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Molycorp, Inc. Message Board

votingmachine 134 posts  |  Last Activity: 11 hours ago Member since: May 12, 2004
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  • Reply to

    It's time to listen to NEW people

    by foolsmetal 11 hours ago
    votingmachine votingmachine 11 hours ago Flag

    You are new ... I grant that. But 21 posts in the first half day of ID existence? Is that wise? You know, when you are trying to establish a reputation of wisdom?

    I suppose I should be new also, but making up a new game seems rather a lot of trouble, just for a Yahoo MB cleansing.

  • votingmachine votingmachine 14 hours ago Flag

    60 million shares at $1.40 is only $84 million to cover. Does JPM even care about that kind of money? I know they were angry when their London Trader tossed away $2 billion, but if someone loses a few million on Molycorp ... that seems trivial.

  • Reply to

    Molycorp:

    by brettski.m 22 hours ago
    votingmachine votingmachine 15 hours ago Flag

    No. Not "RARE METALS". "RARE EARTH METALS".

    It is just a chemistry name for the elements that are using the 4f electron orbitals as they progressively add atomic number. As is universally pointed out, rare earth elements are not rare.

    Molycorp does sell certain rare metals. Gallium. Indium. Tantalum. Niobium. Zirconium. They sell little in volume or dollar amount of these. I have some expectation that Gallium sales will increase with the growing LED use, but the numbers are small for that sector.

    Gold and silver are completely disconnected from Molycorp metals which are for technological and industrial use.

  • Reply to

    Who supplies TSLA with magnets?

    by marcihara Apr 23, 2015 4:54 PM
    votingmachine votingmachine Apr 23, 2015 7:14 PM Flag

    Speakers ... that would be another one. No one makes an iron magnet driven speaker anymore. That just is not as good.

    But Tesla is just buying speakers (sound systems) not buying neodymium magnets and manufacturing speakers.

  • Reply to

    Who supplies TSLA with magnets?

    by marcihara Apr 23, 2015 4:54 PM
    votingmachine votingmachine Apr 23, 2015 7:11 PM Flag

    I think Looking610pa is probably right though that there are rare earth parts in the Tesla. I think those are probably small parts though, and are disregarded as RE's.

    The engine is not a rare earth magnet engine and the batteries are not NiMH, with the metal of the metal hydride being rare earth elements.

    But I imagine the small electric motor that moves the power windows up and down would have a permanent magnet in it, and it would also make sense if they used a lighter weight rare earth magnet motor. I don't know if they do or don't. But it would make sense. The power door locks? The same thing is likely.

    But those are relatively small things and are never going to be significant demand. Yes, in aggregate, small electric motors do add to demand, but not at the level of a large motor, in a high volume application.

  • Reply to

    Who supplies TSLA with magnets?

    by marcihara Apr 23, 2015 4:54 PM
    votingmachine votingmachine Apr 23, 2015 5:50 PM Flag

    They don't use a rare earth magnet engine. They use an AC engine that generates electromagnetic fields. The advantages and disadvantages of that engine get debated a lot.

  • votingmachine by votingmachine Apr 23, 2015 12:21 PM Flag

    It is time to start thinking about the Q1-2015 results that they will report soon. I think they will most likely report on Wednesday May 13th, although Wednesday May 6th is also possible. But that is either 2 weeks or 3 weeks away.

    The CC for Q4 was extremely distressing, without any real indication that the Q1 operations were improving. So the simple estimate is to expect a repeat of the Q4 results. They presented that magnetics prices have increased in 2015, but they probably are not seeing the order book effects from Siemens yet. They can easily produce more magnetics, but the customer demand has been dwindling in recent quarters ... who knows what Q1 was like.

    They need to show Mt Pass production improvements. They were still improving the leach system at the time of the CC. They indicated that completion of the Leach system tanks was necessary to get higher production. Q4 had cash costs of $21 per kg, and production of 1328 mt. It seemed likely that they were going to have the tanks in operation by the end of Q1, but the leach system is unlikely to be supporting much higher rates than in Q4.

    Sales volume and sales prices were down quite a bit in Q4. Usually Q1 is the slower quarter, as the Chinese New Year often has an effect. Prices for magnetics could be higher, as remarked in the CC. Prices for RE's seem flat for the Q1 period.

    I'll try to look at the tea leaves at some point ... but any guesses ... now is the time to make 'em.

  • Reply to

    OPTION CHAIN TODAY, COOL

    by peppydeedee Apr 20, 2015 4:45 PM
    votingmachine votingmachine Apr 21, 2015 9:46 AM Flag

    Other than too much, I haven't really made my own estimate. I just looked around and the only estimate I see is for a loss of $0.17 per share. That would be $40 million loss. Previously, I've posted about the cash burn combination of interest, CapEx and Operating losses. I think that the CC indicated a worse result than that estimate.

    But the analysts ignore MCP as too small of a market cap anymore. The estimate might be years old. I think the cash burn has to be larger than that.

  • Reply to

    Novice needs help with options

    by michael.sanclemente Apr 20, 2015 11:35 PM
    votingmachine votingmachine Apr 21, 2015 12:15 AM Flag

    I recommend against buying options. The leverage always looks tempting, but it is generally a bad idea. If you are using options, buy in the money, and long time to expiration. With the stock price so low, a stock position makes more sense, either short or long.

    Obviously hedging is completely different options use. I am talking about taking an options position to get rich quick.

  • Reply to

    Novice needs help with options

    by michael.sanclemente Apr 20, 2015 11:35 PM
    votingmachine votingmachine Apr 21, 2015 12:13 AM Flag

    The $1 strike price is the price you can buy at (Call to you) for a Call, or the price you can sell for (Put on someone else) for a Put. The bid-ask are a per share, but the contracts are always for 100 shares. EG, a Call contract gives you the right to buy from the contract seller 100 shares at a price of $100 ($1 per share), and you pay $4 ($0.04 per share) if you buy at the ask.

    If you buy a PUT contract at $1 strike price for $0.26, then you will exercise that contract whenever the stock price is below $1. You can buy 100 shares at the current $0.83 ($83 total) and assign them to the contract seller for $100. Since you pay $26 for the contract, you only make money if the stock price is below $0.74. And with fees, quite a bit under.

    Ignoring fees, your maximum loss is $26, if the stock price is over $1, and you choose not to hand someone shares for less than the market share (you can sell at the market price of $1.01, or force someone to buy at $1, you choose). At $0.99 per share, you lose $25, at $0.98, you lose $24, etc. At $0.74 it is a breakeven deal.

    Those are sucker bets. You need a stock price drop of 10-cents to get to a profit. That is a large percentage swing. You need a stock price increase of $0.21 to make a profit on the Call (you exercise at any price over $1, and over $1.04, you start to make money).

  • 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.

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