* Q1 adjusted EPS $0.18/share v Street-view $0.13/share
* New mill, separator and tailing facility online at mine
* Company now producing rare earth concentrate
May 10 Rare earth miner Molycorp Inc
posted a sharp rise in adjusted quarterly profit on Thursday
that topped analyst forecasts as both realized prices and sales
Greenwood Village, Colorado-based Molycorp said it had
started up the new mill, separator and tailings facility at its
Mountain Pass rare earth mine in California.
The company, which turned in a small net loss on Thursday on
o ne-time items, is currently mining r are earth ore a t a rate of
2,800 tons a day, four days a week.
Rare earths are used in consumer products as diverse as
Apple's iPhone and Toyota's Prius and require extensive
processing in order to take them from rocks in the ground to a
material that a technology company can use.
"We will be producing rare earth concentrate as a result of
all of these portions of the facility starting up," Chief
Executive Mark Smith told Reuters. "In terms of mining
operation, this really means that you're ready to go."
Molycorp will stockpile some of that concentrate as
feedstock for a separation plant at the mine site scheduled to
start up later this year, while it process the rest at the
mine's old facilities and at Molycorp's separation facilities in
Shares of Molycorp, which posted its results after the close
of regular trading, closed more than 1 percent higher on
Thursday at $25.43 in trading on the New York Stock Exchange.
PROFIT TOPS ESTIMATES
First-quarter adjusted profit rose to $18.3 million, or 18
cents a share, from $2 million, or 1 cent, in the year earlier
period. Analysts, on average, expected earnings of 13 cents a
share, according to Thomson Reuters I/B/E/S.
Factoring in a one-time foreign exchange loss, an inventory
writedown at its European operations and a bad debt charge,
Molycorp posted a net loss of $3.5 million, or 7 cents a share.
That compared with a loss of $2.2 million, or 4 cents a
share, in the year-earlier period.
Revenue more than tripled to $84.5 million as rare earth
sales volumes rose to 719 tonnes from 696 tonnes in the
year-earlier period. The company's realized rare earth oxide
price more than doubled to $95 a kilogram from $38 a kilogram.
GROWTH ON TRACK
Molycorp, in the midst of a $895 million modernization and
expansion at Mountain Pass, said it on track to produce some
8,000 to 10,000 tonnes of rare earth products in 2012.
The miner expects to achieve its full Phase 1 production
rate in the fourth quarter, with output of some 19,050 tonnes a
year. Molycorp will eventually produce as much as 40,000 tonnes
of rare earths products a year, depending on market demand.
China currently produces more than 90 percent of the global
supply of the group of 17 metals. The country has repeatedly
clamped down on rare earth exports, which last year sent prices
of the individual oxides, metals and alloys soaring.
Molycorp said its $1.3 billion deal to buy rare earth
processor Neo Material Technologies is on track to
close in the second or third quarter. The deal gives Molycorp
access to Neo's rare earth processing capabilities and patents.