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SPDR Gold Shares Message Board

votingmachine 127 posts  |  Last Activity: 52 minutes ago Member since: May 12, 2004
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  • Reply to

    OPTION CHAIN TODAY, COOL

    by peppydeedee Apr 20, 2015 4:45 PM
    votingmachine votingmachine Apr 20, 2015 5:52 PM Flag

    I think the expiration of the May contracts will be after the Q1-15 earnings report. My guess is that they report early May. Recent report dates for Q1:
    5-7-14
    5-9-13
    5-10-12
    5-10-11

    So those options are going to extend past any earnings bump or drop. I suppose if they say during the CC that they started shipping to Shin-Etsu and Siemens on April 15th, when they announced the contract, and gave a substantial amount as a projection, that there would be a stock price jump.

    Options contracts across a substantial news event like a reporting date always seem like a gamble to me. But still 50 contracts for 4 cents ... that could be big if the report/CC has any positive effect.

  • Reply to

    Shin Etsu Chemical

    by votingmachine Apr 17, 2015 9:48 AM
    votingmachine votingmachine Apr 17, 2015 10:16 AM Flag

    I have the quarterly numbers for the last few quarters on hand, not the 2014 total. But here are those quarterly numbers for the Magnets and Alloys segment:
    Q4-14
    1440 mt at $39.86 ASP for $57.4 million revenues. $13.7 million EBITDA, with $4.2 written off as depreciation.

    Q3-14
    1551 mt at $40.42 ASP for $62.7 million revenues. $13.7 million EBITDA, with $4.2 written off as depreciation.

    Q2-14
    1383 mt at $39 ASP for $54.3 million revenues. $11.8 million EBITDA, with $4.3 written off as depreciation.

    My memory is that they have had sales volumes higher ... maybe 1800 mt for a quarter? The profit margins are all above 20% for these quarters. They had an issue of high priced inventory at Neo, but I believe these quarters are beyond that inventory cut into the profit margin. I think that inventory was worked thru even into Q1-2104.

    I'm pretty sure that facility capacity for magnaquench is much higher than these sales volumes. Obviously you produce to fill the order book, and projections.

    Any increase is nice in that it is an increase in a profit segment of MCP's business. If they could get the former Neo business back up to $1 billion per year in revenue, it would re-justify that acquisition. They have been putzing along with rather uninspiring revenues for such an expensive acquisition.

  • Reply to

    Shin Etsu Chemical

    by votingmachine Apr 17, 2015 9:48 AM
    votingmachine votingmachine Apr 17, 2015 9:54 AM Flag

    Oops, my bad. I used the number for Neodymium rather than for magnets. ALWAYS CHECK YOURSELF!

    A Nd2Fe14B magnet is 27% Nd, so a 2 MW wind turbine with 500 lbs of Nd in it has about 1 mt of magnaquench in it.

    To fill the entire order book, MCP would need to make about 24,000 mt of magnaquench for Shin Etsu to process into final magnets.

  • votingmachine by votingmachine Apr 17, 2015 9:48 AM Flag

    The deal in the PR is between Siemens, Shin Etsu Chemical, and Molycorp. Siemens is interested in end use rare earth magnets for wind turbines. Specifically with lower dysprosium.

    "According to the Bulletin of Atomic Sciences, a 2 megawatt (MW) wind turbine contains about 800 pounds of neodymium and 130 pounds of dysprosium. The MIT study cited above estimates that a 2 MW wind turbine contains about 752 pounds of rare earth minerals."
    from:
    http://instituteforenergyresearch.org/analysis/big-winds-dirty-little-secret-rare-earth-minerals/

    As mentioned earlier, the Siemens order book for 2014 was 48 gigawatts of wind turbines (48,000 MW). If they can optimize to drop to 500 lbs of RE's they would need only 12,000 mt RE magnets.

    Shin Etsu is a large chemical company. They have multiple magnets but the series that is likely to be the starting point for Siemens is their N-series:

    "Shin-Etsu's N Series neodymium magnets-composed of neodymium (Nd), iron (Fe), and boron (B)-boast the highest performance of all rare earth magnets. As neodymium is relatively abundant, the cost of these devices is also more reasonable than that of comparable classes of clasamarium (Sm) magnets. Application of Nd magnets is expanding rapidly in various fields as their cost/performance advantages gain recognition. Corrosion resistance, formerly considered to be a drawback, has been improved through various types of surface processing, including nickel(Ni)plating. As a result, these magnets now deliver optimal performance for virtually any application."

