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Jack Lifton  

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  • Apollo's Leon Black Seeks Backdoor Takeover Of Molycorp [View article]

    You are absolutely correct. Neo is not now nor was it ever worth what Molycorp paid. Neither was Boulder Wind for that matter.
    Jul 9, 2014. 01:19 PM | Likes Like |Link to Comment
  • Apollo's Leon Black Seeks Backdoor Takeover Of Molycorp [View article]
    SE, and other learned financiers.

    For what reason would the hedge fund want to take control of Molycorp? It must be to make some (quick?) money, right? NOT to produce products into a market in which the products may well be already in surplus, and in which their are lower cost producers with vast mineral resources, right?

    So, what come to mind is the following scenario:

    1. The fund takes control of Molycorp;
    2. The DIP, the fund, offers to reverse the Neo takeover and sell that company back to its original owner(s) among whom are Constantine Karyannoupoulos, Molycorp's recent CEO and now Chairman who, of course, has resigned from the board, so that HE IS NOT INVOLVED IN THIS DECISION.
    3. The DIP arranges financing for the NEO de-aquisition and that cash zeros out MCP's debt.
    4. MCP is now a large operational mine with a modern solvent extraction plant and much lower costs than the unwieldy conglomerate it used to be.
    5. Time's arrow raises Chinese costs to where the new Molycorp is competitive and of course it is now NON-CHINESE in any way.
    6. MCP stock goes up, Fund sells out, end of story.

    Timeline: Maybe less than 3 years.

    I'm sure that you, SE, and some of your rational commenters will tell me in the lingo of bond traders and short sellers and the like why my scenario is ridiculous, and I would like to know if in fact my scenario can be easily dismissed. So, please, have at it. Demolish this case.

    Thank you,
    Jack Lifton
    Jul 9, 2014. 08:47 AM | 3 Likes Like |Link to Comment
  • Molycorp Down Nearly 9% Mid-Day, What Happened? [View article]

    I was first advised in this manner in 2009 when at a San Francisco Hard Assets Conference I gave a talk in which I called the quest to be first to produce rare earths a "horse race." I was told later that a director of a company that I DIDN'T MENTION OR REFER TO IN ANY WAY asked his board to sue me for "not mentioning them."

    The narrow specializations today among educated people is no excuse for ignorance of the fundamental protections of the US Constitution and of Common Law. One does not libel or slander anyone or anything by stating the truth or by stating what a reasonable person would believe to be the truth. If you have a malicious intent, or are legally negligent, then it, the statement of the truth, may be actionable unless the aggrieved party is a public figure or entity such as, for example, the incompetent, ill-prepared, current President of the United States.

    In my opinion the problem at Molycorp is a misguided original business model that was, itself, changed beyond recognition by opportunistic short-sighted "corrections." The market, I believe, is reacting to the outcome of a poor business model. Many people believe that the Molycorp malaise has been caused by the general decline of the market's interest in natural resource "plays." In either case of causation the outcome is the same.

    Sue me if you don't agree.

    Jul 3, 2014. 10:06 AM | 1 Like Like |Link to Comment
  • Molycorp Is Worth $1.60 Per Share [View article]
    Mr Berger,

    Let's hope that Mr Bedford has asked for possession of the actual share certificate(s). They will then serve as a souvenir of the highest paying job he should and will ever have had. Can you, or any of the others commenting here, give me some data on what the CEOs of the rare earth juniors are earning while, like the producers, Molycorp and lynas, they do not produce any profits?


    Jack Lifton
    Jul 2, 2014. 03:19 PM | Likes Like |Link to Comment
  • The Dangers Of Following Celebrity Stock Picks [View article]

