Delaware | 1000 | 27-2301797 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
John F. Ashburn, Jr., Esq. Executive Vice President and General Counsel 5619 Denver Tech Center Parkway Suite 1000 Greenwood Village, Colorado 80111 Tel: (303) 843-8040 Fax: (303) 843-8082 | Christopher M. Kelly, Esq. Michael J. Solecki, Esq. Jones Day North Point 901 Lakeside Avenue Cleveland, Ohio 44114 Tel: (216) 586-3939 Fax: (216) 579-0212 | Michael Kaplan, Esq. Davis Polk & Wardwell LLP 450 Lexington Avenue New York, New York 10017 Tel: (212) 450-4000 Fax: (212) 701-5800 |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o |
The information in this prospectus is not complete and may be changed. The selling stockholders may not sell securities under this registration statement until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell any securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. |
Per Share | Total | |||||||
Public offering price | $ | $ | ||||||
Underwriting discount | $ | $ | ||||||
Proceeds to the selling stockholders | $ | $ |
Morgan Stanley | J.P. Morgan |
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• | Clean-Energy Technologies: hybrid and electric vehicles, wind power turbines and compact fluorescent lighting; | |
• | High-Technology Applications: miniaturization of cell phones, personal digital assistant devices, digital music players, hard disk drives used in computers, computing devices, “ear bud” speakers and microphones, as well as fiber optics, lasers and optical temperature sensors; | |
• | Critical Defense Applications: guidance and control systems, communications, global positioning systems, radar and sonar; and | |
• | Advanced Water Treatment: industrial, military, homeland security and domestic and foreign aid applications. |
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• | the Mountain Pass mine is the largest non-Chinese rare earth deposit in the world; | |
• | other U.S. rare earth deposits exist, but these deposits are still in early exploratory stages of development; | |
• | officials emphasized the significance of the widespread use of commercial-off-the-shelf products in defense systems that include rare earth materials, such as computer hard drives; | |
• | heavy REEs, such as dysprosium, which provide much of the heat-resistant qualities of permanent magnets used in many industry and defense applications, are considered to be important; | |
• | government and industry officials told the U.S. GAO that where rare earth materials are used in defense systems, the materials are responsible for the functionality of the component and would be difficult to replace without losing performance; | |
• | a 2009 National Defense Stockpile configuration report identified lanthanum, cerium, europium and gadolinium as having already caused some kind of weapon system production delay and recommended further study to determine the severity of the delays; and | |
• | defense systems will likely continue to depend on rare earth materials, based on their life cycles and lack of effective substitutes. |
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Pricing ($/kg) | ||||||||||||||||||||
3-Year Average | March 2010(1) | June 2010(2) | Mar. 2011(3) | % change(5) | ||||||||||||||||
Oxides | ||||||||||||||||||||
Lanthanum oxide | $ | 6.05 | $ | 6.60 | $ | 8.40 | $ | 121.00 | 1,733 | % | ||||||||||
Cerium | ||||||||||||||||||||
Oxide (glass applications) | $ | 4.03 | $ | 4.09 | $ | 6.50 | $ | 121.00 | 2,858 | % | ||||||||||
Oxide (water filters) | — | $ | 13.20 | — | — | — | ||||||||||||||
XSORBX® | — | $ | 9.90 | — | — | — | ||||||||||||||
Europium oxide | $ | 442.07 | $ | 473.00 | $ | 525.00 | $ | 940.00 | 99 | % | ||||||||||
Metals | ||||||||||||||||||||
Lanthanum | $ | 10.01 | $ | 13.20 | $ | 12.80 | $ | 131.50 | 896 | % | ||||||||||
Praseodymium | $ | 32.12 | $ | 37.99 | $ | 43.00 | $ | 237.50 | 525 | % | ||||||||||
Neodymium | $ | 32.41 | $ | 37.99 | $ | 43.00 | $ | 255.50 | 573 | % | ||||||||||
Alloy products | ||||||||||||||||||||
NdFeB alloy | — | $ | 35.20 | (4) | $ | 42.94 | (4) | $ | 92.50 | (4) | 163 | % | ||||||||
SmCo alloy | — | $ | 50.60 | (4) | $ | 54.14 | (4) | $ | 61.25 | (4) | 21 | % |
(1) | Estimates used for SRK Consulting engineering study | |
(2) | As of June 29, 2010; Metal-Pages.com | |
(3) | As of March 31, 2011; Metal-Pages.com | |
(4) | Molycorp estimates | |
(5) | From March 2010 to March 2011 |
Note: | 3-year average refers to Metal-Pages oxide and metal prices averaged from May 2007 — May 2010, FOB China |
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Volume Under | Reserved for | Percent of | ||||||||||||||||||||||
Anticipated 2013 | Letters of | Contracted | Internal | Uncommitted | Anticipated 2013 | |||||||||||||||||||
Product Type | Production(1)(2) | Intent(1)(2) | Volume(8) | Consumption(9) | Volume(10) | Production(11) | ||||||||||||||||||
Lanthanum oxide or other form | 3,098 | 1,442 | 4,535 | 1,499 | — | 241 | % | |||||||||||||||||
Lanthanum metal | 2,502 | 700 | — | — | 1,802 | 28 | % | |||||||||||||||||
Cerium non-metal | 9,663 | 5,332 | (3) | — | 3,493 | 838 | 91 | % | ||||||||||||||||
Cerium metal | — | 200 | — | — | — | — | ||||||||||||||||||
Neodymium oxide or other form | — | 50 | — | — | — | — | ||||||||||||||||||
Didymium oxide or other form | — | 250 | — | — | — | — | ||||||||||||||||||
Neodymium or NdPr metal | 312 | 3,566 | (4) | — | 240 | — | 1,220 | % | ||||||||||||||||
Praseodymium metal | 116 | — | — | 116 | — | 100 | % | |||||||||||||||||
Europium oxide | 19 | — | — | — | 19 | (5) | — | |||||||||||||||||
Samarium metal(6) | 191 | 30 | — | — | 161 | 16 | % | |||||||||||||||||
Samarium metal in samarium alloy | — | — | 25 | — | — | — | ||||||||||||||||||
NdPr metal in NdFeB alloy | 1,960 | 1,103 | (7) | 100 | (7) | — | 757 | 61 | % | |||||||||||||||
NdPr metal in NdFeB magnets | — | 290 | (7) | — | — | — | — | |||||||||||||||||
TOTAL | 17,861 | 12,963 | 4,660 | 5,348 | 3,577 | 129 | % |
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(1) | Alloy and magnet production and letter of intent volume are reported on a rare earth metal basis. Three of our non-binding letters of intent contain a volume range; these letters cover lanthanum oxide, cerium non-metal and NdPr metal in NdFeB alloy. With respect to these non-binding letters of intent, the table above reflects the high end of the range provided for in each letter. In addition, certain of our non-binding letters of intent provide for a certain volume of rare earth metals or alloys but do not allocate that volume among specific rare earth metals or alloys. In those instances, we have allocated the volume in those letters based on management’s estimates of the needs of those customers and their specific applications. The table above includes anticipated sales of cerium and lanthanum-based products and didymium oxide to Sumitomo, subject to execution of definitive agreements. The table above does not include any sales of any products under either of the agreements we have entered into with Traxys North America LLC, which we refer to as Traxys. See “Certain Relationships and Related-Party Transactions — Inventory Financing and Resale Agreements.” Volumes under our prior letters of intent with AS Silmet and Santoku are included in the “Reserved for Internal Consumption” column. |
(2) | With respect to our metal products, there is a 14.2% loss of mass when REOs are converted to rare earth metal due to oxygen evolution, which accounts for most of the difference between the 17,861 mt total 2013 production rate and our anticipated production rate of approximately 19,050 mt of REO per year in 2013. | |
(3) | Volume shown is used in traditional glass or catalyst market segments and represents only a very small fraction of cerium buyers. Although IMCOA predicts that there will be a surplus of cerium in the future, we anticipate most of our production will serve the new, proprietary XSORBX® market segment if a surplus develops. At current prices, we would seek to sell cerium for other uses instead. This segment alone is expected to consume many times more cerium units than we can produce. We believe the new segment negates the need for additional letters of intent at this time. |
(4) | We anticipate most of our metal production in excess of volume under letters of intent, will be consumed internally for downstream NdFeB alloy/magnet production. |
(5) | We expect to receive non-binding letters of intent from a number of phosphor producers, which will easily consume our europium production. At this time, we are the only producer outside of China for this element, which enables energy efficient, compact fluorescent lights and straight tube T-8 lamps. | |
(6) | IMCOA estimates that there is a surplus of samarium metal. |
(7) | This represents the estimated NdPr metal contained in the non-binding letter of intent and contracted volume for NdFeB alloy and magnets. |
(8) | Represents volume under our second contract with one of our principal customers and our contract with Santoku. |
(9) | We anticipate metal and non-metal production in excess of letters of intent and contracted volume to be consumed internally as part of our plan to integrate the rare earth supply chain through our modernization and expansion investments and business acquisitions. |
(10) | Represents volume not committed under contract or covered by non-binding letters of intent. |
(11) | Represents volume undernon-binding letters of intent and contracted volume as a percentage of anticipated 2013 production. Upon completion of our second phase capacity expansion plan, our production capacity will double to approximately 40,000 mt of REO per year, and we will need to secure additionaloff-take agreements. |
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• | our potential inability to obtain any incremental funding required to complete our modernization and expansion; | |
• | our potential inability to successfully establish or maintain collaborative, joint venture, technology transfer and licensing arrangements; | |
• | our potential inability to convert existing non-binding letters of intent with customers for the sale of REO products into binding contracts; | |
• | fluctuations in demand for, and prices of, rare earth products; | |
• | our potential inability to successfully implement new processing technologies and capabilities; | |
• | the competitive industry in which we operate; | |
• | customers pursuing rare earth alternatives or products that do not rely on rare earth products; and | |
• | the lack of development of new uses and markets for rare earth products. |
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Common stock offered by the selling stockholders | 10,000,000 shares (or 11,500,000 shares if the underwriters exercise their option to purchase additional shares of common stock in this offering in full) | |
Common stock outstanding after this offering | 83,895,501 shares | |
Use of proceeds | We will not receive any proceeds from the sale of shares by the selling stockholders in this offering. |
Concurrent private placement of convertible senior notes | Concurrently with this offering, we are conducting a private placement of $200.0 million in aggregate principal amount of our % Convertible Senior Notes due 2016. We have granted the initial purchasers of that offering an option to purchase up to an additional $30.0 million in aggregate principal amount of notes. |
