chihawk's  Instablog

Send Message
  • More Facts Please, Molycorp Minerals 6 comments
    Feb 11, 2011 11:11 PM | about stocks: IQ
    OK look, enough is enough. Molycorp Minerals just announced a $50 price on its new shares and the stock opened and stayed well below $50. It closed at $47.77. Now, most of the readers here are little guys, but many media writers are with the bigger guys (firms and brokerages). All the writers have hyped Moly more than any stock I have ever watched. And now they might be getting out and leaving the little guys holding the bag.
    Moly might be a good stock in two years. But for now I am exhausted with the continuous hyping of the stock without any additional facts. I mean if you Google Molycorp you will hear the same thing over and over about Moly. If you read a thousand articles on Moly you will learn a great deal about the rare earth industry, but almost nothing about Molycorp. I have learned almost nothing beyond the fifteen minute presentation and soft Q & A on their web site. I don’t know who to blame, but this is starting to seem bizarre. I mean does everyone turn into Jack Nicholson in the typing scene of The Shining when they write about Moly?
    Molycorp makes wild claims about great cost savings. These seem to be based on recycling that is not patented or new from what I can tell. They claim two power sources which could be a benefit, but those of you in California know that power is not cheap so how will this really be that big a breakthrough. They promise a whole new processing plant that will produce 40,000tpa of rare earth when it’s finished. What’s the most they ever produced before being mothballed? How many tons are in long term contracts? Anyone seen a slide, diagram or artists drawing of these facilities or technologies? Feel free to post a link. Contrast this with the information on XSORBX an established, patented and clearly defined Molycorp achievement and the difference is striking.
    Molycorps’ other claim to fame is “mines to magnets”. They have said they will JV for the magnets, which is OK. But what about turning the oxides into metals for the magnets? In their presentation, in true Moly fashion, they show the cost savings, but not where or how they will make the metals. If you go by what they show you and not what they promise they appear to be doing the same thing as Lynas Corporation. Which I would be fine with, but Moly hypes the story one more level than offers no further proof.
    I’m not saying they are lying or spinning conspiracy theories. But this is getting ridiculous. And at nearly ten times book and a mega million dollar 2-3 year project away from reliable revenue I’m concerned. And based on how the new shares are trading, what happens if Moly’s project goes over budget? More shares might be tough. But I’m pretty sure a banker would ask some of the same things I’m asking now. Would Moly be able to give answers them?

    Disclosure: Currently no position in Molycorp Minerals with no plans for a position
    Stocks: IQ
Back To chihawk's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (6)
Track new comments
  • abfrbe
    , contributor
    Comments (31) | Send Message
    I completly agree with you, but I have just a question regarding your MCP position.
    Why in your 02/04 article's disclosure you said you're long on MCP and just 6 days after you're saying you have "currently no position in Molycorp" ?
    What event made you sell all your position ?
    14 Feb 2011, 09:06 AM Reply Like
  • chihawk
    , contributor
    Comments (2083) | Send Message
    Author’s reply » abfrbe,
    I have asked questions of MCP with no response. I guess they don't answer private investors. That was part of it. The other key is valuation. Moly's promises are so far in the future that it seems forced to trade on momentum until we see greater progress on their production.
    So it was not really an event. It was more of a determination that Moly is just too far ahead of itself. And for me that is getting more extreme as I see further questions and no further explanations.
    I think listening to Nicholas Curtis' (Lynas' CEO) clear, measured and fact based approach and contrasting it with all of MCP's "pie in the sky" ambiguity also changed my view. I've traded miners forever. I've learned not to accept too much pie in the sky dreams. And at this stage, Moly needs to put some meat on the bones. I think their dreamer approach is starting to feel irresponsible.
    14 Feb 2011, 11:36 AM Reply Like
  • omgwen3rds3
    , contributor
    Comments (354) | Send Message
    Chihawk, i know from first hand experience if you send Nick Curtis a private email he will always answer PERSONALLY. I havea lot of respect for this man. He has done it with SinoGold and he will do it again with Lynas.
    17 Feb 2011, 09:45 AM Reply Like
  • abfrbe
    , contributor
    Comments (31) | Send Message
    I share your comment on MCP vs Lynas approach
    Lynas seems to be a better investment for me also
    Thank you for your quick answer
    14 Feb 2011, 12:45 PM Reply Like
    , contributor
    Comments (6) | Send Message
    Molycorp trades like sex.


    DR J
    20 Feb 2011, 05:21 AM Reply Like
  • wmcraigbarnard
    , contributor
    Comments (206) | Send Message
    Isn't MolyCorp the company hyped by Chris Mattai at The Oxford Club?


    I contacted the company and asked them some questions about their future sales and mining of Thorium. After getting my answers I called OC and tried to reach Mr. Mattai. He was supposed to call me back and never did.


    I'd check any promotions OC does by contacting recommended companies. Have prepared questions and be professional or business like. ((My comments are general and intended for all who read.))


    Mattai was promoting Moly Corps mining site as a massive holder of Thorium. It was supposed to replace Uranium. The story was pretty interesting and was actually enticing. The only problem, The company has absolutely no plans to commercialize Thorium. According to a person at the company (I wont provide a name or department. Just did that in another place and idiots called that corporate officers company and asked stupid questions using incorrect information they screwed up. I no longer have the contact) California has reviewed the material and it isn't a grade that can be commercialized. I lived in CA. It's a royal pain. What can't be done there can be accomplished in other places.


    Now I have to say, after my conversation I realized something was said that I missed during the conversation. That comment was "we wouldn't process it here". That raised some additional questions like, Is the company going to continue to accumulate massive piles of the stuff and store it on site? Will you contract with others to remove and process the material? Would you hire or contract with a subcontractor to commercialize the product?


    Without Thorium the company reached very nice price levels in the past. It could again IF the world economy picks up. If Moly Corp doesn't gather steam this year it's a clear sign the economy is still troubled.


    Regardless, in it's normal course of business activity the company has assets and business value that will produce support for increased share price over time.


    I believe the company also had some legal issues. Shareholders apparently were stunned by the companies sudden share price decline several years ago. Again, I believe, the company was hit hard by declining economic conditions.


    Now they have streamlined many area's of the company's operations and added additional upgrades to their processing plant infrastructure.


    To all outward appearances the company is set to grow share value significantly


    That is this mans >>>opinion<... .
    18 Apr 2014, 02:43 PM Reply Like
Full index of posts »
Latest Followers

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.