Molycorp, Inc. (NYSE:MCP) (“Molycorp” or the "Company") announced today that its acquisition of Canadian-based Neo Material Technologies Inc. (TSX:NEM) (“Neo Materials” or "Neo") has officially closed, creating a global rare earth leader with a combination of a world-class rare earth resource, ultra-high-purity rare earth processing capabilities, and full 'mine-to-magnetics' vertical integration. Today's close of the acquisition follows a 99.9% vote by Neo Materials' shareholders to approve the transaction in a May 30, 2012, Special Meeting; final approval of the Plan of Arrangement ("Arrangement") from Investment Canada on June 8, 2012; and a Final Order to approve the Arrangement, also on June 8, 2012, by the Ontario Superior Court of Justice (Commercial List). Following the close, Neo Materials' subsidiaries will use the Molycorp corporate logo, with the exception of Neo's Magnequench subsidiary, which will use a Molycorp Magnequench logo. Combined, the companies span 26 locations across 11 countries, and have over 2,600 employees worldwide.
- A map showing the facility locations of Molycorp and its subsidiary companies can be seen here.
- A summary describing the capabilities of the combined companies can be seen here.
- A listing of the elements from which the combined companies will produce high-purity, custom engineered products can be seen here.
The Neo acquisition is expected to be accretive to Molycorp’s 2012 earnings and cash flow, and positions the Company to deliver strong returns in the future. The significant synergies that have already been identified, and others expected to be implemented, will further strengthen Molycorp’s financial performance beyond 2012, especially as the Company ramps up and leverages its increased production from the Mountain Pass facility."I am especially pleased with the overwhelming support we received from shareholders, regulatory bodies, and our joint global customers in this transaction," Mr. Smith added. "I believe we are better positioned today to increase the diversity of global rare earth supply, which benefits all consumers of these materials, as well as to capture an increased share of global rare earths and rare metals markets." Mr. Smith concluded: “This acquisition is a game changer for Molycorp and for our shareholders. Along with management and our board, I believe the combination of our two companies will open up new and exciting opportunities for growth in the coming years. In addition to the employees, assets, products, and customers that are part of this transaction, we have significantly strengthened our intellectual property portfolio and our high-purity processing skillsets." Smith will continue to service as President and Chief Executive Officer of Molycorp, as well as a Director of Molycorp. Constantine Karayannopoulos will join Molycorp's Board of Directors as Vice Chair and will remain active in the business. Michael F. Doolan will become Executive Vice President and Chief Financial Officer of Molycorp. James S. Allen will serve as Senior Vice President of Finance, and Treasurer, of Molycorp. About Molycorp, Inc. Molycorp is one of the world's leading rare earths and rare metals companies, and combines a world-class rare earth resource at Mountain Pass, California, with world-leading ultra-high-purity rare earth and rare metal materials processing capabilities. With 26 locations across 11 countries, Molycorp is vertically integrated across the global rare earth mine-to-magnetics supply chain. It produces custom engineered materials from 15 different rare earths, with purity levels of up to 6N (99.9999%), and from six other metals (niobium, tantalum, gallium, indium, rhenium, and zirconium) at purity levels of up to 8N (99.999999%). Through its Molycorp Magnequench subsidiary, the Company is a leading global producer of neodymium-iron-boron (NdFeB) magnet powders, used to manufacture bonded NdFeB permanent rare earth magnets. Through its joint venture with Daido Steel and Mitsubishi Corporation, Molycorp expects to begin manufacturing next-generation, sintered NdFeB permanent rare earth magnets in early 2013. The rare earths and rare metals materials that Molycorp produces are critical inputs in wide variety of existing and emerging applications, including the following: advanced transportation technologies, such as hybrid electric, plug-in hybrid electric, and all-electric vehicles; clean energy technologies, such as solar and wind power systems; energy efficiency technologies, such as high efficiency motors and appliances, compact fluorescent lights, and color displays; computing and communications applications, including fiber optics, lasers, and hard disk drives; defense and aerospace applications, such as satellites, guidance and control systems, and global positioning systems; and advanced water treatment technologies for use in municipal wastewater, industrial wastewater, pool & spa, and outdoor recreation applications. For more information please visit www.molycorp.com. Safe Harbor Statements
This release contains forward-looking statements that represent Molycorp’s beliefs, projections and predictions about future events or Molycorp’s future performance, including those regarding Neo Materials. Forward-looking statements can be identified by terminology such as “may,” “will,” “would,” “could,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” or the negative of these terms or other similar expressions or phrases. These forward-looking statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause Molycorp’s actual results, performance or achievements or industry results to differ materially from any future results, performance or achievement described in or implied by such statements.Factors that may cause actual results to differ materially from expected results described in forward-looking statements include, but are not limited to: Molycorp’s ability to successfully integrate Neo into Molycorp’s operations; Molycorp’s ability to achieve fully the strategic and financial objectives related to the acquisition of Neo, including the acquisition’s impact on Molycorp’s financial condition and results of operations, including any expected synergies and the acquisition being accretive to Molycorp’s earnings; Molycorp’s ability to secure additional capital to implement its business plans; Molycorp’s ability to complete its initial modernization and expansion efforts, including the accelerated start-up of the Mountain Pass facility, which management refers to as Project Phoenix Phase 1, and the second phase capacity expansion plan, which management refer to as Project Phoenix Phase 2, and reach full planned production rates for REOs and other planned downstream products, in each case within the projected timeframe; the success of Molycorp’s cost mitigation efforts in connection with Project Phoenix, which, if unsuccessful, might cause its costs to exceed budget; the final costs of the Project Phoenix Phase 1, including with accelerated start-up of the Mountain Pass facility, and Project Phoenix Phase 2, which may differ from estimated costs; uncertainties regarding global supply and demand for rare earths materials; Molycorp’s ability to achieve anticipated production costs and realize the cost benefits of new technologies; Molycorp’s ability to successfully integrate recently acquired businesses; uncertainties associated with Molycorp’s reserve estimates and non-reserve deposit information, including estimated mine life and annual production; uncertainties related to feasibility studies that provide estimates of expected or anticipated costs, expenditures, and economic returns; and REO prices, production costs and other expenses for operations, which are subject to fluctuation; Molycorp’s ability to maintain appropriate relations with unions and employees; Molycorp’s ability to successfully implement its “mine-to-magnets” strategy; environmental laws, regulations and permits affecting Molycorp’s business, directly and indirectly, including, among others, those relating to mine reclamation and restoration, climate change, emissions to the air and water and human exposure to hazardous substances used, released or disposed of by Molycorp; with unanticipated geological conditions related to mining; the effects of adverse general economic and business conditions; the rate of exchange of the U.S. dollar to the Canadian dollar, the Japanese yen, the Chinese Renminbi and the Euro; unexpected actions of domestic and foreign governments; and various events that could disrupt operations, including natural events.
For more information regarding these and other risks and uncertainties that Molycorp may face, see the section entitled “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 and of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012. Any forward-looking statement contained in this press release or the Annual Report on Form 10-K or the Quarterly Report on Form 10-Q reflects Molycorp’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to Molycorp’s operations, operating results, growth strategy and liquidity. You should not place undue reliance on these forward-looking statements because such statements speak only as to the date when made. Molycorp assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future, except as otherwise required by applicable law.