    Shin Etsu is probably buying magnaquench from Molycorp's magnetics facilities. Shin Etsu can manufacture large sizes and many shapes of final magnets, with a choice of surface coatings.

    They have a nice descriptive on turning magnaquench (or other chemistries) into an oriented magnet:
    http://www.shinetsu-rare-earth-magnet.jp/e/design/

  • Reply to

    Gigafactory

    by stockrover22 Apr 17, 2015 6:43 AM
    votingmachine votingmachine Apr 17, 2015 8:38 AM Flag

    They use lithium batteries.

  • Reply to

    Large gap

    by shrtimr90804 Apr 16, 2015 10:48 AM
    votingmachine votingmachine Apr 16, 2015 11:36 AM Flag

    Some might see that as 4 million shares to sell at market price. But if all the can think of doing is dumping them, well they can always dump them in my yard.

    Every share of Molycorp is owned. Some sell. Some buy. Some hold. Oak tree would be smart to sell shares they acquire. For them, they are into Molycorp up to the eyeballs on the debt side. If I had a $400 million Molycorp debt position and another 4 million shares, I would sell the shares as fast as possible, for as much money as possible. That only seems prudent.

    And someone will buy. That is what the market is for. One investor wants money more than (additional) Molycorp position, and another wants (additional) Molycorp position more than money.

    Currently, there is a lot of buying, and the price is gapping up. That gap seems unlikely to be re-traced. The news was important. JPM is telling everyone that the market reaction is overdone. If they believe that, they can short and make money.

    It could well be that JPM is selling short, and Oaktree is selling from their overweight Molycorp investment, and the price is still rising. The buyers might be on the right side of the proposition.

    But Oaktree should sell. No doubt. Every dollar they can take off the table in a very large deal, is a dollar they can't lose. My guess would be that they don't just toss it as a market sell order for 4 million shares ... they don't seem stupid.

  • Reply to

    NOW FOR THE '''''BAD NEWS""" REVERSE SPLIT 50-1

    by blowboy45 Apr 16, 2015 10:09 AM
    votingmachine votingmachine Apr 16, 2015 10:27 AM Flag

    They will likely request approval for a reverse split as part of the next shareholder votes. They may make it contingent on share price, but it seems only prudent to have that ready, to allow continued listing on the NYSE.

    Of course we ALL know that Molycorp is registered in Delaware, and that Delaware state laws have requirements for reverse splits. A corporation registered in Delaware needs a shareholder approval to enact a reverse split.

    "If one reads the Delaware General Corporation Law trying to determine if shareholder approval is required for a reverse or forward stock split, it is not easy to find the answer, since it is not directly addressed. However, all have generally interpreted the law to require reverse stock splits, where outstanding shares are combined to a smaller number, require such approval. If you are public and SEC reporting, this means a full proxy or information statement which is subject to SEC review, delay and cost, but usually is pretty straightforward."

    The Corporation also has bylaws (thing they must do) that spell out the presentation of shareholder votes, the time of announcements for those, etc. You should read those to have a full understanding of how a shareholder vote is requested and held.

    I think most of us have resigned ourselves to the likelihood of a reverse split since the company received a de-listing notification. At this point I almost look forward to it.

  • Reply to

    Tons of material Require

    by iwish200 Apr 15, 2015 4:27 PM
    votingmachine votingmachine Apr 15, 2015 5:58 PM Flag

    "According to the Bulletin of Atomic Sciences, a 2 megawatt (MW) wind turbine contains about 800 pounds of neodymium and 130 pounds of dysprosium. The MIT study cited above estimates that a 2 MW wind turbine contains about 752 pounds of rare earth minerals."

    That is actually a little higher than I estimated. The Siemens plan is to eliminate the dysprosium. I had ballpark it as about 1 ton of magnet at 27% neodymium, or about 500 lbs of neodymium for a 2 MW wind turbine.

    That article is over a year old and I would bet that Siemens has been adapting designs to cut RE's and optimize them. So it is hard to say what the current levels needed are, or what they will be in the future. I expect the numbers will remain high though.

  • Reply to

    Magnet technology

    by votingmachine Apr 15, 2015 9:45 AM
    votingmachine votingmachine Apr 15, 2015 1:00 PM Flag

    It is just too bad that any IP in China is really not protected. Chinese magnet manufacturers were stealing the Magnaquench patent for years. And they will steal any IP that MCP and Siemens work out.

