Molycorp Inc. (MCP:US), owner of the largest rare-earth deposit outside of China, reported lower-than-expected sales and cash flow for the first nine months of 2013 and said it plans to sell shares after production at its California plant fell behind schedule.
Rare-earth oxide output from the Mountain Pass facility has achieved an annualized rate of 15,000 metric tons for just “brief” periods this year, the Greenwood Village, Colorado-based company said today in a U.S. Securities and Exchange Commission filing, compared with a projected capacity of 19,050 tons.
Rare-earth prices have also been adversely affected by market volatility, the company said. Given expected lower-than-expected sales and cash flow, “it would be prudent to raise additional financing to ensure we have adequate funding for our needs.” The company is proposing to sell as much as $230 million in stock, according to a separate statement. The shares dropped 22 percent in pre-market trading.
Molycorp has tumbled 85 percent in the past two years after a decline in prices for rare earths, 17 chemically similar metallic elements used in rechargeable batteries, wind turbines and electric vehicles. The company has also suffered a series of delays at the Mountain Pass plant, which processes the commodities from the adjacent mine of the same name.
Molycorp said today it has had “limited” success in obtaining equipment financing and that while it is trying to secure a revolving credit facility, it doesn’t yet have any commitments from lenders.
Molycorp dropped to $5.54 at 8:25 a.m. in New York. The stock has fallen 25 percent this year through yesterday.
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