Sunday, June 22, 2014

More Notes on Molycorp From Moody's $MCP

  • production run rate has been increasing, MCP is aiming to increase production rates in late 2014 to levels that would allow the company to start generating positive margins (approximately 4,400 mt per quarter)
  • Q1 2014, the Mountain Pass facility produced 1,111 mt of rare earth oxides (REO), while production for the full year 2013 was 3,926 mt.
  • Management is hoping for 23,000 mt per year by the end of 2014 which would translate to EBITDA in the $150 - $180 million range in a current price environment
  • Even with that level of positive EBITDA, leverage (Debt/EBITDA) would be ~10x
  • $236 million in cash as of March 31 but liquidity could become strained in the next twelve months, given the ongoing cash burn and debt service
  • company lacks a committed revolving credit facility and has limited sources of liquidity because most assets are encumbered as collateral for the secured notes.
  • not too worried about secured notes as they have a lien on substantially all assets of the company and its domestic subsidiaries, preponderance of unsecured debt in the capital structure, and improved value of the collateral following the completion of Mountain Pass


friv 8 said...

Notes From Moody ore on Molycorp's $ MCP. Thank you for sharing this what we can remember.

theyenguy said...

The Finviz chart of MCP suggests that it is an insolvent company.