  • Reply to

    Magnets and Alloys Segment

    by votingmachine Apr 15, 2015 12:31 PM
    votingmachine votingmachine Apr 15, 2015 12:56 PM Flag

    I should correct that Magnets and Alloys are not the lone profit center. Just hey are usually the best segment for results. Chemicals and Oxides, rare metals ... sometimes the numbers are also profits there.

  • Reply to

    Temporary squeeze then back to 50 cents

    by alanmcd101 Apr 15, 2015 11:59 AM
    votingmachine votingmachine Apr 15, 2015 12:53 PM Flag

    I agree. I have been wrong many, many times. I've been right only a few times in my life ... you can ask my wife. Or my teenage daughter (dad does not know #$%$).

    Fortunately, there is no reason to rely on any anonymous poster on a Yahoo MB, even to explain that another anonymous poster on a Yahoo MB is not posting a useful basis for decision making. I'll gladly agree that you should not rely on my posts as anything other than half-baked blather.

    It is quite possible that everything I've posted as I've thought about this PR is completely wrong. Listen to rubiowho when he says I've been wrong. I HAVE been wrong. When I post under the name "GOD", then you can rely on my omniscience. Votingmachine ... not so much.

  • Reply to

    Temporary squeeze then back to 50 cents

    by alanmcd101 Apr 15, 2015 11:59 AM
    votingmachine votingmachine Apr 15, 2015 12:47 PM Flag

    Lately?!?! None. But I live in a large city, like most people. When you drive into even nearby remote areas, you see them. I just have not been driving a lot.

  • Reply to

    Magnets and Alloys Segment

    by votingmachine Apr 15, 2015 12:31 PM
    votingmachine votingmachine Apr 15, 2015 12:45 PM Flag

    If any of those numbers are correct, then if MCP was to fill Siemens magnet demand, they would have roughly 24,000 mt per year sold at about $40 per kg, for close to $1 billion in revenues per year, and over $200 million EBITDA. The worst profit margin is the Q2-14 with 21.7% margin.

    There are multiple chemistries but the base needy,um magnet is Nd2Fe14B. That calculates to 27% neodymium by weight. So the 24,000 mt of magnaquench would need about 6500 mt of neodymium.

    Mt Pass is 12% Nd and the target production is about 20,000 mt total REO. So MCP can only produce 2400 mt of Nd-oxide at Mt Pass. They can produce more via LREC shipped to Silmet and to Neo facilities. But it would be possible to have an internal customer for ALL of the Mt Pass neodymium, if Siemens wanted to buy about one-third of their supply from Molycorp. If they want more, Molycorp would have to expand Mt Pass production, or buy neodymium on the spot market.

  • votingmachine by votingmachine Apr 15, 2015 12:31 PM Flag

    The Magnets and Alloys segment is always the lone profit center in the quarterly reports.
    Q4-14
    1440 mt at $39.86 ASP for $57.4 million revenues. $13.7 million EBITDA, with $4.2 written off as depreciation.

    Q3-14
    1551 mt at $40.42 ASP for $62.7 million revenues. $13.7 million EBITDA, with $4.2 written off as depreciation.

    Q2-14
    1383 mt at $39 ASP for $54.3 million revenues. $11.8 million EBITDA, with $4.3 written off as depreciation.

    The former Neo business has a profit margin. Siemens is one of the world leaders in manufacturing wind turbines. This year Siemens announced a contract with Egypt to install 2 GW of wind turbines. I would ballpark estimate that they will need 2000 mt of magnaquench for that contract alone.

    In 2014 Siemens had orders for 48 GW of wind turbines (and they are growing that number). I ballpark that at a need for 24,000 mt of magnaquench. I'm just ball parking at 1 mt of magnaquench per 2 MW of turbine. 48 GW is 48,000 MW.

    Obviously Siemens is too large to rely on an exclusive provider. But the could be a VERY LARGE customer. If MCP filled that ballpark number, that is 6000 mt per quarter. Just scaling from current profits, that would increase the volume by a factor of 4, and EBITDA profits by the same factor. If the current customers also were retained, then the factor is by 5: 7500 mt per quarter. Call it $75 million per quarter EBITDA.

    All very back of the envelope and stream of consciousness analysis. It is extremely likely I just made math mistakes.

