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Jack Lifton

 
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  • Tesla's Q1 Earnings, An Epic April Fools Prank [View article]
    John,


    I'm so old that I actually heard Bertrand Russell say that philosophers and other soothsayers only get famous 50 years after their deaths. Combine that with "a fool and his money are soon parted" and "too soon, old, too late smart" and you have all you need to know to understand why Tesla, Fisker, and Next will not even be footnotes in the very near future. They are all a type of vehicle (in both senses) to funnel taxpayer money to connected elites of the ruling party of the moment. They are not game changers, they are game players.
    Apr 26 12:39 PM | 7 Likes Like |Link to Comment
  • Rare Earth Weekly [View article]
    I assume that you made a Freudian slip when you identified Rare earth Miners as "Minors" consistently in your article. Outside of mainland China there are very few rare earth miners. Lynas, Molycorp (I think), a Brazilian or two, an Indian or two, and perhaps some small operations in southeast Asia that are not rare earth mines but are places where heavy rare earths are recovered as byproducts of base metal mining. There is absolutely no point whatsoever in mining rare earth if you cannot process them through at least the separation stage to CUSTOMER SPECIFICATIONS. Also there is no economic driver (demand) to justify the ENORMOUS expense of mining the DEEP sea bottom for ANYTHING yet.

    The market is CORRECTING as dictated by the law of supply and demand.

    Stop writing glibly as if you understand the technologies here or the demand market. You do not.

    The junior minors (excuse the redundancy) are mostly sunk as junior miners.
    Apr 23 02:57 PM | Likes Like |Link to Comment
  • Molycorp: Recent Capital Raise Poses Reputational Risk [View article]
    Not true.

    There is also the effect of unsalable inventory that has to be re-worked due to not meeting the customer's spec or being contaminated. This happened when Molycorp restarted the original plant, and IF it is happening again it is VERY serious.

    Neither Molycorp or anyone else outside of China plans on selling high purity separated rare earths INDIVIDUALLY. The market for them is customer designed specialized composites such as La-Ce for fluid cracking catalysts and Neodymium-praseodymium (didymium) for magnets. The only commodity material they might make is cerium oxide for glass polishing, but that is a low value very competitive product. SorbX is their only hope to get some added value from cerium.
    Apr 22 10:52 PM | 4 Likes Like |Link to Comment
  • Molycorp: Recent Capital Raise Poses Reputational Risk [View article]
    Gentlemen,

    I enjoy reading your tales of market gamesmanship, in which you try to make money off of each other and off of those who consider Molycorp just another game in the casino.

    In fact none of you understand the problems of building or operating a very large solvent extraction plant to separate the rare earths not only from each other but in mixtures and ratios that are CUSTOMER specified. Sovent extraction planst are not meant to be turned on and off with a light switch. They must be run with a DEFINITE output spectrum in mind. If Molycorp is building inventory it is either because their customers cannot or will not take material or they are making a generic material on speculation. If the designated customer does not take the specified material it will only be sold at deep discount, if at all.

    Please keep playing your market games, but do not purport to understand the operations of an industry that is a specialist business which you do not understand.
    Apr 22 10:38 PM | 5 Likes Like |Link to Comment
  • 3 Highly Shorted Stocks Being Bought By Insiders [View article]
    I am confused by your description of Molycorp. You say that it " Focuses on the production and sale of rare earth oxides from stockpiled feedstocks in the western hemisphere."

    In 2009 When I visited Mountain Pass I was told that it had 22,000 tons of 70% ore concentrates on hand produced before 2002, and that it was processing enough of this to produce nearly 4,000 tpa of lathanum, cerium, and didymium "oxides." Surely this material has been exhausted. So, from where are the stockpiles coming. Are they mining again? If so then is mining output greater than separation capacity? If so what is the size of the stockpile? If not , what is going on there?

