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More Facts Please, Molycorp Minerals

|Includes: iQIYI, Inc. (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