    I have not written a word about Great Western in several years. I was enthusiastic when Great Western devised the first mine to market strategy among the rare earth juniors, but the purchase of LCM was the high point of that strategy and the company has not since managed to achieve what I thought it could. I never received any compensation from GW, and, in fact, I bought its stock at .15 and still held it at .43. I sold at considerably lower than .43, and I have not taken any other positions in any juniors.
    Since you have lost your respect for my opinions I must admit I am of the same mind regarding your opinions about my opinions.
    Molycorp is not a financial institution offering the possibility of a return to those who play its shares in the marketplace. It is a natural resource producer that has not been able to produce its products cheaply enough to make a profit. The only possible salvation for it is would be to be able to sell its products at a profit margin high enough to allow it to retire its debts and maintain a working capital level substantial enough to allow it to continue in business without further borrowing. I doubt that it will survive, because I don't see it becoming competitive in its core markets anytime soon.
    Jun 26, 2014. 09:24 PM | Likes Like |Link to Comment
  • Grid-Scale Energy Storage; Why Working Capacity And Cycle Duration Matter [View article]
    Jun 25, 2014. 08:13 AM | 4 Likes Like |Link to Comment
  • Molycorp: 4 Reasons Why Bondholders Are 'Mullets' [View article]
    Ibot Vested,

    No, because then I would be called a shill for those companies. I get paid by mining/refining clients as a business operations and marketing specialist. I cover the technology metals, of which the rare earths are the largest related group. My paying clients cover the gamut of resources and stages of development. I believe that I am very selective in choosing clients in that I don't want to waste their time or mine if I feel they have little chance of success is PRODUCING and SELLING products.

    My web based information company, Technology Metals Research, LLC, is a partnership between me and Dr Gareth Hatch.

    I operate individually and write publicly as Jack Lifton, LLC, so that TMR can remain neutral.

    Jun 20, 2014. 10:34 AM | 3 Likes Like |Link to Comment
  • Molycorp: 4 Reasons Why Bondholders Are 'Mullets' [View article]

    If you write "Molycorp [is one of many companies that] mine(s) rare earth minerals....." Then say that "I find it [sad not] funny how they are incapable of turning over a profit." You will have understood their problem
    Jun 20, 2014. 09:37 AM | 1 Like Like |Link to Comment
  • Moody's Cuts Molycorp To "Caa2," Notes Debt Level May Be Unsustainable [View article]

    You are exactly right. The survival of ANY mining venture is based on its being competitive in its market at the TIME and PLACE (downstream distance of its "product") it enters that market. The share price of a non-profitable, untested-by-success , venture is only relevant to its (the share price's) impact on whether or not the company can raise OPERATING capital to shore up shortfalls due to its non-profitablilty.
    The rare earth sector's recent history shows that it is operating as just another type of casino chip source in the gaming universe that the stock market has become. Of all the rare earth IPOs in the last 10 years only Molycorp and Lynas were large enough to fund their (at the time announced) development to profitability models. Both original models were flawed and both have failed. Both are trying to operate as patchwork quilts of ideas about markets and products.

    The global market needs rare earths, heavy rare earths in particular, in order to produce more consumer products. I think that the smaller rare earth ventures have learned the lesson of too big to succeed from Molycorp and Lynas, but in the near term that won't impact China's monopoly position.

    As far as your point that "...Erudite discussions about the fundamentals of the company seem to have little predictive value for stock pricing,...," I personally do not believe that stock pricing has much, if anything, to do with production that could arise from flawed business models.
    Jun 20, 2014. 09:29 AM | 1 Like Like |Link to Comment
  • Moody's Cuts Molycorp To "Caa2," Notes Debt Level May Be Unsustainable [View article]

    In the article at the link, from May 29, 2014 you said:

    " recycling wastewater from Molycorp's separation processes, the company is expected to become the low-cost producer of rare earths. However, that best-in-class production cost is predicated on production volume of 19,000mt to 20,000mt, which Molycorp has not come close to reaching...."

    This was all based on the "narrative" that completion of a "chlor-alkali" plant was somehow going to produce the miracle of "recycling waste water..." In fact it was that this operation was taking so long and generating so much expense [more than 35 million dollars just to dispose of waste water in the last year!] that was causing the chemical (mining) engineering world to think it was miraculous that such a F.U. had occurred after all of the money spent by Molycorp in planning and construction. It is NORMAL practice to recycle unused reagents from "waste" streams. Mining professionals read the story as incompetent management not as any miracle. Yet writers on SA and other article compendia panted breathlessly about the completion of the "chlor-alkali" plant as the path to successful LOW COST mass production.

    Share, debt, and derivative pricing manipulation cannot lower costs or maximize efficiency or correct engineering and marketing management mistakes.