    I do not understand from Molycorp's public announcements from where the inventory is coming in any case. Is newly produced ore concentrate being characterized as an inventory of contained end-products? Is this a common practice?
    Apr 18 01:59 PM | 1 Like Like |Link to Comment
  • Molycorp Is Worth $2.21 [View article]
    Raven,

    You're correct about Molymet, and the deep-pockets premise is well taken, but keep in mind that Lynas has brought in a 22,000 tpa SX plant from a green field for much less than Molycorp seems to have spent for the completely new 19,700 tpa at Mountain Pass. I admit that it is hard to know exactly how much MCP has spent on Project Phoenix alone, but even when you back out the cost of acquiring Neo the number is very high. Now if in fact CK can get his operating cost down to USD$6.00/kg then he will have one of, if not the cheapest OPEX of any plant of its type, perhaps in the world. But for now the Chinese are holding that title. Note also that If Lynas is on target with its OPEX it will be neck and neck with MCP

    We are obsessed in the USA with Molycorp, but the rest of the world notes that Mt Weld is, like Mountain Pass, a huge deposit with a grade perhaps 50% higher than that of Mountain Pass (Note: The direct comparison is mis-leading in that they are of different minerologies). This means that for practical purposes that Lynas says it need process much less ore, fpr example than Molycorp, to recover its 22,000 tpa. The world's senior rare earth geologist who is also the world's leading authority on rare earth mineralogy told me a few years ago that he knew of at least 7 deposits outside of China that were world class if a method could be worked out to crack (extract the metal values from) the mineral eudialyte. I personally believe that particular cracking problem has now been solved, and that we will be hearing much more about this in the near to mid-term.

    The market seems to have fallen out of love with metal mining/refining ventures in general, so that those who still must raise a lot of cash are in peril. Experienced financial and technical management allied with a top flight administrator is the buy-in for not only success but survival. Molycorp is playing catch up in all of those categories, but I admit I like what it has done with CK and his new team.

    Good luck to you as an investor in the RE circus.
    Apr 8 07:55 PM | Likes Like |Link to Comment
  • Molycorp Is Worth $2.21 [View article]
    Raven,

    Indeed it is possible that some consumers would pay a premium for non-Chinese REEs, but since the world's principal consumer of REEs is the Chinese civilian industrial economy it is not likely. The second biggest users of REEs, the Japanese, were always interested primarily in price. I remember being told there less than two years ago that the Chinese were a problem for everyone but the Japanese and that there was, for them, with their special relationship, no security of supply issue.

    The problem facing Molycorp is that there is not really a shortage of good deposits of the light rare earths outside of China. Molycorp's perceived advantage was that as the one time largest producer of light rare earth raw materials, and some next step downstream separated products, such as didymium, it was assumed that bringing it back to that point would be easy and it would have the advantage of needing only the CAPEX to bring it back on line.

    The mistake at this point, I think, was to decide that somehow the existing Molycorp separation plant needed replacing, not refurbishing, by a giant size "advanced" plant, which it turns out is not only not cheap but hard to bring on line and chock full of new problems.

    I assume that you, in 2007, would not have believed that REE prices would rise, but I did, and I told Mark Smith in 2009 that I thought that just bringing the existing plant up to its design capacity-I do not think that had been done for more than 25 years-could produce enough profit to justify the then expenditure of the 80 million his group had made to acquire "Molycorp," Mountain Pass. He told me that they had big plans and that Molycorp was going to again be the biggest producer of REEs in the world (light REEs).as it had been in 1984. I think that both Smith and I have been consistent in promoting our different visions of the best way for a junior to proceed in the current REE market. There was no mention whatsoever in 2009 of entering the total supply chain as a participant at all levels.

    I remember asking a Star Trek author how much a Galaxy Class starship massed. I noted that just as a guess I would say that the 400 man/woman/being crew were cruising the galaxy surrounded by several thousand tons of ship and that today putting such a mass into space, let alone a fleet, would require a healthy percentage of our gross national product. She told me that even if that were true it was a matter of poetic license.

    The Chinese took a generation to bring the total of their production in dozens of mines and separation plants for LREEs in Inner Mongolia up to 50,000 tpa. Isn't it just poetic license to assume that we can do the same in a short while?

    In my old age I have begun to enjoy the enthusiasm of the young untempered by experience or the limits of economics. If only Congress would repeal the laws of supply and demand and of gravity. But alas they are too worried about being re-elected and of their toupees flying upward if they repeal gravity.

