Molycorp increases cost estimate for Mountain Pass by about $100M

theflyonthewall.com

Molycorp stated in a regulatory filing: "We have faced cost pressures in respect of our expected capital expenditures and start-up costs for the modernization and expansion of our Molycorp Mountain Pass facility and certain other capital projects at our Molycorp Mountain Pass facility. Since January, we have experienced additional cost pressures and expanded the scope of certain projects, increasing our cost estimates for the capital expenditures and start-up costs by approximately $100M. We expect the $100M increase in capital expenditures and start-up costs to be partially offset by lower than expected maintenance capital expenditures once the modernization and expansion of our Molycorp Mountain Pass facility is complete...As of September 30, we had approximately $160M of cash and we estimated that we will need to spend approximately $50M-$70M in cash to fund remaining capital expenditures at our Molycorp Mountain Pass facility, as well as $5M-$8M on other maintenance and expansion capital expenditures in the remainder of 2013 across all operating segments and $70M in 2014 for our Molycorp Mountain Pass facility, including $30M of maintenance capital and $20M for capital needs across our other operating segments. Given the current pricing environment of REEs and the other factors set forth above, we are anticipating significantly lower than expected revenue and cash flow have therefore determined that it would be prudent to raise additional financing to ensure we have adequate funding for our needs, including the capital needs outlined above, debt service and other working capital needs."

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