We estimate that the net proceeds to us from the concurrent private placement of our convertible senior notes, after deducting the initial purchasers’ discount and estimated offering expenses payable by us for the concurrent private placement of our convertible senior notes, will be approximately $193.9 million (or approximately $223.0 million if the initial purchasers in that offering exercise their option to purchase additional convertible senior notes in full). We intend to use the net proceeds from the concurrent private placement of our convertible senior notes to fund our initial modernization and expansion plan and our capacity expansion plan. See “Use of Proceeds.” |
We cannot assure you that the private placement of convertible senior notes will be completed or, if completed, on what terms it will be completed. The closing of this offering is not conditioned upon the closing of the private placement of convertible senior notes, and the closing of our private placement of convertible senior notes is not conditioned upon the closing of this offering. See the section of this prospectus entitled “Concurrent Private Placement of Convertible Senior Notes” for a summary of the terms of our convertible senior notes and a further description of the concurrent offering. |
Risk factors | See “Risk Factors” beginning on page 20 and other information included in this prospectus for a discussion of factors you should carefully consider before deciding whether to invest in our common stock. |
NYSE symbol | Our common stock is listed on The New York Stock Exchange, or NYSE, under the symbol “MCP.” |
• | no exercise of the underwriters’ option to purchase up to an additional 1,500,000 shares of our common stock; |
• | no exercise of the initial purchasers’ option to purchase up to an additional $30,000,000 principal amount of convertible senior notes in the concurrent private placement; |
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• | the retroactive adjustment of a 38.23435373-for-one stock split with respect to shares of our Class A common stock and Class B common stock effective on July 9, 2010; | |
• | the conversion of all of our Class A common stock and Class B common stock into an aggregate of 53,125,000 shares of common stock immediately prior to the consummation our initial public offering as described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; | |
• | the exclusion of shares of common stock expected to be issued to Sumitomo, subject to finalization of definitive agreements, various approvals and the satisfaction of numerous conditions; |
• | the exclusion of 3,978,847 shares of common stock authorized and reserved for future issuance under our stock incentive plan. See “Management — Compensation Discussion and Analysis — Molycorp, Inc. 2010 Equity and Performance Incentive Plan”; |
• | the exclusion of between 3,450,069 and 4,140,000 shares of common stock issuable upon conversion of our mandatory convertible preferred stock, depending on the applicable market value of our common stock and subject to anti-dilution, make-whole and other adjustments; and |
• | the exclusion of any shares of common stock issuable upon conversion of our convertible senior notes. |
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Total from | ||||||||||||||||||||||||
Three Months | Year Ended | June 12, 2008 | June 12, 2008 | |||||||||||||||||||||
Ended March 31, | December 31, | December 31, | (Inception) through | (Inception) through | ||||||||||||||||||||
Statement of Operations Data | 2011(4) | 2010 | 2010(4) | 2009 | December 31, 2008 | December 31, 2010(4) | ||||||||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||||||||||
Sales | $ | 26,261 | $ | 3,018 | $ | 35,157 | $ | 7,093 | $ | 2,137 | $ | 44,387 | ||||||||||||
Cost of goods sold(1) | (16,677 | ) | (5,950 | ) | (37,591 | ) | (21,785 | ) | (13,027 | ) | (72,403 | ) | ||||||||||||
Selling, general and administrative expense | (8,339 | ) | (4,480 | ) | (18,774 | ) | (12,444 | ) | (2,829 | ) | (34,047 | ) | ||||||||||||
Stock-based compensation | (2,899 | ) | — | (28,739 | ) | (241 | ) | (150 | ) | (29,130 | ) | |||||||||||||
Depreciation and amortization expense | (83 | ) | (95 | ) | (319 | ) | (191 | ) | (19 | ) | (529 | ) | ||||||||||||
Accretion expense | (234 | ) | (263 | ) | (912 | ) | (1,006 | ) | (250 | ) | (2,168 | ) | ||||||||||||
Operating loss | (1,971 | ) | (7,770 | ) | (51,178 | ) | (28,574 | ) | (14,138 | ) | (93,890 | ) | ||||||||||||
Net loss | $ | (2,198 | ) | $ | (7,749 | ) | $ | (50,774 | ) | $ | (28,587 | ) | $ | (14,074 | ) | $ | (93,435 | ) | ||||||
Weighted average shares outstanding (Common shares)(2) | ||||||||||||||||||||||||
Basic | 82,253,700 | 48,155,533 | 62,332,054 | 39,526,568 | 38,829,225 | 48,306,760 | ||||||||||||||||||
Diluted | 82,253,700 | 48,155,533 | 62,332,054 | 39,526,568 | 38,829,225 | 48,306,760 | ||||||||||||||||||
Loss per share of common stock(2): | ||||||||||||||||||||||||
Basic | $ | (0.04 | ) | $ | (0.16 | ) | $ | (0.81 | ) | $ | (0.72 | ) | $ | (0.36 | ) | $ | (1.93 | ) | ||||||
Diluted | $ | (0.04 | ) | $ | (0.16 | ) | $ | (0.81 | ) | $ | (0.72 | ) | $ | (0.36 | ) | $ | (1.93 | ) |
Pro Forma | Three Months | |||||||||||||||||||
March 31, | Ended March 31, | December 31, | December 31, | |||||||||||||||||
Balance Sheet Data | 2011 | 2011(4) | 2010 | 2010(4) | 2009 | |||||||||||||||
(Unaudited) | (In thousands) | |||||||||||||||||||
Cash and cash equivalents | $ | 686,355 | $ | 492,495 | $ | 7,452 | $ | 316,430 | $ | 6,929 | ||||||||||
Total current assets | 727,954 | 534,094 | 19,392 | 353,432 | 18,520 | |||||||||||||||
Total assets | 898,478 | 699,473 | 101,026 | 479,560 | 97,666 | |||||||||||||||
Total non-current liabilities | 180,525 | 12,922 | 13,847 | 12,335 | 13,528 | |||||||||||||||
Total liabilities | 220,185 | 52,582 | 23,860 | 33,047 | 23,051 | |||||||||||||||
Members’ equity | — | — | 77,166 | — | 74,615 | |||||||||||||||
Stockholders’ equity | 678,293 | 646,891 | — | 446,513 | — |
Total from | ||||||||||||||||||||||||
Three Months | Year Ended | June 12, 2008 | June 12, 2008 | |||||||||||||||||||||
Ended March 31, | December 31, | December 31, | (Inception) through | (Inception) through | ||||||||||||||||||||
Other Financial Data | 2011 | 2010 | 2010 | 2009 | December 31, 2008 | December 31, 2010 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Capital expenditures(3) | $ | 26,345 | $ | 2,840 | $ | 33,129 | $ | 7,285 | $ | 321 | $ | 40,735 |
(1) | Cost of goods sold includes write-downs of inventory to estimated net realizable value of $0.6 million for the three months ended March 31, 2011 and 2010. Cost of goods sold includes write-downs of inventory to estimated net realizable value of $2.5 million, $9.0 million, $9.5 million and $21.0 million for the years ended December 31, 2010 and 2009, for the period from June 12, 2008 (Inception) through December 31, 2008 and cumulatively for the period from June 12, 2008 (Inception) through December 31, 2010, respectively. Cost of goods sold also includes a $1.0 million write-down of bastnasite stockpile inventory based on estimated stockpile REO quantities at December 31, 2010 and $3.1 million of asset impairments for the year ended December 31, 2010. | |
(2) | Weighted average shares outstanding gives retroactive effect to the corporate reorganization, the conversion of all of our Class A common stock and Class B common stock into shares of common stock and the consummation of our initial public offering, and the 38.23435373-for-one stock split completed by Molycorp, Inc. on July 9, 2010 as if such events had occurred on June 12, 2008. | |
(3) | Reflected in cash flows from investing activities in our consolidated statements of cash flows. | |
(4) | As described in Note 13 to the financial statements for the year ended December 31, 2010 and in Note 10 to the financial statements for the three months ended March 31, 2011, these financial statements have been revised. |
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• | the replacement of a significant portion of the existing process, plant and equipment that consists of aging or outdated facilities and equipment, retooling and development and the preparation of the mine pit for renewed production of ore; | |
• | maintaining required federal, state and local permits; | |
• | the results of consultants’ analysis and recommendations; | |
• | negotiating contracts for equipment, earthwork, construction, equipment installation, labor and completing infrastructure and construction work; | |
• | negotiating sales and off-take contracts for our planned production; | |
• | the execution of any joint venture agreements or similar arrangements with strategic partners; and | |
• | other factors, many of which are beyond our control. |
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Year | Year | |||||||
Ended | Ended | |||||||
December 31, 2010 | December 31, 2009 | |||||||
Mitsubishi Corporation Unimetals U.S.A. | 24 | % | 0 | % | ||||
W.R. Grace & Co.-Conn | 21 | % | 27 | % | ||||
Chuden Rare Earth Co. Ltd. | 15 | % | 0 | % | ||||
Shin-Etsu Chemical Co. | 12 | % | 0 | % | ||||
Corning Inc. | 10 | % | 4 | % | ||||
3M Company | 7 | % | 5 | % | ||||
Albemarle Corporation | 0 | % | 55 | % |
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• | be prohibited from, or delayed in, selling or licensing some of our products or using some of our processes unless the patent holder licenses the patent to us, which it is not required to do; | |
• | be required to pay substantial royalties or grant a cross license to our patents to another patent holder; or | |
• | be required to redesign a product or process so it does not infringe a third party’s patent, which may not be possible or could require substantial funds and time. |
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• | geological and mining conditionsand/or effects from prior mining that may not be fully identified by available data or that may differ from experience; | |
• | assumptions concerning future prices of rare earth products, operating costs, mining technology improvements, development costs and reclamation costs; and | |
• | assumptions concerning future effects of regulation, including the issuance of required permits and taxes by governmental agencies. |
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• | unusual and unexpected rock formations affecting ore or wall rock characteristics; | |
• | ground or slope failures; | |
• | environmental hazards; | |
• | industrial accidents; | |
• | processing problems; | |
• | periodic interruptions due to inclement or hazardous weather conditions or other acts of God; and | |
• | mechanical equipment failure and facility performance problems. |
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• | the lack of availability, higher expense or unreasonable terms of such financial assurances; | |
• | the ability of current and future financial assurance counterparties to increase required collateral; and | |
• | the exercise by third-party financial assurance counterparties of any rights to refuse to renew the financial assurance instruments. |
