From 1/27/15 article in Reuters: Australian rare earths producer Lynas Corp said on Monday it was unlikely to break even this quarter despite achieving positive cash flow in December, blaming weak rare earths prices and PLANT PROBLEMS.
MCP was far ahead of Lynas in production, then during an attempt to ramp quick, found 2 huge issues with leaching and Chlor-Alkali. Lynas is far less transparent than MCP (they answer no questions), so investors may not find out what is wrong with the plant. Of course, they have a simple old design, so maybe their problem will be easier and quicker to fix than MCP's.
We'll see how it shakes out.
I am thankful for the chance to accumulate, especially if shorts are paying for it. I do not expect the 30% offer to last long. As noted above, the particular circumstances that inspired rate will most likely change with CC, at which time it would've been 20% for 10 days and 30% for almost a month. I'm just doing what you continually advocate: employ any and all strategies to accumulate.
.99 after hours: the perfect price, to the penny, to loan this stock. Once we get to CC, however, it will swing up or down (history says down).
I hope it glides along like this for a long time (not forever, of course, but for a year would be fine) -- in the 90's is perfect. My guess is because MCP can't be bought in a Schwab margin account when Share price is below $1, that, along with it still being a heavily shorted stock, is giving us this 30% windfall. At 2% and 4%, it might not be worth it if you want to have an open trade; however, if you are just holding the stock, this is an incredible windfall. For as long as it lasts, I'll use the interest gains for monthly purchases of the stock. Can't wait to see that pile of cash deposited...
According to last CC, the adjustments they've made required capital (e.g., spare cells for Chlor-Alkali, and more leaching tanks), but should only raise production costs pennies per kilogram. I heard no indication that the maximum rate would be less (if anything, I thought they expected slightly greater recovery due to the greater leaching capacity).
What they owned up to in the call is that previously they didn't know they had the problems until they had them; therefore, when they get into unknown territory of 4K-6K/quarter, there might be problems that they haven't anticipated. They believe that the Oaktree money will allow them go more slowly and carefully and that will give them a better chance to succeed in ramp up. Of course, MCP will pay dearly for that luxury.
No one denies that MCP's fate doesn't lie in the balance. If they successfully ramp in 2015, they have a chance to succeed; if the ramp up is a replay of 2014, MCP and its shareholders be cooked.
"Making matters worse, the higher production that just boosted shares will only help to increase the company's cash burn rate. After all, Molycorp's selling, general, and administrative expenses (SG&A) and other costs still dramatically exceed the company's revenue."
Robinson ignored the fact that MCP's agreement with Oaktree requires they reach 4,000 mt for consecutive quarters by Q1 2015. That requires a ramp up. Yes, during the ramp up, MCP might lose more than if they'd kept production at a minimum, but the goal is to move through as quickly as possible and get to profitability (and to comply with Oaktree agreement), which will only arrive when they cut production costs dramatically.
They also will only succeed if they establish themselves as a reliable source for customers.
MCP's share price will rise or fall according to the progress they make towards this plan: increased production, while taking recognizable steps toward profitability.
"If you were to lend 10,000 shares..." is an illustration. I, myself, have an amount far different from 10,000.
If you wholly own your shares, your broker will need an agreement with you to borrow your securities. And at the moment, shares to short seem to be scarce, so you should be getting a good rate. Schwab is currently offering an insane 30% (for example, if you were to lend 10,000 shares, you'd get $250/month), when the average offered rate over the past few years has been about 5%.
iamzolong and SE: When I was able to pick up shares for 30 cents, I understood that MCP obviously wasn't currently humming along, churning out profits. But thank you for your screaming concern.
Any conclusions drawn?
Terbium/Dysprosium/rare HREE make up .05% of product (check Annual Report); Terbium prices at time of 2013 report and now (I just checked) are $800 kg. MCP uses Terbium for downstream products, so they will also be getting added value. If MCP gets production to 20,000 mt, then Terbium/Dysprosium would be 10 MT (10,000 Kg). At current prices, not including value-added processes, that would be approx. $6 million in revenue (if you figure a 50/50 split with Dysprosium).
The ability to process Terbium and produce downstream Terbium products will hopefully be more important in the future, as MCP purchases (or engages in agreements with) juniors with a greater percentage of Terbium in product mix.
In a post below, you write, "It is easy enough to verify what RE Mountain Pass has and what REO they are planning to extract. From a quick look up Terbium was not one of them."
You're right, it was easy, and yet you were wrong. How could you not find that information quickly (click on Annual Report, search for Terbium)?
You wrote "From a quick look up...." because you wanted cover for your "Terbium was not among them" lie.
Note: papabearrf searches the landscape for positive MCP news; much of what he posts is pretty straight ahead facts from liable/checkable sources. If you can actually debunk them, then please do.
Terbium is not a major part of MCP's business (see below). That's probably the point you wanted to make.
With MCP's history of getting investors crushed after CC's, I don't see the share price going up that much prior to substantive news and at least one CC that does not provoke major damage. Once management convinces investors they understand and can manage the plant, as well as the business plan, then SP has a chance.
As noted in a post a few days ago, Schwab is now offering owners of MCP 20% to borrow their stock. Schwab's base rate to borrow is 2%, and 4% has probably been the average.
There's absolutely no sense in posting your trades (or anyone's trades) on this message board. At any moment, there are huge amounts of investors shorting, covering shorts, buying, selling. Announcing you are doing one of those activities is meaningless, unless you offer some insight into why you are making the trade. There's always someone making and losing money. In your case, at this time, losing $. Unless you covered already, far above your 40 cents brag?