Molycorp Loss Widens On Costs, Lower Prices; Stock Down - Update

(RTTNews) - U.S. rare earths miner Molycorp Inc. (MCP), Thursday reported a wider-then-expected loss in the second quarter, as operating expenses exceeded revenues and the company grappled with falling prices for its products.

The announcement had a debilitating impact on Molycorp shares which lost 13 percent in after-hours trade.

Rare earths are difficult-to-mine materials used in a range of personal, commercial, and military electronics. Past export curbs by China, a leading producer of these materials, had lifted prices which have since fallen as the Asian giant has relaxed supply norms.

Molycorp, meanwhile is betting high on its key Mountain Pass rare earth mine in California and is boosting production and cutting costs.

"We are seeing increasingly bullish signals from customers across several segments for product demand, and increased demand will coincide nicely with increased production capacity at Mountain Pass...," said Molycorp CEO Constantine Karayannopoulos.

Greenwood Village, Colorado-based Molycorp reported a second-quarter net loss to common stock of $71 million or $0.44 per share, compared with a net loss of $67.6 million or $0.71 per share last year.

Excluding items, loss for the quarter was $60 million or $0.36 per share. On average, four analysts polled by Thomson Reuters expected a loss of $0.23 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenues for the second quarter climbed to 137 million from $105 million in the prior year, but missed analysts' expectations of $157.56 million.

Molycorp sold 3,039 metric tons (mt) of product during the quarter, up from 1,692 mt a year ago. However, average selling price for resources, chemicals and oxides, and magnetic materials and alloys came under intense pressure.

The company said its Mountain Pass facility demonstrated an operating capacity in excess of 15,000 mt per year of rare earth oxide equivalent, making it one of the largest such processing facility in the world.

The company's stock closed Thursday at $7.41, up $0.35 or 4.96%, on a volume of 11.5 million shares. In after hours, the stock dropped $1.03 or 13.90%.