Investment is Slated to Fuel Future Growth and Pursuit of Molycorp’s Vertical Integration Plans
Greenwood Village, CO (February 1, 2012, 7 a.m. Eastern) – Molycorp, Inc. (NYSE:MCP) announced today that Molibdenos y Metales S.A. (Molymet), the world’s largest processor of the strategic metals molybdenum and rhenium, has agreed to invest approximately $390 million in Molycorp in exchange for 12.5 million shares of Molycorp common stock. The price of the Molycorp shares to be purchased were valued based on the 20-day volume weighted average share price as of the close of trading on January 30, 2012, plus a 10.0% premium. Molycorp has agreed to appoint to its Board of Directors upon the closing of the proposed investment a nominee to be designated by Molymet.
Proceeds from the Molymet investment will be retained by Molycorp for general corporate purposes and will bolster Molycorp’s strategic flexibility. The funds are expected to finance Molycorp’s future growth and will help the Company continue to pursue its vertical supply chain integration business model. Closing of the transaction is subject to the satisfaction of customary closing conditions, including the receipt of certain governmental regulatory approvals.
Headquartered in Santiago, Chile, Molymet has a market capitalization of $1.8 billion USD and is the world’s leading processor of molybdenum and rhenium. Molymet has plants in Chile, Mexico, Belgium, Germany, and China, and commercial offices in England, China, the U.S., Brazil, and Chile.
John Graell, Molymet’s Executive Chairman and Chief Executive Officer, is expected to serve on Molycorp’s Board. He has more than 30 years of experience in the metals industry, and is a highly respected industry leader with a long history of business success.
“We are very pleased with Molymet’s decision to make this significant strategic investment in Molycorp, and we look forward to having John Graell, and his wealth of experience and insight, join our Board when nominated by Molymet,” said Mark A. Smith, Molycorp President and Chief Executive Officer. “Molymet’s investment will help us pursue the growth elements of our business strategy and positions us to capitalize on opportunities that present themselves in the future.”
“We are making this investment in Molycorp because we are very bullish on the upside potential of the company, as well as the highly synergistic technologies and market positioning of our respective companies,” said Graell. “Molycorp’s vision for growth and global supply chain integration is highly attractive to us, and I look forward to working with the Company to help it achieve its long-term goals.”
# # #
FOR MORE INFORMATION:
Jim Sims, +1 (303) 503-6203
Vice President, Corporate Communications
Brian Blackman, +1 (303) 843-8067
Senior Manager, Investor Relations
Fernando Ortega, +56 2 937 6534
Vice President, Corporate Affairs
Edgar Pape, +56 2 937 6656
About Molycorp, Inc.
With offices in the U.S., Europe, and Japan, Molycorp, Inc. is the only U.S-based company that is fully integrated across the rare earth mine-to-magnetics supply chain. In addition to its current production of rare earth oxides at its flagship rare earth mine and processing facility at Mountain Pass, California, the Company produces rare earth metals, rare earth alloys (such as neodymium-iron-boron and samarium-cobalt alloys) and rare metals such as niobium and tantalum. The rare earths and rare metals Molycorp produces are critical inputs in existing and emerging applications including: clean energy technologies, such as hybrid and electric vehicles and wind power turbines; multiple high-tech uses, including fiber optics, lasers and hard disk drives; numerous defense applications, such as guidance and control systems and global positioning systems; advanced water treatment technology for use in industrial, military and outdoor recreation applications; and other technologies. For more information please visit www.molycorp.com.
With more than 70 years of experience in the ferroalloy industry, Molymet’s primary business is processing molybdenum concentrates, or molybdenite, for the obtainment and commercialization of several molybdenum final products and by-products, such as molybdenum oxide, ferromolybdenum, and rhenium. The world leader in molybdenum and rhenium processing, Molymet currently has plants in five countries: Chile, Mexico, Belgium, Germany and China, with commercial offices in England, China, the United States, Brazil and Chile. It has been listed for the past 33 years in the Chilean Commerce Exchange and, since 2010, it is a part of the IPSA index.
Safe Harbor Statement Regarding Forward-Looking Statements
This release contains forward-looking statements that represent Molycorp’s beliefs, projections, and predictions about future events or future performance. Forward-looking statements can be identified by terminology such as “may,” “will,” “would,” “could,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” or the negative of these terms or other similar expressions or phrases. These forward-looking statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause Molycorp’s actual results, performance or achievements or industry results to differ materially from any future results, performance or achievement described in or implied by such statements.
Factors that may cause actual results to differ materially from expected results described in forward-looking statements include, but are not limited to: the satisfaction of the closing conditions necessary to complete Molymet’s investment, including our receipt of necessary government regulatory approvals; Molycorp’s ability to secure additional capital to implement its business plans; Molycorp’s ability to complete its initial modernization and expansion efforts, including the accelerated start-up of the Mountain Pass facility, which management refers to as Project Phoenix Phase 1, and the second phase capacity expansion plan, which management refer to as Project Phoenix Phase 2, and reach full planned production rates for REOs and other planned downstream products; the final costs of the Project Phoenix Phase 1, including with accelerated start-up of the Mountain Pass facility, and Project Phoenix Phase 2, which may differ from estimated costs; uncertainties associated with Molycorp’s reserve estimates and non-reserve deposit information; uncertainties regarding the results of exploratory drilling programs; uncertainties regarding global supply and demand for rare earths materials; Molycorp’s ability to successfully integrate recently acquired businesses; our ability to enter into additional definitive agreements with our customers and our ability to maintain customer relationships; completion of the formation of the proposed sintered NdFeB rare earth magnet joint venture, which remains subject to the satisfaction of customary closing conditions; the proposed sintered NdFeB rare earth magnet joint venture’s ability to successfully manufacture magnets within its expected timeframe; Molycorp’s ability to maintain appropriate relations with unions and employees; Molycorp’s ability to successfully implement its “mine-to-magnetics” strategy; environmental laws, regulations and permits affecting Molycorp’s business, directly and indirectly, including, among others, those relating to mine reclamation and restoration, climate change, emissions to the air and water and human exposure to hazardous substances used, released or disposed of by Molycorp; and uncertainties associated with unanticipated geological conditions related to mining.
For more information regarding these and other risks and uncertainties that Molycorp may face, see the section entitled “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2011. Any forward-looking statement contained in this press release or the Annual Report on Form 10-K or the Quarterly Report on Form 10-Q reflects Molycorp’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to Molycorp’s operations, operating results, growth strategy and liquidity. You should not place undue reliance on these forward-looking statements because such statements speak only as to the date when made. Molycorp assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future, except as otherwise required by applicable law.