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Chemical and Industrial Engineer from Purdue University. Has worked as a business consultant, and investment advisor, and at a multinational oil company.
  • #4 - The Top 10 REEsons To Buy Molycorp 0 comments
    Feb 8, 2011 10:54 AM | about stocks: IQ, REE

     4. Favorable Production Contract Terms


    First, only their smallest contract has a floor & ceiling clause, but even it is based mostly on market prices. Their newest larger contracts only have a floor clause.

    From the 1/24/11 MCP Form S-1 page 11:


    Because of market demand they were able to aggressively negotiate and protect themselves without giving up on the upside. That's a strong market. Also, none of their new doubled production has a contract at this point. When future contracts get announced one can expect the same market based prices, a protective floor clause, and no limiting ceiling.  This means that Molycorp will be able to profit from rising spot prices, and still be protected on the downside.

    Stocks: IQ, REE
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