Denverdude!
Sentiment: Strong Buy
I think you miss the point. The cronies are fundamental based investors. They want to understand what the company does, its goals and its prospects. They have a long term view. There are others whose time frame may be minutes to days. IMO, they will not do well with a company like Molycorp. Good fortune to you.
Pretty good. Though last month, the dates given for Phase 1 (originally due 9/30/12) was mid-year (i.e., by this weekend) and Chlor-Alkali, the end of August/beginning of September, with a month to ramp up.
Yeah the schedule is pretty loose. This quarter to have phase 1 capacity completed ... but they won't run at phase 1 if the economics aren't favorable. And the Chlor-Alkali plant up this year ... that could be July, that could be December. I would think they should be getting a tighter grip on the schedule, not a looser grip.
I've been pretty much a proponent of the "other" metal value in MCP operations. In addition to some of the ones mentioned here, they also have some Indium capacity, via Neo. I believe there is some niobium also, although that is a distant memory.
The thing I recall reading some time back was that Sorbx is only favorable economically with Cerium under $10. There are other water purification products and on a comparative economic basis, you need to charge at that $10 Cerium equivalent price. And since Cerium has been over that for quite a while, Sorbx sales require a commitment to a short term loss, to build the long term market. In Q1-2013, the cerium oxide price was still quoted as about $12, so the current testing represents a commitment to building the trust level for Sorbx performance.
Again, that is purely IIRC, not verified. Obviously the price of Sorbx depends on the materials, and cerium oxide is one key ingredient. And the alternative products for water treatment ... I have no idea on the price and performance. But the bottom line is the cost per gallon of water treated, and Sorbx has to be in-line with alternatives/substitutes. And the $10 per kg Cerium Oxide price seems to be stuck in my head as the requirement for Sorbx market economics.
Add my thanks to the many for taking the time to pass on the meeting notes.
The combined heat and electrical energy plant is very important to the economics of Mountain Pass. It uses natural gas. Electricity is produced at $0.03/kWH whereas power from the grid is $0.16/kWH. The heat is in the form of steam used in the production process. If grid power were used, it would make very expensive steam, IMO.
9. RE demand has grown 5X in the last 20 years. China now supplies about 95% of this. Current end demand is about 100,000 metric tons/yr but about 30,000 of this is coming out of inventories from 2011. This reserve should largely be exhausted by the end of this year. Demand will grow.
10. MCP supplies Tantalum and gallium which are not rare earths.
11. Ga is used in the production of LEDs (I think both GaAS and GaN) Other RE are used in LED Phosphors for producing desired light spectrum.
12. Computers, including Hand held contain about 2.7 g of RE magnets produced by Magnaquench. (a million computers would require 2.7 metric tons of RE)
13. Mountain Pass blends ore to obtain a consistent feed stock to the mill. Ore varies by location in the mine.
14. Mountain Pass can supply the world demand for light RE. MCP is looking at ways to supply more heavy RE.
15. Cerium seems to be about half of the RE in Mountain Pass.
16. Too early to comment on Xorbex potential.
17. Cerium is used in all automotive catalytic convertors along with Zirconium and Platinum and Palladium. I think it reduces need for the latter metals.
18 Europe is introducing higher requirements for emission controls. This will include Diesel catalytic convertors which will require Cerium.
19 MCP has enough cash to complete the plant and for operations. If that proves not to be true, they will raise cash before it is needed.
20. Mountain pass will not be run at volumes which are uneconomical or which produce excess supply.
21. There was no discussion of the end of the SEC inquiry at the meeting.
22. Brian Blackman confirmed for me that MCP has about 95,000 shareholders but that they are counted among clients of 320 primarily institutional holders.
23. Most, if not all of the approximately 14 questioners were individual stockholders from the Denver area.