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Alan H. Schlesinger Alan is a seasoned Wall Street professional with more than 35 years of investment banking experience. Over the last 25 years, he has held senior managerial positions in the High Yield Market with leading investment banks. From 1984 – 1986, Alan was a Managing Director in... More
  • What Is Next For Molycorp, Molymet And Plansee  4 comments
    Feb 8, 2013 1:11 AM | about stocks: MCP

    I have been a longtime advocate of Molycorp and the need for a legitimate and independent producer of rare earth metals in U.S.A. As you may remember I suggested that having to import these strategic materials was like us importing our steel needs from Germany prior to World War II. Also, I previously noted Magnequench manufacturing facility from Valparaiso, Indiana until it was moved to China. I found this provocative 2003 article which shows the lack insight that some of us show towards the need for rare earth metals then and now. http://archive.frontpagemag.com/readArticle.aspx?ARTID=19499

    The last time I checked it is hard to move a mine across borders. Many U.S. entities have foreign properties that mine and manufacture abroad and many foreign companies operate mines, factories and various assets in the U.S. None of these operations violate sovereignty laws.

    Molibdenos y Metales, S.A. (Molymet) manufactures molybdenum oxide, rhenium, iron molybdenum and other byproducts of these two chemicals. "Molymet currently supplies more than 30% of global demand for molybdenum products in a highly technical and competitive market. This has been achieved thanks to a broad network of international relationships based on its five branch companies and its commercial offices." Including Molymet Corp, Austin, Texas, and Alloy sales Co. in Weirton, WV

    Molymet's largest shareholder, 11.5% is Plansee AG develops and manufactures powder metallurgical products and components. The Company provides clean energy, medical technology, electronics, and mobility material solutions. Plansee supplies its products worldwide. Plansee USA LLC principle office in is at Franklin, MA and E/G Electro-Graph Vista, CA http://www.plansee.com/en/About-us-Production-sites-USA-PLANSEE-USA-162.htm

    Molymet has invested $525,640,104 for 32,050,700 shares with an average cost of 16.40 per share, 18.8% of Molycorp's equity and the purchased $20,000,000 of 150mm the new 5.5% convertible bond. I do not know what Molymet or their largest shareholders Plansee AG 11.5% have planned for Molycorp. But, they do bring a wealth of knowledge in the global mining and metallurgy arena. They have operated significant, successful and respected companies through difficult cyclical environments. I would believe that they understand the needs that will make Molycorp a success.

    My data and information all come from public information. But the conclusions are my own.

    Alan Schlesinger

    Disclosure: I am long MCP, OTCPK:LYSCF, OTCPK:ARAFF, OTCQX:UURAF, OTCQX:MHREF.

    Additional disclosure: Short REE and trade MCP options Puts and Calss

    Themes: Molymet, PlanseeAG Stocks: MCP
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Comments (4)
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  • vitonious
    , contributor
    Comments (9) | Send Message
     
    Interesting! When do you think Molymet will buy out MCP? And where do you see the stock price at that point?

     

    Thanks.
    9 Feb 2013, 07:21 AM Reply Like
  • asles
    , contributor
    Comments (95) | Send Message
     
    Author’s reply » They own 18.8% of the outstanding equity and $20,000,000 of the new convertible that appears that appears to be a control position. You think?
    10 Feb 2013, 11:34 PM Reply Like
  • Edward Yoxen
    , contributor
    Comments (176) | Send Message
     
    Alan

     

    If I am a Molymet shareholder (and I am not) how do I feel about the $525 million investment in Molycorp which is now worth less than 50% of what it was when the investment was made ? Relaxed ? Furious ? Puzzled ?

     

    Secondly as I understand it Molymet is a company which extracts and trades in molybdenum which is used in making high speed steels, and no doubt hundreds of other applications which toughen steel. Why would the company want to involve itself in a rather different market, which is presently controlled by Chinese producers and where the prices are falling ? Given that Molymet is based in Chile, I do not think that its first concern will be securing a non-Chinese supply of rare metals for US manufacturers ? But what do I know ? How much Japanese investment is there in Molymet, I wonder ?
    14 Feb 2013, 09:16 AM Reply Like
  • asles
    , contributor
    Comments (95) | Send Message
     
    Author’s reply » If I were a Molymet shareholder or its management, Iwould have been annoyed and disturbed by $MCP’s prior leadership’s mismanagement and asa board member: seek changes. Molyment's largest investor is Plansee AG (11.5%) http://www.plansee.com ; a global metallurgyproducer. Both understand the vagaries and nuances of mining and metals cycles.I believe these entities see the real value of $MCP. Plansee has extensive operation in the U.S. as does Molymet.

     

    It appears that there are presently no Chinese Investors in Molymet… But that could present a small risk.
    Molibdenos y Metales SA - Top 12 Holders as per Bloomberg LLP
    Holder Name Amt Held % HELD Chilean Peso
    PLANSEE LIMITADA 14,624,130 11.50 119.92BLN NUEVA CARENPA SA 13,604,493 10.70 111.56BLN INVERSIONE13,255,108.7BLN ATLANTIC SA 10,086,031 7.93 82.71BLN GABRIEL & MARY MUSTAKIS FOUNDATN 7,950,000 6.25 65.19BLN PHIL WHITE INTL CORP 5,955,018 4.68 48.83BLN ED HARVEY TRUST CORP 5,955,018 4.68 48.83BLN OSVALD WAGNER TRUST CO INC 5,954,397 4.68 48.83BLN RENTAS E INVERSIONES OCTAY 5,276,212 4.15 43.26BLN MAREA SUR SA 5,276,192 4.15 43.26BLN WHAR PLOT CORPORTATION 4,758,207 3.74 39.02BLN MINERA VALPARAISO SA 4,637,340 3.65 38.03BLN % Out 76.54

     

    Again, Molymet and Plansee are both Global Metal and Miningcompanies who are only value-added and strategic Equity holders of $MCP
    14 Feb 2013, 01:01 PM Reply Like
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