Molycorp doubling Rare Earth Metals production, buys processor

Cubantrader from Beacon Equity posted this rare earth mining stocks update yesterday, April 4th, 2011:

Molycorp Inc. (NYSE: MCP) today broke to new high with its announcement that its wholly owned subsidiary, Molycorp Minerals, completed the acquisition of a 90.023% controlling stake in AS Silmet for approximately $89 million. This acquisition provides the first base of operations in Europe and doubles its current rare earth production capacity from approximately 3,000 tonnes per year of rare earth oxide equivalent to 6,000 tonnes. As per the terms of the transaction, the company acquired 80% of the outstanding shares of AS Silmet from AS Silmet Grupp. The 9.977% ownership interest will still be retained by AS Silmet Grupp. The company also acquired the other 10.023% from Treibacher Industrie AG.

AS Silmet will source rare earth feed stocks for production of its products from the company’s Mountain Pass, California rare earth mine and processing facility. This will make it the first rare earth oxide and metal producer in Europe that will not source rare earth materials from China. The company also will change its name to AS Molycorp Silmet as part of the transaction.

“This acquisition provides Molycorp with a European base of operations as well as a larger global customer base, greater rare earth production capacity, and an expanded product line that extends our interests into other strategic metals and technologies,” Mark A. Smith, president and CEO of Molycorp Inc. stated in the press release. “We have already begun shipping feed stocks from Mountain Pass to be processed into finished products at AS Molycorp Silmet. In the short-term, this will greatly increase our ability to supply our products into the increasingly tight global rare earth market and provide a convenient base from which to supply European customers. In the mid- and long-term, AS Molycorp Silmet will help us expand our manufacturing capabilities to a broader range of strategic materials.”

Molycorp is currently trading at $65.63. The stock is up 10.67% from its previous close. Molycorp stock touched the high of $66.20 and lowest price in today’s session is $62.55. The stock is currently trading above its 50-day and 200-day moving average, indicating bullish sentiment.

The company stock has traded in the range of $12.10 and $66.20 during the past 52 weeks. The company’s market cap is $5.42 billion.


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