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Jack Lifton

 
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  • Moody's Cuts Molycorp To "Caa2," Notes Debt Level May Be Unsustainable [View article]
    SE,

    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
  • Molycorp's Convertible Notes Are Worth From 3 - 5 Cents On The Dollar [View article]
    End game,
    Thank you. I note Molymet's statement that this investment was driven by "highly synergistic technologies and market positioning." Molymet is a profitable high volume producer of molybdenum and rhenium. I suspect their goal was and is acquisition of all or part of Molycorp, and I think that since Neo was a rhenium recycler and the biggest rhenium market in the world is the USA that it was Neo that brought Molymet into the picture and that the Neo acquisition (using Molycorp money and equity) was part of a grander scheme by Molymet.

    Jack
    Jun 9, 2014. 09:00 AM | 3 Likes Like |Link to Comment
  • Molycorp's Convertible Notes Are Worth From 3 - 5 Cents On The Dollar [View article]
    SE,
    I have always wondered if Molymet had a long term strategy of offering itself to the (other?) Debtholders as a logical successor to the current Molycorp regime in case things did not work out for the original group and bankruptcy loomed or occurred.
    Jack
    Jun 9, 2014. 08:10 AM | 1 Like Like |Link to Comment
  • Molycorp's Convertible Notes Are Worth From 3 - 5 Cents On The Dollar [View article]
    Does anyone know the nature of Molymet's investment? I mean did they buy just equity, or did they purchase debt also?

    Molycorp has been trending down since Molymet made its first investment. Why did Molymet continue to buy?
    Jun 9, 2014. 07:42 AM | 2 Likes Like |Link to Comment
  • Molycorp Hits 52-Week Low Of $2.44. What Happened? [View article]
    REEality,

    In China at least 10,000 people go to work every day in the rare earth mining and refining industry. In addition at least 1000 academic researchers in China study rare earth mining, refining, and utilization FULL TIME! American stock promoters keep telling us that the Molycorp SX plant is "ultra-high tech." Some reputable and experienced Chinese scientists and engineers have visited Mountain Pass in the last year or two. Has anyone seen a public article or a public or private report by an experienced Chinese scientist, engineer, or businessman comparing Molycorp's current technology with any Chinese current technology? I haven't seen one, but I have been repeatedly told in China that Mountain Pass production is of little interest or import to the Chinese market. The fact, that Molycorp has no impact on the world's largest end-user market for the rare earths, was, is , and will continue to be the real problem.

    Note please that my numbers above, 10,000 and 1,000, are very low end estimates.