    I'm sure that there is still money to made in trading shares of MCP; I'm just not so sure that MCP will add to the world's supply of LREEs.

    If you don't like all of my opinions that's fine. I appreciate you're reading and commenting on them in any case.
    Apr 8 04:02 PM | 4 Likes Like |Link to Comment
  • Molycorp Is Worth $2.21 [View article]
    You gentlemen do realize, right?, that Molycorp or any other business has to produce goods/services for less than the selling price in THEIR market. Notwithstanding your playful banter about how YOU will make or lose money through puts, calls, intangible good will valuations, and professionally written press releases this "making it for less and selling it for more" is exactly what Molycorp has not yet achieved on a consistent basis. You also seem to think that the marketplace is just waiting for Molycorp and no other competitor exists that can challenge Molycorp if and only if it becomes profitable.

    The stock market plays with itself most of the time, and share valuations are less and less intrinsic as the time from the IPO lengthens.

    I wish all of you luck in making money in the casino, but I think in the near term that you will make it from the game not from the intrinsic value of this company or of its products.

    The rare earth end user market is highly specialized. Product specifications are driven by customer's requirements. Building an inventory can mean that the customer has changed his requirement or simply cannot afford to buy as much as you are producing, or, is out of business. How do you mark to market an out-of-spec material? At first the same way you value last year's model car, then the way you value old meat after you cannot afford to refrigerate it.

    All of you are using the de Beer's model for inventory. I would use the American Beef Association's model, personally. First, dog food, then doo-doo (composting material)

    I think that the rare earth juniors (exploration companies) went into the market ass-backwards. First they should have all looked at the market to see what was needed, and then to see HOW THAT NEEDED PRODUCT WAS PRODUCED. Then they needed to survey the market and see what the customers would pay for these products, and if there were a premium to be gained from better quality, reliability, and security of supply. Then they needed to determine EXACTLY where they needed to enter the market to make a profit and to provide enough return to their early investors and creditors.

    As far as I can determine they all used only the field of dreams' model: "If I dig up this stuff they will buy it. (This model is also used by all junior gold miners)".

    Molycorp to me was a classic of the above type. It first hyped a USA "military NEED," which has turned out to be, with almost no fanfare, just 150 tons a year of rare earth permanent magnets. Then when that actual demand itself turned out to require and critically need 7 tons a year of dysprosium Molycorp simply ramped up its projected production to 50,000 tons per year, in which, with 100% recovery (impossible, of course) it would produce (surprise) exactly 7 tons of dysprosium per year. Then when the 50,000 ton level's absurdity filtered down to the puts/calls trade Molycorp changed its business model to one of a total supply chain , and purchased Neo materials for twice the value it would have just 6 months later.

    I note that there is no Chinese competitor YET to the total supply chain model. But there will be one if Chinese rare earth businessmen determine that they can cut costs and make money in this fashion. So far, to the best of my knowledge, THEY HAVE NOT SO DETERMINED as of this writing!

    I wish you sincere good luck. The founders of Molycorp made at least two billion dollars playing the market game. I actually hope the company survives, but I know that in its present state survival is perilous.

    Good luck to Molycorp and to you guys in the stock market. You are NOT playing on the same field.
    I note here, to avoid, bulletin board controversy. That the Great Western model of creating a supplier of magnetic materials within the limits of in-house capability of raw materials' production is a very good one, but the volatility of the end-product pricing is not matched by a resonance in the mining and processing costs. I am concerned for their break-even point. I have never met Marc LaViere, but he looks, on paper, to have the right-stuff at this time for GW. I wish them luck also.
    Running a public company is a bitch; you have to answer questions with sound bites that can take a life-time to understand.
    I would leave Consatntine Karyannoupoulos now of MCP alone. If he can't make the colossus work then no one can. He's the best man, and he knows what to do, if it can be done.
    Enough rambling. Gentlemen man your checkbooks (or EFT stations).
    Shockwave: Please keep analyzing I really think your ideas are good.
    Apr 8 01:25 PM | 5 Likes Like |Link to Comment
  • Molycorp: There Will Be Blood [View article]
    I note that Molycorp had no problem promoting Dr Burbs's patents on processing as ones that would improve the efficiencies and costs of their operation. I am mystified by why my simple question is avoided and an ad hominem attack is mounted. Actually I admit that I am not mystified at all.

