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January 23, 2013
08:00 EDTMCPMolycorp sees 2013 cash shortfall of $250M before proposed offering
In a regulatory filing, Molycorp (MCP) updated investors with respect to its current operations and capital needs, including with respect to its Mountain Pass, California rare earth mine and processing facility. In November 2012, the company disclosed the aggregate cost of Project Phoenix Phase 1 and Project Phoenix Phase 2 was estimated to be approximately $1.25B and expected $90M of other capital expenditures at Mountain Pass, for total capital expenditures at Mountain Pass of $1.34B. The company currently estimate that Project Phoenix will cost an additional $80M to complete. As a result, expected capital expenditures for Project Phoenix and other capital projects at our Molycorp Mountain Pass facility total approximately $1.42B. Molycorp added, "During the fourth quarter of 2012, our revenue and cash flow from operations were significantly less than originally expected...Estimated sales volumes for our four reportable segments, Resources; Chemicals and Oxides; Magnetic Materials and Alloys; and Rare Metals, totaled approximately 3,200-3,400 mt as compared to our prior estimate of approximately 6,100 mt...Given the combination of ramping up toward our initial planned run rate of 19,050 mt per year at our Molycorp Mountain Pass facility and the current pricing environment of REEs, we are anticipating significantly lower than expected revenue and cash flow for the first half of 2013 and have therefore determined that we need to raise additional financing to ensure we have adequate funding for our needs. Based on our current estimated revenue and cash flow, we presently anticipate that we will have a cash shortfall for 2013 of approximately $250 million without giving effect to our proposed common stock offering and convertible notes offering or any revolving credit facility or equipment financing."
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