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• | the extremely volatile rare earth industry; | |
• | our quarterly or annual earnings or those of other companies in our industry; | |
• | loss of a large customer; | |
• | changes in accounting standards, policies, guidance, interpretations or principles; | |
• | general economic conditions; | |
• | the failure of securities analysts to cover our stock or changes in financial estimates by analysts; | |
• | future sales of our common stock; and | |
• | other factors described in this “Risk Factors” section. |
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• | investors’ anticipation of the potential resale in the market of a substantial number of additional shares of our common stock received upon conversion of our mandatory convertible preferred stock and convertible senior notes; |
• | possible sales of our common stock by investors who view our mandatory convertible preferred stock and/or convertible senior notes as a more attractive means of equity participation in us than owning shares of our common stock; and |
• | hedging or arbitrage trading activity that may develop involving our mandatory convertible preferred stock and our common stock and convertible senior notes. |
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• | our ability to secure sufficient capital to implement our business plans; | |
• | our ability to complete our initial modernization and expansion plan, as well as our capacity expansion plan, and reach full planned production rates for REOs and other planned downstream products; | |
• | uncertainties associated with our reserve estimates and non-reserve deposit information; | |
• | uncertainties regarding global supply and demand for rare earth materials; | |
• | our ability to maintain appropriate relations with unions and employees; | |
• | our ability to successfully implement our“mine-to-magnets” strategy; | |
• | commercial acceptance of our new products, such as XSORBX®; | |
• | environmental laws, regulations and permits affecting our 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 us; | |
• | uncertainties associated with unanticipated geological conditions related to mining; and | |
• | risks associated with the acquisition and integration of new business operations, including the failure to realize anticipated synergies and maximize the financial and strategic position of the combined enterprise. |
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Low | High | |||||||
Year ending December 31, 2011 | ||||||||
Second Quarter (through June 6, 2011) | $ | 55.82 | $ | 79.16 | ||||
First Quarter | $ | 40.25 | $ | 62.80 | ||||
Year ended December 31, 2010 | ||||||||
Fourth Quarter | $ | 26.02 | $ | 55.22 | ||||
Third Quarter (from July 29, 2010) | $ | 12.10 | $ | 30.00 |
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• | on an actual basis; and |
• | on a pro forma basis to give effect to the issuance and sale by us of $200.0 million in aggregate principal amount of convertible senior notes and the receipt of the net proceeds by us, after deducting the initial purchasers’ discount and commissions and estimated offering fees and expenses payable by us for the private placement of our convertible senior notes. |
March 31, 2011 | ||||||||
Actual | Pro Forma | |||||||
(In thousands, | ||||||||
except share and | ||||||||
per share amounts) | ||||||||
Cash and cash equivalents | $ | 492,495 | $ | 686,355 | ||||
Long-term debt: | ||||||||
% convertible senior notes due 2016 offered in the concurrent private placement(1) | $ | — | $ | 167,603 | ||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized and 2,070,000 shares issued and outstanding | 2 | 2 | ||||||
Common stock, $0.001 par value; 350,000,000 shares authorized and 82,300,610 shares outstanding | 82 | 82 | ||||||
Additional paid-in capital | 742,440 | 773,842 | ||||||
Deficit accumulated during the development stage | (95,633 | ) | (95,633 | ) | ||||
Total equity (deficit) | 646,891 | 678,293 | ||||||
Total capitalization | $ | 646,891 | $ | 845,896 | ||||
(1) | The information in the table above assumes no exercise of the initial purchasers’ option to purchase additional convertible senior notes. In accordance withASC 470-20, convertible debt that may be wholly or partially settled in cash is required to be separated into a liability and an equity component, such that interest expense reflects the issuer’s non-convertible debt interest rate. Upon issuance, a debt discount will be recognized as a decrease in debt and an increase in equity. The debt component will accrete up to the principal amount over the expected term of the debt.ASC 470-20 does not affect the actual amount that we are required to repay, and the amount shown in the table above for the notes reflects the approximate liability component net of the discount recognized in equity, excluding any tax effect. |
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Total from | ||||||||||||||||||||||||
Three Months | Year Ended | June 12, 2008 | June 12, 2008 | |||||||||||||||||||||
Ended March 31, | December 31, | December 31, | (Inception) through | (Inception) through | ||||||||||||||||||||
Statement of Operations Data | 2011(4) | 2010 | 2010(4) | 2009 | December 31, 2008 | December 31, 2010(4) | ||||||||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||||||||||
Sales | $ | 26,261 | $ | 3,018 | $ | 35,157 | $ | 7,093 | $ | 2,137 | $ | 44,387 | ||||||||||||
Cost of goods sold(1) | (16,677 | ) | (5,950 | ) | (37,591 | ) | (21,785 | ) | (13,027 | ) | (72,403 | ) | ||||||||||||
Selling, general and administrative expense | (8,339 | ) | (4,480 | ) | (18,774 | ) | (12,444 | ) | (2,829 | ) | (34,047 | ) | ||||||||||||
Stock-based compensation | (2,899 | ) | — | (28,739 | ) | (241 | ) | (150 | ) | (29,130 | ) | |||||||||||||
Depreciation and amortization expense | (83 | ) | (95 | ) | (319 | ) | (191 | ) | (19 | ) | (529 | ) | ||||||||||||
Accretion expense | (234 | ) | (263 | ) | (912 | ) | (1,006 | ) | (250 | ) | (2,168 | ) | ||||||||||||
Operating loss | (1,971 | ) | (7,770 | ) | (51,178 | ) | (28,574 | ) | (14,138 | ) | (93,890 | ) | ||||||||||||
Net loss | $ | (2,198 | ) | $ | (7,749 | ) | $ | (50,774 | ) | $ | (28,587 | ) | $ | (14,074 | ) | $ | (93,435 | ) | ||||||
Weighted average shares outstanding (Common shares)(2) | ||||||||||||||||||||||||
Basic | 82,253,700 | 48,155,533 | 62,332,054 | 39,526,568 | 38,829,225 | 48,306,760 | ||||||||||||||||||
Diluted | 82,253,700 | 48,155,533 | 62,332,054 | 39,526,568 | 38,829,225 | 48,306,760 | ||||||||||||||||||
Loss per share of common stock(2): | ||||||||||||||||||||||||
Basic | $ | (0.04 | ) | $ | (0.16 | ) | $ | (0.81 | ) | $ | (0.72 | ) | $ | (0.36 | ) | $ | (1.93 | ) | ||||||
Diluted | $ | (0.04 | ) | $ | (0.16 | ) | $ | (0.81 | ) | $ | (0.72 | ) | $ | (0.36 | ) | $ | (1.93 | ) |
Pro Forma | Three Months | |||||||||||||||||||
March 31, | Ended March 31, | December 31, | December 31, | |||||||||||||||||
Balance Sheet Data | 2011 | 2011(4) | 2010 | 2010(4) | 2009 | |||||||||||||||
(Unaudited) | (In thousands) | |||||||||||||||||||
Cash and cash equivalents | $ | 686,355 | $ | 492,495 | $ | 7,452 | $ | 316,430 | $ | 6,929 | ||||||||||
Total current assets | 727,954 | 534,094 | 19,392 | 353,432 | 18,520 | |||||||||||||||
Total assets | 898,478 | 699,473 | 101,026 | 479,560 | 97,666 | |||||||||||||||
Total non-current liabilities | 180,525 | 12,922 | 13,847 | 12,335 | 13,528 | |||||||||||||||
Total liabilities | 220,185 | 52,582 | 23,860 | 33,047 | 23,051 | |||||||||||||||
Members’ equity | — | — | 77,166 | — | 74,615 | |||||||||||||||
Stockholders’ equity | 678,293 | 646,891 | — | 446,513 | — |
Total from | ||||||||||||||||||||||||
Three Months | Year Ended | June 12, 2008 | June 12, 2008 | |||||||||||||||||||||
Ended March 31, | December 31, | December 31, | (Inception) through | (Inception) through | ||||||||||||||||||||
Other Financial Data | 2011 | 2010 | 2010 | 2009 | December 31, 2008 | December 31, 2010 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Capital expenditures(3) | $ | 26,345 | $ | 2,840 | $ | 33,129 | $ | 7,285 | $ | 321 | $ | 40,735 |
(1) | Cost of goods sold includes write-downs of inventory to estimated net realizable value of $0.6 million for the three months ended March 31, 2011 and 2010. Cost of goods sold includes write-downs of inventory to estimated net realizable value of $2.5 million, $9.0 million, $9.5 million and $21.0 million for the years ended December 31, 2010 and 2009, for the period from June 12, 2008 (Inception) through December 31, 2008 and cumulatively for the period from June 12, 2008 (Inception) through December 31, 2010, respectively. Cost of goods sold also includes a $1.0 million write-down of bastnasite stockpile inventory based on estimated stockpile REO quantities at December 31, 2010 and $3.1 million of asset impairments for the year ended December 31, 2010. | |
(2) | Weighted average shares outstanding gives retroactive effect to the corporate reorganization, the conversion of all of our Class A common stock and Class B common stock into shares of common stock and the consummation of our initial public offering, and the 38.23435373-for-one stock split completed by Molycorp, Inc. on July 9, 2010 as if such events had occurred on June 12, 2008. | |
(3) | Reflected in cash flows from investing activities in our consolidated statements of cash flows. | |
(4) | As described in Note 13 to the financial statements for the year ended December 31, 2010 and in Note 10 to the financial statements for the three months ended March 31, 2011, these financial statements have been revised. |
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS
45
• | develop innovative rare earth technologies and products vital to green energy, high-tech, defense and industrial applications; | |
• | be commercially sustainable, globally competitive, profitable and environmentally superior; | |
• | act as a responsible steward of our rare earth resources; and | |
• | use our technology to improve the daily lives of people throughout the world. |
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Prices (USD/Kg) | ||||||||||||
October 1, | March 31, | |||||||||||
Rare Earth Oxides | 2009 | 2011 | Change | |||||||||
Lanthanum | 4.65 | 121 | 2,502 | % | ||||||||
Cerium | 3.75 | 121 | 3,127 | % | ||||||||
Praseodymium | 14 | 196 | 1,300 | % | ||||||||
Neodymium | 14.25 | 201 | 1,311 | % | ||||||||
Samarium | 4.5 | 106.5 | 2,267 | % | ||||||||
Europium | 480 | 940 | 96 | % | ||||||||
Gadolinium | 5.25 | 147 | 2,700 | % | ||||||||
Terbium | 350 | 990 | 183 | % | ||||||||
Dysprosium | 107.5 | 640 | 495 | % | ||||||||
Yttrium | 10.25 | 143 | 1,295 | % |
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Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Lanthanum products | 44 | % | 91 | % | ||||
Ceric Hydrate | 30 | % | 0 | % | ||||
Didymium products | 18 | % | 3 | % | ||||
Other cerium products | 5 | % | 1 | % |
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Three Months Ended March 31, | ||||||||||||
(In thousands) | 2011 | 2010 | Change | |||||||||
Sales | $ | 26,261 | $ | 3,018 | $ | 23,243 | ||||||
Cost of goods sold | (16,677 | ) | (5,950 | ) | (10,727 | ) | ||||||
Selling, general and administrative expenses | (8,339 | ) | (4,480 | ) | (3,859 | ) | ||||||