    So, now that you brought it up I ask again why was Dr Burba separated?? Did he offend the gods, or was the job he did deemed insufficient for his pay grade? (Which was the same as that of the President of the U.S.)
    Apr 5 09:54 AM | 1 Like Like |Link to Comment
  • Molycorp: There Will Be Blood [View article]
    Shock Exchange,

    The blood bath seems to be of the Friends of Mark Smith, FOMS, and that is understandable in terms of changing management and directions, but I am surprised by the fact that, even though he may have been a FOMS, John Burba's dismissal has raised such a small wave. I thought, and perhaps I am wrong, that Dr Burba was in charge of the technical aspects of Project Phoenix. Does his dismissal mean that Molycorp's Project Phoenix is not functional?

    If, as you say, the COGS is more than the selling price in the market can surpass then the company is in trouble. I do not believe that MCP has any more borrowing capacity, so it may, desperately at this point,need a new business model. I have suggested before and I do so again now: Shut the mine down and recast the American part of the company as a processing center. Focus the efforts on cracking ores by contract and tolling LREEs in California and HREEs in Neo facilities. I admit that any processing done in China will be subject to Chinese controls, but I think that China would like to have outside supplies of HREEs to relive the political pressure in China now building rapidly against monster heap leaching operations such as those in southern China at the so-called absorption clay deposits, the principal source of China's and the world's HREEs today.
    Ucore and Rare Element Resources can pick up the domestic supply slack and do not have the overhang of billions of misdirected dollars. In addition both of them will have significant HREEs in their output. HREEs are more than ever what is needed.
    Apr 4 10:06 AM | 2 Likes Like |Link to Comment
  • Are EV Dreams Going Up In Smoke? [View article]
    John,

    The key word here is "validate" A technology. In my working life in high-tech, 51 years, I have never seen such a common-senseless approach to a technology. I cannot any longer understand why anyone would buy anything at all from a company like Yuasa/Boeing that says, essentially, "we don't know what happened on the 787, but we have fixed it." Isn't it obvious that it's the manufacturing technology that is the problem. Li-ion battery development has reached a plateau or perhaps a brick wall. No one is born to be a battery engineer or an electrochemist. We cannot create experts who master these technologies by simply throwing money at promoters, or, worse, at scientists with little knowledge of business, economics, or politics. A scientists's only goal is to increase knowledge, but in our society we value money and its accumulation more than knowledge, so we get promoters in charge not scientists and engineers.
    I will fly on a 787 using a new improved Yuasa li-ion battery only when the CEOs of both Yuasa and Boeing are on the same flight. Boeing should buy simple, reliable, Duracell flashlight batteries by the ton, TEST EACH ONE, and replace them after each flight.
    I visualize Yuasa and Boeing engineers with screw drivers on each flight while company executives and so-called regulators sit in their plush safe offices and fret about their jobs and their share prices. Is that any way to run an airline( automotive company)??
    Mar 28 06:46 PM | 19 Likes Like |Link to Comment
  • Russia and South Africa, which together hold ~80% of the world’s platinum-group metal reserves, reportedly plan to create an OPEC-type cartel to coordinate exports. Like OPEC, the two countries would want to be able to create a floor under platinum prices, which would help their important domestic mining industries in terms of profitability and allow them to pay poor and increasingly militant miners better wages. [View news story]
    Canada's PGM bearing deposits are years and billions of dollars away. The issue is, as always, processing. Canada's biggest PGM related asset is Ressources Miniere Pro-Or (POI.V) which can not only recycle catalysts but also recover PGMs from low grade and even from chromite ores, both at very low costs.
    Mar 28 12:28 AM | 1 Like Like |Link to Comment
  • Molycorp Hits 52 Week Low - 'The Pain' Is Real [View article]
    Shock exchange,

