(Recasts with share price movement, more financial details,
Aug 6 Molycorp Inc reported a bigger
loss on Wednesday but its shares rose more than 12 percent in
after-hours trading after the cash-strapped rare earths producer
announced a long-awaited financing.
Denver area-based Molycorp said it has secured a commitment
for $400 million in financing from Oaktree Capital Management, a
Los Angeles-based fund manager focused on alternative
The company's stock has been weighed down by concerns about
how quickly it is burning through cash, and the possibility it
may need to issue shares to raise more funds.
Molycorp is ramping up operations at its flagship Mountain
Pass facility in California, which it overhauled as part of a
push to improve its competitiveness. But in the first quarter
Molycorp produced less material than expected at Mountain Pass.
The company said the funding from Oaktree will be available
through credit facilities and the sale and leaseback of certain
equipment at Mountain Pass.
Molycorp will get $250 million at the close of the
financing, with the remaining $150 million available until April
30, 2016 if the company satisfies certain financial and
In the second quarter, Molycorp's loss attributable to
shareholders widened to $84.0 million, or 37 cents a share, as
sales volumes fell.
That compared with a loss of $71.2 million, or 44 cents a
share, a year earlier. The company's number of shares in issue
increased during the year.
Revenue fell to $116.9 million in the quarter from $136.1
million in the same period a year ago.
Molycorp said its adjusted loss in the second quarter was 29
cents a share. Analysts, on average, had been expecting a loss
of 28 cents a share, according to Thomson Reuters I/B/E/S.
Sales volumes fell 15 percent to 2,996 tonnes compared with
the first quarter of 2014, while average selling prices rose 16
percent to $39.02 per kilogram in the same period.
Rare earths are used in high-tech goods from smartphones to
hybrid cars, and in recent years some investors have bet that
strong demand would boost prices. Prices did spike in 2010 and
2011 when China, the world's main producer, clamped down on
exports, but when it eased controls they slumped.
Molycorp's stock jumped to $2.29 in after-hours trade from a
close of $2.04.
(Reporting by Allison Martell in Toronto and Nicole Mordant in
Vancouver; Editing by Leslie Adler and Lisa Shumaker)