Stock-based compensation | (2,899 | ) | — | (2,899 | ) | |||||||
Depreciation and amortization expense | (83 | ) | (95 | ) | 12 | |||||||
Accretion expense | (234 | ) | (263 | ) | 29 | |||||||
Operating loss | (1,971 | ) | (7,770 | ) | 5,799 | |||||||
Other income (expense) | ||||||||||||
Other (expense) income | (168 | ) | 21 | (189 | ) | |||||||
Interest income | 140 | — | 140 | |||||||||
Loss before income taxes | (1,999 | ) | (7,749 | ) | 5,750 | |||||||
Provision for income taxes | (199 | ) | — | (199 | ) | |||||||
Net loss | $ | (2,198 | ) | $ | (7,749 | ) | $ | 5,551 | ||||
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Lanthanum products | 44 | % | 91 | % | ||||
Ceric Hydrate | 30 | % | 0 | % | ||||
Didymium products | 18 | % | 3 | % | ||||
Other cerium products | 5 | % | 1 | % |
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Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Lanthanum products | 415 | 239 | ||||||
Ceric Hydrate | 170 | — | ||||||
Didymium products | 122 | 69 | ||||||
Other cerium products | 23 | — |
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Year Ended December 31, | ||||||||||||
(In thousands) | 2010 | 2009 | Change | |||||||||
Sales | $ | 35,157 | $ | 7,093 | $ | 28,064 | ||||||
Cost of goods sold | (37,591 | ) | (21,785 | ) | (15,806 | ) | ||||||
Selling, general and administrative expenses | (18,744 | ) | (12,444 | ) | (6,330 | ) | ||||||
Share-based compensation | (28,739 | ) | (241 | ) | (28,498 | ) | ||||||
Depreciation and amortization expense | (319 | ) | (191 | ) | (128 | ) | ||||||
Accretion expense | (912 | ) | (1,006 | ) | 94 | |||||||
Operating loss | (51,178 | ) | (28,574 | ) | (22,604 | ) | ||||||
Other income (expense): | ||||||||||||
Other income | 155 | 181 | (26 | ) | ||||||||
Interest (expense) income | 249 | (194 | ) | 443 | ||||||||
Net loss | $ | (50,774 | ) | $ | (28,587 | ) | $ | (22,187 | ) | |||
Year Ended | ||||||||
December 31, | ||||||||
2010 | 2009 | |||||||
Lanthanum products | 38 | % | 91 | % | ||||
Ceric Hydrate | 24 | % | 0 | % | ||||
Didymium Oxide | 23 | % | 0 | % |
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Year Ended | ||||||||
December 31, | ||||||||
2010 | 2009 | |||||||
Lanthanum products | 857 | 1,579 | ||||||
Ceric Hydrate | 248 | — | ||||||
Didymium Oxide | 224 | 524 |
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Total from | ||||||||||||
June 12, 2008 | June 12, 2008 | |||||||||||
(Inception) | (Inception) | |||||||||||
Year Ended | through | through | ||||||||||
(In thousands) | December 31, 2009 | December 31, 2008 | December 31, 2009 | |||||||||
Sales | $ | 7,093 | $ | 2,137 | $ | 9,230 | ||||||
Cost of goods sold | (21,785 | ) | (13,027 | ) | (34,812 | ) | ||||||
Selling, general and administrative expenses | (12,444 | ) | (2,829 | ) | (15,273 | ) | ||||||
Stock-based compensation | (241 | ) | (150 | ) | (391 | ) | ||||||
Depreciation and amortization expense | (191 | ) | (19 | ) | (210 | ) | ||||||
Accretion expense | (1,006 | ) | (250 | ) | (1,256 | ) | ||||||
Operating loss | (28,574 | ) | (14,138 | ) | (42,712 | ) | ||||||
Other income (expense): | ||||||||||||
Other income (expense) | 181 | 54 | 235 | |||||||||
Interest (expense) income | (194 | ) | 10 | (184 | ) | |||||||
Net loss | $ | (28,587 | ) | $ | (14,074 | ) | $ | (42,661 | ) | |||
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Payments Due by Period | ||||||||||||||||||||
Contractual Obligations | Total | Less Than 1 Year | 1-3 Years | 4-5 Years | More Than 5 Years | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Operating lease obligations(1) | $ | 1,329 | $ | 266 | $ | 652 | $ | 411 | $ | — | ||||||||||
Purchase obligations(2) | 121,353 | 65,069 | 13,761 | 10,306 | 32,217 | |||||||||||||||
Employee bonus obligations(3) | 554 | 554 | — | — | — | |||||||||||||||
Asset retirement obligations(4) | 21,011 | 353 | 6,932 | 584 | 13,142 | |||||||||||||||
Total | $ | 144,247 | $ | 66,242 | $ | 21,345 | $ | 11,301 | $ | 45,359 |
(1) | Represents all operating lease payments for office space, land and office equipment. |
(2) | Represents contractual commitments for the purchase of materials and services from vendors. Some of the agreements Molycorp, Inc. entered into with these vendors contain cancellation clauses stating the amount and timing of termination charges to Molycorp, Inc. In total, these charges range from a minimum of $3.1 million to a maximum of $17.4 million depending on the timing of cancellation. |
(3) | Represents payments due to employees for awards under our annual incentive plan. | |
(4) | Under applicable environmental laws and regulations, we are subject to reclamation and remediation obligations resulting from our operations. The amounts presented above represent our estimated future undiscounted cash flows required to satisfy the obligations currently known to us. |
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• | significant underperformance relative to expected operating results; | |
• | significant changes in the way assets are used; | |
• | underutilization of our tangible assets; | |
• | discontinuance of certain products by us or by our customers; |
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• | a decrease in estimated mineral reserves; and | |
• | significant negative industry or economic trends. |
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• | Clean-Energy Technologies: hybrid and electric vehicles, wind power turbines and compact fluorescent lighting; | |
• | High-Technology Applications: miniaturization of cell phones, personal digital assistant devices, digital music players, hard disk drives used in computers, computing devices, “ear bud” speakers and microphones, as well as fiber optics, lasers and optical temperature sensors; | |
• | Critical Defense Applications: guidance and control systems, communications, global positioning systems, radar and sonar; and | |
• | Advanced Water Treatment: industrial, military, homeland security and domestic and foreign aid applications. |
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• | the use of neodymium, praseodymium and dysprosium in high-strength NdFeB magnets that are critical to hybrid and electric vehicles and the increased construction of wind power generation facilities, particularly off-shore installations; | |
• | the use of lanthanum and cerium for NiMH batteries that are utilized in hybrid and electric vehicles; | |
• | the use of europium, terbium and yttrium in the production of compact fluorescent light bulbs; | |
• | the use of high-strength NdFeB magnets in the miniaturization of electronic products; | |
• | the use of lanthanum by refineries processing lower quality crude oil that consumes greater quantities of fluid cracking catalysts; | |
• | the increased use of REEs in the drive to improve energy efficiency and reduce greenhouse gas, or GHGs, by the United States and the European Union; | |
• | the use of cerium in advanced water filtration applications; and | |
• | continued research and commercialization of new applications for rare earths products. |
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• | the Mountain Pass mine is the largest non-Chinese rare earth deposit in the world; | |
• | other U.S. rare earth deposits exist, but these deposits are still in early exploratory stages of development; | |
• | officials emphasized the significance of the widespread use of commercial-off-the-shelf products in defense systems that include rare earth materials, such as computer hard drives; | |
• | heavy REEs, such as dysprosium, which provide much of the heat-resistant qualities of permanent magnets used in many industry and defense applications, are considered to be important; | |
• | government and industry officials told the U.S. GAO that where rare earth materials are used in defense systems, the materials are responsible for the functionality of the component and would be difficult to replace without losing performance; | |
• | a 2009 National Defense Stockpile configuration report identified lanthanum, cerium, europium and gadolinium as having already caused some kind of weapon system production delay and recommended further study to determine the severity of the delays; and | |
• | defense systems will likely continue to depend on rare earth materials, based on their life cycles and lack of effective substitutes. |
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(1) | Does not reflect our potential to increase production to 40,000 mt of REO per year following the completion of our capacity expansion plan, but instead reflects our production of 19,050 mt of REO per year beginning in 2013. |
• | REO grade; | |
• | obtaining and maintaining operating and environmental permits; | |
• | acceptance in the marketplace as a long-term viable alternative to Chinese production; | |
• | the amount of recoverable high-value REEs contained in ore (such as neodymium, praseodymium, europium and dysprosium); | |
• | reserve life; | |
• | the ability to separate and concentrate rare earth minerals; | |
• | the ability to economically crack rare earth mineral concentrates and produce high yields; | |
• | the ability to separate REEs and manufacture finished products; | |
• | natural radioactive material content of the ore and the ability to responsibly and economically manage radioactive waste; | |
• | the cost of bringing the property into production; and | |
• | access to critical infrastructure, including electricity, fuel and transportation. |
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Volume Under | Reserved for | Percent of | ||||||||||||||||||||||
Anticipated 2013 | Letters of | Contracted | Internal | Uncommitted | Anticipated 2013 | |||||||||||||||||||
Product Type | Production(1)(2) | Intent(1)(2) | Volume(8) | Consumption(9) | Volume(10) | Production(11) | ||||||||||||||||||
Lanthanum oxide or other form | 3,098 | 1,442 | 4,535 | 1,499 | — | 241 | % | |||||||||||||||||
Lanthanum metal | 2,502 | 700 | — | — | 1,802 | 28 | % | |||||||||||||||||
Cerium non-metal | 9,663 | 5,332 | (3) | — | 3,493 | 838 | 91 | % | ||||||||||||||||
Cerium metal | — | 200 | — | — | — | — | ||||||||||||||||||
Neodymium oxide or other form | — | 50 | — | — | — | — | ||||||||||||||||||
Didymium oxide or other form | — | 250 | — | — | — | — | ||||||||||||||||||
Neodymium or NdPr metal | 312 | 3,566 | (4) | — | 240 | — | 1,220 | % | ||||||||||||||||
Praseodymium metal | 116 | — | — | 116 | — | 100 | % | |||||||||||||||||
Europium oxide | 19 | — | — | — | 19 | (5) | — | |||||||||||||||||
Samarium metal(6) | 191 | 30 | — | — | 161 | 16 | % | |||||||||||||||||
Samarium metal in samarium alloy | — | — | 25 | — | — | — | ||||||||||||||||||
NdPr metal in NdFeB alloy | 1,960 | 1,103 | (7) | 100 | (7) | — | 757 | 61 | % | |||||||||||||||
NdPr metal in NdFeB magnets | — | 290 | (7) | — | — | — | — | |||||||||||||||||
TOTAL | 17,861 | 12,963 | 4,660 | 5,348 | 3,577 | 129 | % |