    Your commentariat is trying to have it both ways. On the one hand some of them are treating the rare earths as commodities where the lowest cost producer wins. Some of these commentators also think that since downstream rare earth products are based on commodities then they are also all interchangeable. Please take account of the fact that rare earths are commodities last when they enter the separation plant. The separation plant products are CUSTOMER SPECIFIED. It is the next step in the process, the manufacturing of the next stage intermediate product from the customer specified separation plant product where the boys and men are separated. Molycorp Canada has been producing bonded magnet precursor powders and bonded magnets for a relatively long time. The value to Molycorp Canada of the Mountain Pass mining/refining operation is to make Molycorp Canada independent of China as a neodymium-praseodymium supplier. Molycorp Canada's sales will not magically rise nor will its market share until and unless its overall costs and supply insecurities go down.

    Announcements that low dysprosium or no dysprosium bonded magnets are being offered to the appliance and automotive industries doesn't mean that those industries are BUYING them. In fact those industries, even in China, are simply hedging their bets. If dysprosium is available they will use sintered magnets as they have been doing. The issue is availability and PRICE. Dysprosium below $1500/kg, if available, will remain the basis of the magnet of choice.

    It takes YEARS for new suppliers of critical components to be QUALIFIED and even then PRICE and AVAILABILITY of products that meet CUSTOMER SPECIFICATIONS are the deciding factors.

    In the rare earth business you don't mine and refine and then sell; you find out the customer needs and specifications first and then you design your system to produce the correct raw materials. Neo could always do far more for Molycorp than Molycorp could do for Neo. Keep that in mind along with the fact that Molycorp Canada is not by any means the biggest magnet producer in China; it is in the top 10 or 5. To break out of the pack without going into sintered magnets it needs a non-Chinese security of supply at a competitive price. this is the hope of Mountain Pass..I do doubt, however, that China will allow Neo to import California produced LREEs. But Neo can produce magnets outside of China; the problem will be selling those magnets in China, the world's largest market for rare earth permanent magnets.

    Mr Karyannoupoulos has a long road to hoe, but he is perhaps the only man for the job. Its really too bad that Neo didn't buy Molycorp in the first place. But you dance with the girl you brought to the party, so I wish Mr K good luck. He and the board are off to a good start in cleaning up the mess caused by marketing inexperience.
    Mar 27 10:20 AM | 5 Likes Like |Link to Comment
  • Avoid Molycorp: Inventory Overstated By $134MM [View article]
    You've hit on a key issue with rare earth junior planning. I have never liked the term "basket price," because it assumes that all of the rare earths from a deposit are equally sale-able when produced. This is not true unless a strong and credible and SUCCESSFUL marketing plan is in place before production commences! I have found to my dismay that most of the juniors were lost in a field of dreams on this issue. They assumed that they would produce ore concentrates and that would be that. As some of them learned why that wasn't going to be true they began to fantasize that hydrometallurgy consisted of only extracting the rare earths from the ore, and that any further processing to sale-able end products was easy. Then they found out that not only wasn't it easy it was very expensive. Then they found out the market was not for just any rare earth but really just for the critical ones. Then they found out that end users don't switch suppliers unless the new supplier is less expensive and extensively experienced in meeting schedules and quality requirements....and so on and so forth.

    Very few junior rare earth projects are going to survive.

    This author is absolutely correct. Business is about making profits not building inventory.
    Mar 22 11:14 PM | 1 Like Like |Link to Comment
  • Avoid Molycorp: Inventory Overstated By $134MM [View article]
    Thank you for finding the $36/kg figure.

    Now

    Note that Michael Doolan says in reference to slide 9 "our chemicals and oxides segment sold 4,631,000 metric tons"

    No matter how you measure products this is a physical impossibility. Note that just to get 20,000 metric tons of throughput at Mountain Pass they would have to move and process 250,000-350,000 tons of ore. This is a major undertaking by itself. I cannot imagine what they would have to process to get nearly 5,000,000 metric tons of PRODUCTS! This is a mis-statement clearly that no one bothered to challenge. I am now quite skeptical about this call. what is it that I am overlooking, please?
    Mar 22 09:43 PM | 1 Like Like |Link to Comment
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