    If you wish to sell ices cubes in northern Alaska at least flavor them and, no matter what, make sure they're cheaper than the locally sourced product.
    Jun 4, 2014. 01:04 PM | 3 Likes Like |Link to Comment
  • Molycorp: The Pain... The Pain [View article]
    Perspective is the key to objectivity. The market for large quantities of customer specified light rare earth industrial raw materials, as products, delivered on time, meeting the specification, and at the agreed price is at least 80%, perhaps more, in the PRC. To be competitive in that market you MUST meet the above criteria and have been APPROVED as a supplier and be supplying for a while JUST AS IN ANY OTHER MARKET FOR ANY PRODUCT OR SERVICE ANYWHERE IN THE WORLD!
    So, the question always has been and always will be: Can an American rare earth miner be competitive in the PRC's domestic market against the domestic competition and SECONDARILY can an American rare earth miner be competitive against the PRC's RE miners/refiners in the small non-Chinese markets.
    History so far has shown that domestic American RE producers cannot be competitive in the Chinese domestic market. I think that a small streamlined American domestic RE producer of either LREEs or HREEs, preferably of both, can be competitive in the non-Chinese markets, because Chinese costs and reliability are on the one hand increasing and on the other, decreasing. But a Domestic American producer will have to be capable of sustaining a breakeven point that reflects ONLY the non-Chinese demand for TREEs.
    I think Molycorp is too large a venture to succeed in the relatively small market in which it is trying to function. I have always thought that, and I remember saying that to Mark Smith in 2009.
    May 30, 2014. 09:43 AM | 3 Likes Like |Link to Comment
  • Molycorp cash could get tight in H2, Morgan Stanley says in downgrade [View news story]
    I am intrigued by the "in the know" attitude of MS's analysts with such statements as "...because commissioning and ramping up of tanks could take one to two months; also, there is risk that new bottlenecks might emerge in the process after leach tank capacity is raised." It's clear that these analysts have never built anything not put any chemical engineering facilities into operation, since those of us who have done so know well that nothing ever goes according to plan and the risk is always that the system won't work until tweaked, if at all.
    It was obvious from the beginning that MS viewed Molycorp's plan, as they perceived it, as an outcome to be expected once enough money had been thrown at it. Now that reality has set in things don't seem so rosy. "Reality" by the way is the fact that the lowest cost producer will have as much market share as it can produce. Does MS believe that just by stating that its production costs will be lower than that of its Chinese competitors Molycorp can actually do that? Apparently so.
    May 21, 2014. 12:12 PM | 3 Likes Like |Link to Comment
  • Molycorp: Catching A Falling Knife? [View article]
    I am not saying that rare earths are not used in modern weaponry; I am saying that nothing produced at Mountain Pass is in a form useful, as produced, in modern weaponry. It is Molycorp China that produces some rare earth forms that can be used to make rare earth enabled components that are used in weaponry. The sole maker of samarium cobalt magnets in the USA for military consumption requires samarium in metallic form in its process. This I believe is bought from Chinese suppliers. Rare earth enabled components are made from rare earth metals and alloys and for military use are either samarium cobalt or dysprosium/terbium modified neodymium iron boron sintered forms. The irony of Molycorp China's magnets is that those that need dysprosium and/or terbium must buy those materials for such a use from Chinese suppliers. One of the fundamental errors of Molycorp's business model was its failure to acquire a source of heavy rare earths. This was not for lack of trying. I knew of at least four companies with which Mark Smith negotiated for the purpose of acquiring them. I was told in each case that the board turned the deal down. There is now no point in Molycorp adding the capability to separate heavy rare earths at Mountain Pass. This is the real bottleneck in its mine to magnet model, and it's probably too late to fix it. The US DoD wants a domestic rare earth total supply chain as its source.
    May 12, 2014. 11:17 PM | 2 Likes Like |Link to Comment
  • Molycorp: Catching A Falling Knife? [View article]
    I understand that. I was commenting on Spaceshuttle's comment.
    May 12, 2014. 06:43 PM | Likes Like |Link to Comment
  • Molycorp: Catching A Falling Knife? [View article]
    I am not aware of anything produced at Mountain Pass that could be used in any way by 'the US Government for defense technologies.." In fact the only Molycorp product that the US defense manufacturing industry might buy could be bonded magnets made in China by the former Neo. However it's my understanding that no such devices are bought directly by any USG agency. It is possible that some defense contractors buy components with "former NEO" bonded magnets made in China, but this would not seem like a good reason to invest in Molycorp. Most military rare earth permanent magnets are sintered types.
    I am laboring this point, because this type of broad and incorrect statement is all too common. If the writer's company buys "products" from Molycorp Mountain Pass then it is a buyer of didymium, lanthanum-cerium, or cerium oxides. If the product being bought is didymium oxide then it must be being sent to Japan or China to be transformed either into didymium metal for sintered magnets or further separated into neodymium to be made into metal for bonded magnets. If it's lanthanum-cerium then its for fluid cracking catalysts, and such la-ce mixes are ruthlessly competitive and cheap. If its cerium oxide for glass polishing it also isn't very profitable if at all against Chinese material.
    The coliseum in Rome is "pretty awesome" even though it hasn't been used for centuries.
    May 12, 2014. 06:01 PM | 4 Likes Like |Link to Comment
  • Is Molycorp A Good Pick? [View article]
    Please note well that IMCOA supply statistics are projections based on the predictions of the two non Chinese large producers, MCP and LYNAS, of what their 2016 production "will be." Added to that is the predicted production of the critical rare earths by other juniors who, unlike the producers, MCP and Lynas, have HREE themed deposits.
    The real unknown is GEOGRAPHICAL demand. We cannot predict when Chinese domestic demand for HREEs might equal 100% of Chinese produced supply. If there is no non-Chinese HREE production at that point then the global production of HREE enabled components, such as phosphors and magnets, will of necessity be in China TOTALLY, and such components will be available to the rest of the world only in and as Chinese exports. If this situation were to occur then each passing year after China reached 100% of component production would increase the PROBABILITY that such production would remain under Chinese control for a longer period.
    By the way everyone here is missing Professor Kingsnorth's (and my) view that there is no point to non Chinese HREE production, other than to increase Chinese supply to satisfy Chinese demand, unless the west revives its total rare earth supply chain!! Only ONE processing plant outside of China, Solvay Rare Earth Systems' La Rochellle facility, can separate and refine the whole suite of rare earths, and it only has a limited tolling capacity.
    The market is being very efficient in its pricing of MCP and Lynas; that is the problem for them.
    Apr 18, 2014. 09:26 AM | Likes Like |Link to Comment
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