  • Reply to

    Temporary squeeze then back to 50 cents

    by alanmcd101 Apr 15, 2015 11:59 AM
    votingmachine votingmachine Apr 15, 2015 12:09 PM Flag

    You're deluded. Wind Turbines have HUGE magnets. They are a HUGE demand and growth in demand section of the rare earth magnet business. A single turbine can contain over a ton of magnet. When you see a big field of turbines, every one of those has a giant magnet in it. And wind farms are being installed all over the globe.

    There is actually the potential that the demand for neodymium-magnets for wind turbines could grow to exceed the neodymium supply. That probably won't happen, but a company like Siemans has shown great foresight in locking up a 10 year supply from a major supplier.

  • Reply to

    Magnet technology

    by votingmachine Apr 15, 2015 9:45 AM
    votingmachine votingmachine Apr 15, 2015 11:36 AM Flag

    Actually, they can fill this deal with the former Neo facilities in China. I think the deal is based on Neo powders made from neodymium they get from anywhere. The deal is not for neodymium oxide from Mt Pass, although ideally, the vertically integrated supply chain is that Neo buys neodymium from Mt Pass, makes Magnaquench and then sells that to Seimans. I'm sure Seimans is unconcerned if Neo buy neodymium from somewhere else ... they still get to claim they are buying from the "green" supplier, even if the "green" supplier is forced to buy dirty Chinese neodymium.

    I'm confident that MCP has adequate magnaquench capacity for the Siemans wind turbine demand. But they may be making that magna quench using China sourced neodymium until they get Mt Pass neodymium production up to targets.

    I think they need to add some "Goodwill" value back in. LOL.

  • Reply to

    magnets

    by dkoloze Apr 15, 2015 11:09 AM
    votingmachine votingmachine Apr 15, 2015 11:20 AM Flag

    Yes MCP is in the magnet business. They produce the root products, which some don't call magnets but which I do call magnets. They manufacture the rare earth magnetic powders, which are then grouped together and oriented in a magnetic field to make the final size and shape of magnet for the end use. (The powders are inherently miniature magnets of very small size).

    Some call magnaquench powders a raw material. In this case, it is not inaccurate to call it that. But you can also call it magnets. They are magnet raw materials that get assembled into large magnets.

    This isn't a mystery to me. It is simply what Molycorp has in their business units. I'm not sure that every PR needs to start with the discovery of fire and then re-visit the history of technology, so that you can exactly understand the final deal being revealed. I enjoy that sort of root history, but it is also possible to make the assumption that people know things. Or can use the google. That's what I do when I don't know something.

    The main thing people are reacting to is an important customer for an important product line. You may not understand that product line, but it does exist. I have no idea if the market reaction is correct. I do enjoy it though. Since I'm long, I'll assume it is underdone and that the future holds many more gains ahead.

  • Reply to

    Magnet technology

    by votingmachine Apr 15, 2015 9:45 AM
    votingmachine votingmachine Apr 15, 2015 11:09 AM Flag

    Does anyone know if the dysprosium adds bonding strength, as I presumed in my first post?

  • Reply to

    Magnet technology

    by votingmachine Apr 15, 2015 9:45 AM
    votingmachine votingmachine Apr 15, 2015 11:07 AM Flag

    Another source of some technical info ...
    Google: "MOLYCORP MAGNEQUENCH TECHNICAL RESOURCE PAGE"

    And then figure out how to get to the mqitechnology page. That page has a "BONDED NEO POWDER" link at the top.

  • Reply to

    Magnet technology

    by votingmachine Apr 15, 2015 9:45 AM
    votingmachine votingmachine Apr 15, 2015 11:00 AM Flag

    For more info on bonded magnets, look at the wikipedia page on "bonded neo" (google it ... Yahoo doesn't allow links).

    My understanding of the dysprosium may be incorrect. I see now that 6% dysprosium substitution for Neodymium will increase the magnetic strength and coercivity. Dysprosium nano fibers are strong, but I don't know if the dysprosium in magnets adds physical strength. Dysprosium does add chemical and corrosion resistance.

    To see some of the Magnaquench powders that Molycorp sells is not obvious on their website.

    Go to the Molycorp website and on the top-drop-down link "ABOUT US", mouse over "OUR FACILITIES", then click on "MOLYCORP MAGNAQUENCH"

    From there, the "STANDARD GRADES" link is a good one to see some powders suitable for bonded magnets.

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