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(1) | Alloy and magnet production and letter of intent volume are reported on a rare earth metal basis. Three of our non-binding letters of intent contain a volume range; these letters cover lanthanum oxide, cerium non-metal and NdPr metal in NdFeB alloy. With respect to these non-binding letters of intent, the table above reflects the high end of the range provided for in each letter. In addition, certain of our non-binding letters of intent provide for a certain volume of rare earth metals or alloys but do not allocate that volume among specific rare earth metals or alloys. In those instances, we have allocated the volume in those letters based on management’s estimates of the needs of those customers and their specific applications. The table above includes anticipated sales of cerium and lanthanum-based products and didymium oxide to Sumitomo, subject to execution of definitive agreements. The table above does not include any sales of any products under either of the agreements we have entered into with Traxys North America LLC, which we refer to as Traxys. See “Certain Relationships and Related-Party Transactions — Inventory Financing and Resale Agreements.” Volume under our prior letters of intent with AS Silmet and Santoku are included in the “Reserved for Internal Consumption” column. |
(2) | With respect to our metal products, there is a 14.2% loss of mass when REOs are converted to rare earth metal due to oxygen evolution, which accounts for most of the difference between the 17,861 mt total 2013 production rate and our anticipated production rate of approximately 19,050 mt of REO per year in 2013. | |
(3) | Volume shown is used in traditional glass or catalyst market segments and represents only a very small fraction of cerium buyers. Although IMCOA predicts that there will be a surplus of cerium in the future, we anticipate most of our production will serve the new, proprietary XSORBX® market segment if a surplus develops. At current prices, we would seek to sell cerium for other uses instead. This segment alone is expected to consume many times more cerium units than we can produce. We believe the new segment negates the need for additional letters of intent at this time. |
(4) | We anticipate most of our metal production in excess of volume under letters of intent, will be consumed internally for downstream NdFeB alloy/magnet production. |
(5) | We expect to receive non-binding letters of intent from a number of phosphor producers, which will easily consume our europium production. At this time, we are the only producer outside of China for this element, which enables energy efficient, compact fluorescent lights and straight tube T-8 lamps. | |
(6) | IMCOA estimates that there is a surplus of samarium metal. |
(7) | This represents the estimated NdPr metal contained in the non-binding letter of intent and contracted volume for NdFeB alloy and magnets. |
(8) | Represents volume under our second contract with one of our principal customers and volume our contract with Santoku. |
(9) | We anticipate metal and non-metal production in excess of letters of intent and contracted volume to be consumed internally as part of our plan to integrate the rare earth supply chain through our modernization and expansion investments and business acquisitions. |
(10) | Represents volume not committed under contract or covered by non-binding letters of intent. |
(11) | Represents volume under non-binding letters of intent and contracted volume as a percentage of anticipated 2013 production. Upon completion of our second phase capacity expansion plan, our production capacity will double to approximately 40,000 mt of REO per year, and we will need to secure additionaloff-take agreements. |
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Estimated | ||||
Percentage of | ||||
Element | Bastnasite Ore | |||
Cerium | 48.8 | % | ||
Lanthanum | 34.0 | % | ||
Neodymium | 11.7 | % | ||
Praseodymium | 4.2 | % | ||
Samarium | 0.79 | % | ||
Gadolinium | 0.21 | % | ||
Europium | 0.13 | % | ||
Yttrium | 0.12 | % | ||
Other REE (including Dysprosium and Terbium) | 0.05 | % |
• | “proven reserves” are reserves for which: |
• | quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; gradeand/or quality are computed from the results of detailed sampling; and | |
• | the sites for inspection sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established. |
• | “probable reserves” are reserves for which quantity and gradeand/or quality are computed from information similar to that used for proven reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation. |
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Average Ore | Ore | Contained REO | ||||||||||
Category of Reserves | Grade (%) | (Millions of Tons) | (Millions of Pounds) | |||||||||
Proven | 9.38 | % | 0.480 | 88 | ||||||||
Probable | 8.20 | % | 13.108 | 2,122 |
• | assumed we have a 100% working interest in the Mountain Pass facility; | |
• | assumed full mining recovery; | |
• | assumed that mine reserves are fully diluted; | |
• | assumed a historic cut-off grade of 5.0% REO within the pit design; | |
• | assumed a metallurgical recovery factor of 65% for the mill facility and 93% for the extraction and separation facilities; |
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• | used the 1997 surface topography for volume control of reserves; | |
• | used the historic three-year average commodity prices set forth in table below; and | |
• | rounded values to the nearest significant number. |
Rare Earth Products | Price(1) | |||
($/kg) | ||||
Non-Metal Products | ||||
Lanthanum oxide | $ | 6.60 | ||
Cerium oxide for glass applications | 4.09 | |||
Cerium oxide for water filters | 13.20 | |||
XSORBX® | 9.90 | |||
Europium oxide | 473.00 | |||
Metal Products | ||||
Lanthanum | 13.20 | |||
Praseodymium | 37.99 | |||
Neodymium | 37.99 | |||
Metal Alloys | ||||
NdFeB | 35.20 | |||
Samarium cobalt | 50.60 |
(1) | Prices for certain rare earth products have increased from those used by SRK Consulting in its engineering study. The prices set forth in the following table, are primarily based on information from Metal-Pages and alloy pricing formulas as of March 31, 2011 (except as noted below). |
Product | March 31, 2011 Price | |||
($/kg) | ||||
Lanthanum Oxide | $ | 121.00 | ||
Cerium Oxide (glass products) | 121.00 | |||
Europium Oxide | 940.00 | |||
Lanthanum Metal | 131.50 | |||
Praseodymium Metal | 237.50 | |||
Neodymium Metal | 255.50 | |||
Nd-Iron-Boron Alloy | 92.50 | (a) | ||
Samarium Cobalt Alloy | 61.25 | (a) |
(a) | Molycorp market price estimates |
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• | geological and mining conditionsand/or effects from prior mining that may not be fully identified by available data or that may differ from experience; | |
• | assumptions concerning future prices of rare earth products, operating costs, mining technology improvements, development costs and reclamation costs; and | |
• | assumptions concerning future effects of regulation, including the issuance of required permits and taxes by governmental agencies. |
Mine type | Open pit | |
Process description | Crushing, milling, flotation, leaching, extraction, separation | |
Open pit mine life | 30 years | |
Mill throughput | 1,300 average tons per day | |
Initial capital costs(1) | $531 million | |
Sustaining capital costs | $138 million |
Average Ore | Ore | Contained REO | ||||||||||
Grade (%) | (Millions of Tons) | (Millions of Pounds) | ||||||||||
Contained minerals | ||||||||||||
Proven | 9.38 | % | 0.480 | 88 | ||||||||
Probable | 8.20 | % | 13.108 | 2,122 |
(1) | SRK Consulting assumes capital expenditures of $550 million, which includes extra stripping costs for 2013 and 2014. |
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Years | Years | Years | ||||||||||||||
1-5 | 6-10 | 11-30 | Life-of-Mine | |||||||||||||
Average annual payable minerals | ||||||||||||||||
Ore milled (kilotons) | 427 | 368 | 424 | 13,692 | ||||||||||||
Average ore grade, as a percentage of REO | 7.9 | % | 9.3 | % | 8.2 | % | 8.2 | % | ||||||||
Mill REO recovery percentage | 65 | % | 65 | % | 65 | % | 65 | % | ||||||||
Total recovered REO (in thousands of pounds) | 43,775 | 44,404 | 44,776 | 1,464,272 | ||||||||||||
Chemical plant recovery percentage | 90 | % | 95 | % | 94 | % | 94 | % | ||||||||
Total REO production (in thousands of pounds) | 39,532 | 42,044 | 42,044 | 1,372,650 | ||||||||||||
Average operating cost per pound of REO | ||||||||||||||||
Mining | $ | 0.10 | $ | 0.06 | $ | 0.12 | $ | 0.11 | ||||||||
Oxides | 1.16 | 1.13 | 1.14 | 1.14 | ||||||||||||
Oxides-to-metals | 0.80 | 0.80 | 0.80 | 0.80 | ||||||||||||
Metals-to-alloys | 3.71 | 3.75 | 3.75 | 3.76 | ||||||||||||
Total REO | $ | 5.77 | $ | 5.74 | $ | 5.81 | $ | 5.81 | ||||||||
Price assumptions (Weighted average pricing of different products) | ||||||||||||||||
Oxides | $ | 4.55 | ||||||||||||||
Metals | $ | 7.64 | ||||||||||||||
Alloys | $ | 16.59 | ||||||||||||||
Total REO | $ | 11.97 | ||||||||||||||
After tax project internal rate of return | 34 | % | ||||||||||||||
After tax net present value 8% discount (dollars in millions)(1) | $ | 1,460 |
(1) | As of October 28, 2010, prices for certain rare earth products had increased from those used by SRK Consulting in its engineering study. According to SRK Consulting, using the October 28, 2010 prices set forth in the following table, which are primarily based on information from Metal-Pages and alloy pricing formulas, instead of those used in SRK Consulting’s original model would increase the after tax project internal rate of return to 115% and the after tax net present value (8% discount) to $6.76 billion: |
Product | October 28, 2010 Price | |||
($/kg) | ||||
Lanthanum Oxide | $ | 44.54 | ||
Cerium Oxide (glass products) | 43.04 | |||
Europium Oxide | 630.52 | |||
Lanthanum Metal | 43.66 | |||
Neodymium/Praseodymium Metal | 84.54 | |||
Nd-Iron-Boron Alloy | 78.32 | (a) | ||
Samarium Cobalt Alloy | 66.15 | (a) |
(a) | Molycorp market price estimates |
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• | We conducted additional drilling and exploration work between December 2009 and April 2010 with a primary focus on in-fill drilling and a secondary focus on condemnation. We plan to conduct additional drilling and exploration work in 2011. | |
• | We will construct a new mill rather than refurbish the existing mill prior to the start of full-scale production. With this change, SRK Consulting revised the mine plan to reflect improved access to ore in the southwest and south portion of the open pit. Fundamental production criteria remained unchanged (e.g., 5.0% REO cut-off grade, 19,050 mt REO per year, and overall recovery of 60%); therefore, there is no material change in the mine production schedule. However, the pit layouts over time shown in the original engineering study (e.g., Figures 6.2 through 6.7) will not match the current pit layouts. | |
• | We changed the location of the extraction and separations facilities, as well as related infrastructure, from the northwest portion of our property to immediately southeast of the existing process facilities. While the location of these facilities has changed, the production process has not. Accordingly, Figure 7.8 General Facilities Arrangement for the Extraction and Separation Facilities in the original engineering study is no longer valid. | |
• | Updated project capital costs are within 10% of the estimated capital costs in the original engineering study. | |