    For your enlightenment you need to be aware of the fact that the Molycorp "chlor-alkali plant" excuse has become a "It was George W . Bush who did it" type of excuse in the mining world. I even actually heard a guy (a junior rare earth mining venture employee) in a bar say to a girl, "Do you want to go to my room and see if my chlor-alkali plant is working?"

    The fault lies not in their chlor-alkali plants but in themselves.
    Jun 19, 2014. 10:07 PM | 4 Likes Like |Link to Comment
  • Moody's Cuts Molycorp To "Caa2," Notes Debt Level May Be Unsustainable [View article]

    Last year JP Morgan predicted that the total demand for rare earths would be about the same in 2020 as it us now. This may be true but it is misleading, because even if it is true that the TOTAL demand for REEs doesn't change it will be also true that the relative demand for the individual rare earths will have changed dramatically. I think it is likely that the growth of the total demand for light rare earths will be static or negative for cerium and perhaps for lanthanum. The demand for neodymium, praseodymium, samarium, gadolinium, terbium, dysprosium, and yttrium will grow differently and out of proportion for each of these rare earth elements with respect to their proportions found typically in deposits which contain any or all of them. This means that the world's cerium and lanthanum demands will be met as a matter of course by those seeking to produce the critical rare earths named above. So we need to look at Molycorp really only as a producer of neodymium and praseodymium. Can Molycorp be profitable if the expense of producing cerium and lanthanum is charged as a cost against the production of Nd and la? Or, in the best case, can Molycorp sell its cerium and lanthanum for at least their costs of production. This will only be possible, of course, if Molycorp's cost of production is below that of Baotou, Lynas, and several other large scale producers of light rare earths that are in advanced development in Africa, South America, and Greenland.
    Financial manipulation of shares , debt, and derivatives do not change the above long term prognosis.
    Jun 19, 2014. 08:52 PM | 3 Likes Like |Link to Comment
  • Molycorp: Recent Insider Sales A Bearish Indicator [View article]
    Note that Pegasus and Traxys, along with RCP were 3 of the 4 "original" investors in the purchase of Molycorp from Chevron. Note also that Alan Docter was the Chairman of Traxys at the time, and, if memory serves, he was also the first Chairman of new Molycorp. The 4th original investor was Goldman Sachs.
    Jun 19, 2014. 08:37 AM | 1 Like Like |Link to Comment
  • It's Not About Discovering A Mine, It's About Discovering A Technology [View article]
    This is a great interview; it is insightful and very informative. I don't always agree with the Berrys in the details, but I find their world-view, and the conclusions they draw from it, to be solid-at least they are congruent with mine.

    Which physical materials are strategic and/or critical is dictated by the historical time and geographic coverage of the discussion. Rare earths, for example, are strategic if you believe that a world in which all information should be exchanged transparently and rapidly by any and all people must be the goal of all (worthwhile) political systems.

    This interview is not just food for thought; it is a banquet.
    Jun 18, 2014. 10:10 AM | 2 Likes Like |Link to Comment
  • Molycorp: Recent Insider Sales A Bearish Indicator [View article]
    Resource Capital was one of the original four investors in the buyout of the then moribund Molycorp from Chevron. I have been told that, in fact, Resource Capital was the "lead" investor in that deal.
    The "value" received for the 6.1 million shares cannot make any difference to Resource Capital's short term or long term revenues, so either the sale was to someone accumulating the stock, such as, perhaps, Molymet, or it was just part of a an exit strategy such as a stop-loss.
    I would read this ownership exit as a final admission of the failure of RC's original business model for Molycorp.
    Jun 18, 2014. 07:31 AM | 3 Likes Like |Link to Comment
  • Why Is Molycorp Seeking Approval For 350 Million New Shares? [View article]
    RE prices are trending today as if the last few years were an aberration. The trend line base has reset to 2007, so if you clip out the intervening years of hype, hyperbole, and bulls**t you will see the "normal" price trend for the world we live in. This trend will not save bloated entities that depended on the 2008-11 trend line for their survival and prosperity. Please everyone leave your alternate universe.
    Jun 12, 2014. 08:57 AM | 3 Likes Like |Link to Comment