Molycorp Announces Pricing of Offering of Convertible Senior Notes Due 2016
Molycorp, Inc. (NYSE: MCP), the Western Hemisphere's only producer of
rare earth oxides, today announced that it has priced a $200 million
aggregate principal amount offering of its 3.25% Convertible Senior
Notes due 2016 (the 'Notes?) in an offering exempt from the registration
requirements of the Securities Act of 1933. The Notes are being offered
only to qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933. In addition, Molycorp has granted the initial
purchasers of the Notes an option to purchase an additional $30 million
aggregate principal amount of the Notes. The closing of the Notes
offering is expected to occur on or about June 15, 2011, subject to
satisfaction of customary closing conditions.
The Notes will be Molycorp′s senior unsecured obligations and will bear
interest at a rate of 3.25% per annum, payable semi-annually in arrears
on June 15 and December 15 of each year, commencing on December 15,
2011. The Notes will be convertible at any time into shares of
Molycorp′s common stock, cash, or a combination thereof, at Molycorp′s
election. The conversion rate will initially be 14.0056 shares of
Molycorp common stock per $1,000 principal amount of notes (equivalent
to an initial conversion price of approximately $71.40 per share of
Molycorp′s common stock), subject to customary adjustments. The Notes
will mature on June 15, 2016, unless earlier repurchased or converted in
accordance with their terms prior to that date. Molycorp will not have
the right to redeem the Notes prior to maturity.
Molycorp expects to use the net proceeds from the offering to fund its
original Phase 1 production capacity plan as well as its Phase 2
expansion plan at its Mountain Pass, California processing facility. Any
remaining net proceeds will be used for general corporate purposes. With
this offering, Molycorp has raised nearly $800 million of proceeds that
will be used to fully fund its original Phase 1 production capacity plan
as well as its Phase 2 expansion plan at its Mountain Pass, California
processing facility, the cost of which is currently estimated at $781
million.
The Notes and the shares of common stock issuable upon conversion of the
Notes have not and will not be registered under the Securities Act of
1933 and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration
requirements. This press release shall not constitute an offer to sell
or a solicitation of an offer to buy such securities and is issued
pursuant to Rule 135c under the Securities Act of 1933.
About Molycorp
Colorado-based Molycorp, Inc. is the only REO producer in the Western
Hemisphere and currently produces more than 3,000 metric tons of
commercial rare earth materials per year. In addition to its flagship
rare earth mine and processing facility at Mountain Pass, California,
Molycorp also owns a controlling interest in the Estonia-based Molycorp
Silmet AS, which has a production capacity of 3,000 metric tons of rare
earth products and 700 metric tons of rare metal products annually and
is one of the largest rare metal and rare earth metal producers in
Europe. Additionally, Molycorp owns and operates Arizona-based Molycorp
Metals and Alloys, one of the leading producers of high-purity rare
earth alloys and metals outside of China. Following the execution of
Molycorp's 'mine-to-magnets' strategy and the expected 2012 completion
of Phase 1 of its modernization and expansion efforts at its Mountain
Pass, California processing facility, the Company expects to produce at
a rate of approximately 19,050 metric tons of REO equivalent per year
from Mountain Pass. The Company expects to achieve an annual production
capacity at Mountain Pass by the end of 2013 of approximately 40,000
metric tons of REO equivalent per year after the completion of Phase 2.
Molycorp intends to provide to the market a range of rare earth
products, including high-purity oxides, metals, alloys, and permanent
magnets. The Company currently sells products to customers in Europe,
North and South America, Asia, Russia, and other previous nations of the
Soviet Union.
Molycorp Contact:
Molycorp, Inc.
Jim Sims, Director of
Communications
1 (303) 843-8067
Jim.Sims@Molycorp.com
or
Investor
Relations:
ICR, LLC
Gary T. Dvorchak, CFA, Senior Vice
President
1 (310) 954-1123
Gary.Dvorchak@icrinc.com