• | Project planning during the development phase will be performed by us and Eichleay Engineers of California, a consulting firm specializing in project delivery. |
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Year Ended December 31, | ||||||||||||||||||||
2006 | 2007 | 2008 | 2009 | 2010 | ||||||||||||||||
Molycorp Operations | 0 | 0 | 1.01 | 0.86 | 1.33 | |||||||||||||||
MSHA Rates for Operators | 2.79 | 3.73 | 3.48 | 2.95 | 2.83 |
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Name | Age | Position | ||||
Mark A. Smith | 52 | President, Chief Executive Officer and Director | ||||
James S. Allen | 44 | Chief Financial Officer and Treasurer | ||||
John L. Burba, PhD | 59 | Executive Vice President and Chief Technology Officer | ||||
John F. Ashburn, Jr. | 56 | Executive Vice President and General Counsel | ||||
Ksenia A. Adams | 30 | Corporate Controller | ||||
Douglas J. Jackson | 50 | Vice President, Business Development | ||||
John K. Bassett | 61 | Vice President, Operations | ||||
Russell D. Ball | 43 | Director | ||||
Ross R. Bhappu | 51 | Chairman of the Board | ||||
Brian T. Dolan | 70 | Director | ||||
Charles R. Henry | 73 | Director | ||||
Mark S. Kristoff | 50 | Director | ||||
Alec Machiels | 38 | Director | ||||
Jack E. Thompson | 61 | Director |
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• | Messrs. Ball, Henry and Thompson serve as Class I directors (with a term expiring in 2014); |
• | Messrs. Dolan and Smith serve as Class II directors (with a term expiring in 2012); and | |
• | Messrs. Bhappu, Kristoff and Machiels serve as Class III directors (with a term expiring in 2013). |
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• | the declaration of distributions on our capital stock; | |
• | a merger or consolidation of the Company with or into another entity; | |
• | a sale, lease or exchange of all or substantially all of our assets; | |
• | a liquidation or dissolution of the Company; | |
• | any action that must be submitted to a vote of our stockholders; or | |
• | any action that may not be delegated to a board committee under our certificate of incorporation or the General Corporation Law of the State of Delaware. |
• | director independence; | |
• | board structure and composition; | |
• | board member nomination and eligibility requirements; | |
• | board leadership and executive sessions; |
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• | limitations on other board and committee service; | |
• | committees of the board; | |
• | director responsibilities; | |
• | board and committee resources, including access to officers and employees; | |
• | director compensation; | |
• | director orientation and ongoing education; | |
• | succession planning; and | |
• | board and committee self evaluations. |
Name | Title | |
Mark A. Smith | President and Chief Executive Officer | |
James S. Allen | Chief Financial Officer and Treasurer | |
Ksenia A. Adams | Corporate Controller | |
John F. Ashburn, Jr. | Executive Vice President and General Counsel | |
John L. Burba | Executive Vice President and Chief Technology Officer |
• | developing a framework for benchmarking our executives’ salaries to the salaries of executives with comparable positions in our peer group; | |
• | creating an annual bonus program based on the achievement of essential corporate objectives; | |
• | creating a long-term equity-based award program, which we refer to as our Long-Term Incentive Program, under which our executives may receive equity awards to align their interests with our stockholders’ interests and encourage them to work toward the long-term success of the Company; | |
• | entering into new employment agreements with our executives in anticipation of becoming a public company; |
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• | amending and restating our nonqualified deferred compensation plan to give participants the ability to defer the receipt of shares subject to restricted stock units granted under the Long-Term Incentive Program, to convert all or a portion of their cash bonus into additional restricted stock units and to be eligible to receive matching restricted stock units, each of which promotes share ownership in our executives; and | |
• | instituting a stock ownership policy for our directors and officers, which promotes a long-term view of our performance. |
• | encouraging, recognizing and rewarding outstanding performance; | |
• | recognizing and rewarding individuals for their experience, expertise, level of responsibility, leadership, individual accomplishment and other contributions to us; | |
• | recognizing and rewarding individuals for work that helps increase our value; and | |
• | providing compensation packages that are competitive with those offered by companies with whom we compete in hiring and retaining talented individuals. |
• | “non-employee directors” within the meaning ofRule 16b-3 promulgated under the Exchange Act; and | |
• | “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code. |
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• | determining our President and Chief Executive Officer’s compensation and compensation for our other executive officers; | |
• | working with members of our management to report our executive compensation practices and policies to our stockholders; and | |
• | administering the equity and incentive compensation plans in which our executive officers participate. |
• | reports and updates from our executive officers on company and individual executive performance that is measured against quantitative and qualitative performance goals established to help determine individual performance and business success; | |
• | recommendations from our President and Chief Executive Officer regarding the compensation for our executive officers; and | |
• | advice from its independent compensation consultant, Towers Watson & Co., which we refer to as Towers Watson. |
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Minerals Technologies Inc. | RTI International Metals Inc. | |
OM Group Inc. | Stillwater Mining Co. | |
Titanium Metals Corp. | Thompson Creek Metals Company Inc. | |
Brush Engineered Materials Inc. | Hecla Mining Co. | |
Amcol International Corp. | Intrepid Potash Inc. | |
Innospec Inc. | STR Holdings Inc. | |
Terra Nova Royalty Corporation | American Vanguard Corp. | |
Calgon Corporation | NL Industries Inc. |
Fortress Paper Ltd. | B2gold Corporation | |
Orbit Garant Drilling Inc. | Quicksilver Gas Services LP | |
Angle Energy Inc. | Vanguard Natural Resources LLC |
• | using a linear regression to estimate salaries for a company with $400 million in revenue; and | |
• | considering salaries for companies with $200 million to $1 billion in revenue. |
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• | base salaries; | |
• | annual bonuses paid in a mix of cash and equity; | |
• | discretionary cash bonuses related to the achievement of our initial public offering; | |
• | equity-based awards under our Long-Term Incentive Program; | |
• | health and welfare benefits; and | |
• | retirement benefits. |
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Component | Primary Purpose | |
Base Salary | Base salary compensates an individual for his or her position’s responsibilities, skills, experience and performance. The levels of base salaries are intended to attract and retain a high-quality management team, especially when considered with the other components of our compensation program. The levels of base salary for our named executive officers are designed to reflect each executive officer’s scope of responsibility and accountability. | |
Annual Bonus Payments | Our annual bonus payments are used to align our executive officers with our overall business objectives and reward them for superior performance. Specific goals are determined at the beginning of the year (other than for 2010, which were determined after our initial public offering) and performance is evaluated at year end. Payments are made in a combination of cash and restricted stock. | |
Equity Awards | Equity awards under our 2010 Equity and Performance Incentive Plan align our executives with the interests of our stockholders and promote retention. | |
Health and Welfare Benefits | Health and welfare benefits provide for basic health, life and income security needs of our executive officers and their dependents. | |
Retirement Benefits | Our 401(k) plan encourages and rewards long-term service by providing market-based benefits upon retirement. All employees are eligible to participate in our 401(k) plan. Our nonqualified deferred compensation plan provides a tax-efficient vehicle to accumulate retirement savings. In addition, the plan promotes share ownership by allowing participants to convert all or a portion of their cash bonus into restricted stock units and receive additional matching restricted stock units. The plan also promotes retention, because the matching restricted stock units vest over a three-year term. |
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Initial 2011 | Revised 2011 | Percentage | ||||||||||
Executive | Base Salary | Base Salary | Increase | |||||||||
Mr. Smith | $ | 410,000 | $ | 687,000 | 67.6 | % | ||||||
Mr. Allen | $ | 256,000 | $ | 360,000 | 40.6 | % | ||||||
Ms. Adams | $ | 130,000 | $ | 150,000 | 15.4 | % | ||||||
Mr. Ashburn | $ | 256,000 | $ | 360,000 | 40.6 | % | ||||||
Mr. Burba | $ | 256,000 | $ | 360,000 | 40.6 | % |
• | Financial — this category included achieving various financial objectives, such as the completion of our initial public offering and securing financing for the modernization and expansion of our Mountain Pass facility. | |
• | Mountain Pass Project — this category included successful completion of various project milestones related to the modernization and expansion of our Mountain Pass facility, such as completing the construction schedule and capital estimate, obtaining permits required to begin construction, submitting pre-orders for equipment and starting construction. | |
• | Business Plan — this category included execution of our 2010 business plan and an operating income of $180,177. | |
• | Safety — this category included strong progress in various safety targets, such as engaging an outside firm to perform an independent safety audit and a 10% improvement in our recordable injury rate. | |
• | Other — this category included achieving various strategic business development goals in ourmine-to-magnets plan as well as obtaining sales contracts for our products after the completion of our modernization and expansion of our Mountain Pass facility. |
• | if our overall level of achievement was 80% of target, his or her bonus would be 20% of his or her 2010 base salary; | |
• | if our overall level of achievement was 100% of target, his or her bonus would be 40% of his or her 2010 base salary; and | |
• | if our overall level of achievement was 120% of target, his or her bonus would be 80% of his or her 2010 base salary. |
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Category | Weighting | Level of Achievement | ||||||
Financial | 20 | % | 113% | |||||
Mountain Pass Project | 30 | % | 120% | |||||
Business Plan | 20 | % | 75% | |||||
Safety | 20 | % | 100% | |||||
Other | 10 | % | 150% |
Executive | Bonus Amount | |||
Mr. Smith | $ | 198,312 | ||
Mr. Allen | $ | 61,973 | ||
Ms. Adams | $ | 22,310 | ||
Mr. Ashburn | $ | 61,973 | ||
Mr. Burba | $ | 61,973 |
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Executive | Number of Shares of Restricted Stock | |||
Mr. Smith | 6,000 | |||
Mr. Allen | 18,000 | |||
Mr. Ashburn | 3,000 | |||
Mr. Burba | 3,000 |
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• | Directors — four times the value of their annual cash retainer; | |
• | President and Chief Executive Officer — three times his annual base salary; and | |
• | Chief Financial Officer and Executive Vice Presidents — two times their annual base salaries. |
Non-Equity | ||||||||||||||||||||||||||||||||
Stock | Option | Incentive Plan | All Other | |||||||||||||||||||||||||||||
Name and | Bonus | Awards | Awards | Compensation | Compensation | |||||||||||||||||||||||||||
Principal Position | Year | Salary ($) | ($) | ($) | ($) | ($) | ($) | Total ($) | ||||||||||||||||||||||||
Mark A. Smith | 2010 | 400,000 | 199,156 | 219,060 | (4) | — | — | 30,245 | (7) | 848,461 | ||||||||||||||||||||||
President and Chief Executive Officer | 2009 | 400,000 | — | (5 | ) | 241,000 | (6) | — | 38,245 | 679,245 | ||||||||||||||||||||||
James S. Allen | 2010 | 214,583 | 80,987 | 657,180 | (4) | — | — | 29,400 | (8) | 982,150 | ||||||||||||||||||||||
Chief Financial Officer and Treasurer(1) | 2009 | 12,179 | — | — | — | — | 77 | 12,256 | ||||||||||||||||||||||||
Ksenia A. Adams | 2010 | 120,000 | 41,155 | — | — | — | 17,400 | (9) | 178,555 | |||||||||||||||||||||||
Corporate Controller(2) | 2009 | 52,308 | — | — | — | — | 946 | 53,254 | ||||||||||||||||||||||||
John F. Ashburn, Jr. | 2010 | 225,208 | 80,987 | 109,530 | (4) | — | — | 9,800 | (10) | 425,525 | ||||||||||||||||||||||
Executive Vice President and General Counsel | 2009 | 215,000 | 30,000 | (3) | (5 | ) | — | — | 14,700 | 259,700 | ||||||||||||||||||||||
John L. Burba | 2010 | 224,288 | 80,987 | 109,530 | (4) | — | — | 29,400 | (11) | 444,205 | ||||||||||||||||||||||
Executive Vice President and Chief Technology Officer | 2009 | 213,701 | — | (5 | ) | — | — | 29,918 | 243,619 |
(1) | Mr. Allen was hired on December 9, 2009 as our Chief Financial Officer and was appointed Treasurer in March 2010. | |
(2) | Ms. Adams was hired on July 27, 2009. | |
(3) | Represents $30,000 paid to Mr. Ashburn, which consisted of the remaining portion of his signing bonus that was contingent upon his employment continuing in 2009. | |
(4) | Represents the aggregate grant date fair value computed in accordance with FASB ASC 718. | |
(5) | On September 10, 2009, our board of directors awarded incentive shares of Molycorp Minerals, LLC to certain employees, including 2,310,000 shares to Mr. Smith, 700,000 shares to Mr. Ashburn and 875,000 shares to Mr. Burba. Each incentive share is effectively equivalent to approximately 0.379718 of a share of our common stock. The incentive shares are intended to constitute “profits interests” under IRS Revenue Procedures93-27 and2001-43. For the year ended December 31, 2010, we recognized |
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share-based compensation totaling $11,262,558 for Mr. Smith, $3,412,895 for Mr. Ashburn and $4,266,119 for Mr. Burba related to the incentive shares that were exchanged for shares of Class B common stock and later converted into shares of common stock in connection with our initial public offering. The incentive shares were originally classified as a liability and valued at zero under the intrinsic value method and the Class B shares were valued at fair value in connection with the corporate reorganization on April 15, 2010. | ||
(6) | Options for member interests in Molycorp Minerals, LLC, which were assumed by Molycorp, LLC, were immediately vested and exercisable on the grant date. The value of this option award represents the amount of compensation recognized for financial statement purposes. Additional information regarding the determination of the grant date fair value of this award and the underlying assumption is included in Note 8 to the consolidated financial statements included elsewhere in this prospectus. | |
(7) | Includes $29,400 for employer contributions to our 401(k) plan on behalf of Mr. Smith for 2010 and $845 in 2010 for the premiums paid on a term life insurance policy for the benefit of Mr. Smith. | |
(8) | Represents $29,400 for employer contributions to our 401(k) plan on behalf of Mr. Allen for 2010. | |
(9) | Represents $17,400 for employer contributions to our 401(k) plan on behalf of Ms. Adams for 2010. | |
(10) | Represents employer contributions to our 401(k) plan on behalf of Mr. Ashburn for 2010. | |
(11) | Represents employer contributions to our 401(k) plan on behalf of Mr. Burba for 2010. |
• | an annual base salary of $400,000, subject to increases at our discretion; | |
• | eligibility to participate in our employee benefit plans; | |
• | eligibility to participate in our annual bonus plan for officers and directors; | |
• | eligibility to participate in our executive nonqualified deferred compensation plan; and | |
• | a term life insurance policy in the amount of $1,000,000 for the benefit of Mr. Smith. |
• | an annual base salary of $400,000, subject to increases at our discretion; | |
• | eligibility to participate in our employee benefit plans; | |
• | eligibility to participate in any bonus plan or long-term equity or cash incentive compensation plan for officers and directors established by our board of directors; |
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• | eligibility to participate in our executive nonqualified deferred compensation plan; and | |
• | a term life insurance policy in the amount of $1,000,000 for the benefit of Mr. Smith. |
• | eligibility to participate in our employee benefit plans; | |
• | eligibility to participate in any bonus plan or long-term equity or cash incentive compensation plan for officers and directors established by our board of directors; and | |
• | eligibility to participate in our executive nonqualified deferred compensation plan. |
All Stock | Grant Date Fair | |||||||||||
Grant | Awards: Number of Shares | Value of Awards | ||||||||||
Name | Date | of Stock or Units | ($) | |||||||||
Mark A. Smith | 11/4/2010 | 6,000 | 219,060 | |||||||||
James S. Allen | 11/4/2010 | 18,000 | 657,180 | |||||||||
Ksenia A. Adams | — | — | — | |||||||||
John F. Ashburn, Jr. | 11/4/2010 | 3,000 | 109,530 | |||||||||
John L. Burba | 11/4/2010 | 3,000 | 109,530 |
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Number of | Market Value | |||||||
Shares or Units | of Shares or | |||||||
of Stock that | Units of Stock | |||||||
Have Not | that Have Not | |||||||
Name | Vested (#) | Vested ($)(3) | ||||||
Mark A. Smith | 292,383 | (1) | 14,589,912 | |||||
6,000 | (2) | 299,400 | ||||||
James S. Allen | 18,000 | (2) | 898,200 | |||||
Ksenia A. Adams | — | — | ||||||
John F. Ashburn, Jr. | 88,601 | (1) | 4,421,190 | |||||
3,000 | (2) | 149,700 | ||||||
John L. Burba | 110,751 | (1) | 5,526,475 | |||||
3,000 | (2) | 149,700 |
(1) | Represents restricted shares ultimately received in exchange for the executive officers’ incentive shares in connection with the corporate reorganization and the conversion of shares of Class B common stock immediately prior to the consummation of our initial public offering. These shares vested on February 3, 2011. | |
(2) | Represents restricted shares granted on November 4, 2010. These shares will vest in full on the third anniversary of the grant date, subject to continued employment by the recipient other than in the case of normal retirement during the three-year period following the grant date. | |
(3) | Based on $49.90 per share, which was the closing price of our common stock on December 31, 2010. |
Stock Awards | ||||||||
Number of Shares | ||||||||
Acquired on | Value Realized on | |||||||
Vesting (#) | Vesting ($)(1) | |||||||
Mark A. Smith | 292,383 | 8,271,505 | ||||||
John F. Ashburn, Jr. | 88,601 | 2,506,516 | ||||||
John L. Burba | 110,751 | 3,133,145 |
(1) | The value realized shown in this column is computed by multiplying the number of restricted shares vesting by the closing price of a share of our common stock on the date of vesting. All awards vested on September 30, 2010. The closing price of a share of our common stock on September 30, 2010 was $28.29. These restricted shares were received in exchange for the executive officers’ incentive shares in the corporate reorganization. |
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Aggregate | ||||||||||||||||||||
Executive | Registrant | Earnings in | Aggregate | Aggregate | ||||||||||||||||
Contributions | Contributions | Last Fiscal | Withdrawals/ | Balance at Last | ||||||||||||||||
in Last Fiscal Year | in Last Fiscal Year | Year | Distributions | Fiscal Year End | ||||||||||||||||
Name | ($)(1) | ($) | ($) | ($) | ($) | |||||||||||||||
Mark A. Smith | 17,667 | — | 1,590 | — | 30,333 | |||||||||||||||
James S. Allen | 4,936 | — | 370 | — | 4,843 | |||||||||||||||
Ksenia A. Adams | — | — | 155 | — | 1,100 | |||||||||||||||
John F. Ashburn, Jr. | — | — | 802 | — | 5,702 | |||||||||||||||
John L. Burba | — | — | 700 | — | 4,974 |
(1) | The amounts reported are fully reported as part of the “Salary” and “All Other Compensation” columns of the Summary Compensation Table. |
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Fees Paid in Cash | Stock Awards | |||||||||||
Name | ($)(1) | ($)(2) | Total | |||||||||
Russell D. Ball | 17,500 | 273,825 | 291,325 | |||||||||
Ross R. Bhappu | 17,500 | — | 17,500 | |||||||||
Brian T. Dolan | 17,500 | — | 17,500 | |||||||||
Charles R. Henry | 30,000 | — | 30,000 | |||||||||
Mark S. Kristoff | 20,000 | — | 20,000 | |||||||||
Alec Machiels | 17,500 | — | 17,500 | |||||||||
Jack E. Thompson | 30,000 | — | 30,000 |
(1) | Represents cash retainers earned by our non-employee directors for service on our board of directors and committees. Messrs. Bhappu, Dolan and Machiels may elect to forgo such cash payments. | |
(2) | Represents the aggregate grant date fair value computed in accordance with FASB ASC 718. |
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• | each of the selling stockholders; | |
• | each person who we know beneficially owns more than 5% of our common stock; | |
• | each of our directors; | |
• | each of our named executive officers; and | |
• | all of our directors and our executive officers as a group. |
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Shares | ||||||||||||||||||||||||||||||||
Beneficially | ||||||||||||||||||||||||||||||||
Owned After | ||||||||||||||||||||||||||||||||
Shares | Number of Shares | Offering if | ||||||||||||||||||||||||||||||
Shares Beneficially | Beneficially | to be Sold | Underwriters’ | |||||||||||||||||||||||||||||
Owned Prior | Number | Owned After | if Underwriters’ | Option is | ||||||||||||||||||||||||||||
Name and Address of | to Offering | of Shares | Offering | Option is | Exercised in Full | |||||||||||||||||||||||||||
Beneficial Owner | Number | Percentage | Offered | Number | Percentage | Exercised in Full | Number | Percentage | ||||||||||||||||||||||||
Resource Capital Funds(1) | 19,591,746 | 23.4 | % | 4,998,159 | 14,593,587 | 17.4 | % | 5,747,883 | 13,843,863 | 16.5 | % | |||||||||||||||||||||
Pegasus Entities(2) | 11,279,199 | 13.4 | % | 2,877,500 | 8,401,699 | 10.0 | % | 3,309,126 | 7,970,073 | 9.5 | % | |||||||||||||||||||||
TNA Moly Group LLC(3) | 6,152,774 | 7.3 | % | 1,667,378 | 4,485,396 | 5.3 | % | 1,917,484 | 4,235,290 | 5.0 | % | |||||||||||||||||||||
KMSMITH, LLC | 217,389 | * | 55,614 | 161,775 | * | 63,956 | 153,433 | * | ||||||||||||||||||||||||
Baron Capital Group, Inc.(4) | 4,576,594 | 5.5 | % | — | 4,576,594 | 5.5 | % | — | 4,576,594 | 5.5 | % | |||||||||||||||||||||
Russell D. Ball | 9,500 | * | — | 9,500 | * | — | 9,500 | * | ||||||||||||||||||||||||
Ross R. Bhappu(5) | 19,592,346 | 23.4 | % | 4,998,159 | 14,594,187 | 17.4 | % | 5,747,883 | 13,844,463 | 16.5 | % | |||||||||||||||||||||
Brian T. Dolan(5) | 19,591,746 | 23.4 | % | 4,998,159 | 14,593,587 | 17.4 | % | 5,747,883 | 13,843,863 | 16.5 | % | |||||||||||||||||||||
Charles R. Henry | 134,401 | * | 60,000 | 74,401 | * | 69,000 | 65,401 | * | ||||||||||||||||||||||||
Mark S. Kristoff(6) | 6,339,890 | 7.6 | % | 1,710,599 | 4,629,291 | 5.5 | % | 1,967,188 | 4,372,702 | 5.2 | % | |||||||||||||||||||||
Alec Machiels | — | * | — | — | * | — | — | * | ||||||||||||||||||||||||
Mark A. Smith(7) | 1,102,666 | 1.3 | % | 152,100 | 950,566 | 1.1 | % | 174,915 | 927,751 | 1.1 | % | |||||||||||||||||||||
Jack E. Thompson | 97,018 | * | 24,194 | 72,824 | * | 27,823 | 69,195 | * | ||||||||||||||||||||||||
James S. Allen | 19,234 | * | — | 19,234 | * | — | 19,234 | * | ||||||||||||||||||||||||
Ksenia A. Adams | 528 | * | — | 528 | * | — | 528 | * | ||||||||||||||||||||||||
John F. Ashburn, Jr.(8) | 252,956 | * | 59,656 | 193,300 | * | 68,604 | 184,352 | * | ||||||||||||||||||||||||
John L. Burba | 309,262 | * | 74,571 | 234,691 | * | 85,757 | 223,505 | * | ||||||||||||||||||||||||
Alan Docter(9) | 6,341,890 | 7.6 | % | 1,710,599 | 4,631,291 | 5.5 | % | 1,967,188 | 4,374,702 | 5.2 | % | |||||||||||||||||||||
All executive officers and directors as a group (14 individuals) | 27,857,988 | 33.2 | % | 7,079,279 | 20,778,709 | 24.8 | % | 8,141,170 | 19,716,818 | 23.5 | % |
(1) | As reported on Schedule 13D/A filed on May 27, 2011, includes (a) 15,627,423 shares of our common stock held by Resource Capital Fund IV L.P., of which Resource Capital Associates IV L.P. is the general partner (RCA IV GP L.L.C. is the general partner of Resource Capital Associates IV L.P.) and (b) 3,964,323 shares of our common stock held by Resource Capital Fund V L.P., of which Resource Capital Associates V L.P. is the general partner (RCA V GP Ltd. is the general partner of Resource Capital Associates V L.P.). The manner in which the investments of Resource Capital Fund IV L.P. and Resource Capital Fund V L.P. are held, and any decisions concerning their ultimate disposition, are subject to the control of an investment committee consisting of certain partners of Resource Capital Funds: Hank Tuten, James McClements, Ryan Bennett, Russ Cranswick, Mr. Bhappu and Mr. Dolan. The investment committee is appointed by each of RCA IV GP L.L.C. and RCA V GP Ltd. The investment committee has voting and investment power with respect to the shares of our common stock owned by Resource Capital Fund IV L.P. and Resource Capital Fund V L.P. The address of Resource Capital Fund IV L.P. and Resource Capital Fund V L.P. is 1400 Sixteenth Street, Suite 200, Denver, Colorado 80202. Prior to the closing date, it is expected that 4,998,159 of the shares of common stock (or 5,747,883 shares if the underwriters exercise their option to purchase additional shares of common stock in full) referred to in (a) and (b) and being sold in this offering will be held by RCF US Holdings L.P., of which RCA IV GP L.L.C. is the general partner. |
(2) | As reported on Schedule 13D/A filed on May 27, 2011, includes (a) 6,135,886 shares of our common stock held by PP IV Mountain Pass II, LLC, (b) 2,972,111 shares of our common stock held by PP IV MP AIV 1, LLC, (c) 1,085,601 shares of our common stock held by PP IV MP AIV 2, LLC and (d) 1,085,601 shares of our common stock held by PP IV MP AIV 3, LLC. Pegasus Partners IV, L.P. controls PP IV Mountain Pass II, LLC and the general partner of Pegasus Partners IV, L.P. is Pegasus Investors IV, L.P. Pegasus Partners IV (AIV), L.P. controls PP IV MP AIV 1, LLC and the general partner |
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of Pegasus Partners IV (AIV), L.P. is Pegasus Investors IV, L.P. The general partner of Pegasus Investors IV, L.P. is Pegasus Investors IV GP, LLC, of which Pegasus Capital LLC is the managing member. Craig Cogut is the managing member of Pegasus Capital LLC. MP IH Holdings 1 LLC controls PP IV MP AIV 2, LLC. MP IH Holdings 2 LLC controls 96.4% of PP IV MP AIV 3, LLC. The non-member manager of each of MP IH Holdings 1 LLC and MP IH Holdings 2 LLC is Pegasus Capital Advisors IV, L.P., the general partner of which is Pegasus Capital Advisors IV GP, LLC, and the sole member of Pegasus Capital Advisors IV GP, LLC is Mr. Cogut. As a result of the foregoing, Mr. Cogut may be deemed to share voting and investment power of the shares of our common stock owned by each of PP IV Mountain Pass II, LLC, PP IV MP AIV 1, LLC, PP IV MP AIV 2, LLC and PP IV MP AIV 3, LLC, which we refer to collectively as the Pegasus Entities. Mr. Cogut disclaims beneficial ownership of any of our securities held by the Pegasus Entities, and this disclosure shall not be deemed to be an admission that Craig Cogut is the beneficial owner of such securities for purposes of Section 13(d) or any other purpose. The address of each of the Pegasus Entities is 505 Park Avenue, 22nd Floor, New York, New York 10022. |
(3) | TNA Moly Group LLC has sole voting and dispositive power over 6,152,774 shares of our common stock. Traxys is the sole voting member of TNA Moly Group LLC, appoints all of the managers and has shared voting and investment power with respect to the shares of our common stock owned by such entity. Traxys is indirectly controlled by Pegasus Capital LLC through T-II Holdings LLC, an Anguilla limited liability company. Mr. Cogut is the managing member of Pegasus Capital LLC. Mr. Cogut disclaims beneficial ownership of any of our securities held by TNA Moly Group LLC, and this disclosure shall not be deemed to be an admission that Craig Cogut is the beneficial owner of such securities for purposes of Section 13(d) or any other purpose. The address of TNA Moly Group LLC is 825 Third Avenue, New York, New York 10022. | |
(4) | As reported on Schedule 13G filed on February 14, 2011, Baron Capital Group, Inc., an investment adviser, reported having shared voting power with respect to 3,979,142 shares of our common stock and shared dispositive power with respect to 4,576,594 shares of our common stock. Baron Capital Group, Inc.’s power to vote and dispose of the shares is shared with BAMCO, Inc. and Baron Capital Management, Inc., which are subsidiaries of Baron Capital Group, Inc., and Ronald Baron, a control person of Baron Capital Group, Inc. BAMCO, Inc. reported having shared voting power with respect to 3,661,494 shares of our common stock and shared dispositive power with respect to 4,251,471 shares of our common stock. Baron Capital Management, Inc. reported having shared voting power with respect to 317,648 shares of our common stock and shared dispositive power with respect to 325,123 shares of our common stock. Ronald Baron reported having shared voting power with respect to 3,979,142 shares of our common stock and shared dispositive power with respect to 4,576,594 shares of our common stock. The advisory clients of BAMCO, Inc. and Baron Capital Management, Inc. have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of our common stock in their accounts. To the best of Baron Capital Group, Inc.’s knowledge, no such person has such interest relating to more than 5% of our outstanding common stock. The address of Baron Capital Group, Inc. is 767 Fifth Avenue, 49th Floor, New York, New York 10153. | |
(5) | Includes (a) 15,627,423 shares of our common stock held by Resource Capital Fund IV L.P., of which Resource Capital Associates IV L.P. is the general partner (RCA IV GP L.L.C. is the general partner of Resource Capital Associates IV L.P.) and (b) 3,964,323 shares of our common stock held by Resource Capital Fund V L.P., of which Resource Capital Associates V L.P. is the general partner (RCA V GP Ltd. is the general partner of Resource Capital Associates V L.P.). Mr. Bhappu and Mr. Dolan are members and shareholders and directors, respectively, of each of RCA IV GP L.L.C. and RCA V GP Ltd. and represent two of the seven members and shareholders and directors, respectively, of RCA IV GP L.L.C. and RCA V GP Ltd. As indicated in footnote (6) below, each of such entities has delegated to an investment committee consisting of certain partners of Resource Capital Funds, the voting and dispositive power over the shares held by Resource Capital Fund IV L.P. and Resource Capital Fund V L.P. Each of Mr. Bhappu and Mr. Dolan disclaims beneficial ownership of the shares of our common stock held by Resource Capital Fund IV L.P. and Resource Capital Fund V. L.P., except to the extent of his pecuniary interest therein. |
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(6) | Includes 6,152,774 shares of our common stock held by TNA Moly Group LLC. Mr. Kristoff is the Chief Executive Officer of Traxys and TNA Moly Group LLC. Mr. Kristoff disclaims beneficial ownership of the shares of our common stock held by TNA Moly Group LLC, except to the extent of his pecuniary interest therein, if any. | |
(7) | Includes 217,389 shares of our common stock held by KMSMITH LLC. Kimberly Smith, the wife of Mr. Smith, has sole voting and investment power with respect to the shares of our common stock held by KMSMITH LLC. Mr. Smith disclaims beneficial ownership of the shares of our common stock held by KMSMITH LLC, except to the extent of his pecuniary interest therein, if any. | |
(8) | Includes 100 shares of our common stock held as custodian for his minor son. Mr. Ashburn disclaims beneficial ownership of the shares of our common stock held as custodian for his minor son, except to the extent of his pecuniary interest therein, if any. | |
(9) | Includes 2,000 shares of common stock beneficially held by the wife of Mr. Docter and 6,152,774 shares of common stock held by TNA Moly Group LLC. Mr. Docter is the Chairman of Traxys and a Manager of TNA Moly Group LLC. Mr. Docter disclaims beneficial ownership of the shares of common stock held by his wife and TNA Moly Group LLC, except to the extent of his pecuniary interest therein, if any. |
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• | 350,000,000 shares are designated as common stock; and | |
• | 5,000,000 shares are designated as preferred stock. |
• | senior to (i) our common stock and (ii) each other class of capital stock and series of preferred stock established after the first original issue date of the Series A mandatory convertible preferred stock (which we refer to as the “initial issue date”) the terms of which do not expressly provide that such |
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class or series ranks senior to or on a parity with the Series A mandatory convertible preferred stock as to dividend rights and rights upon our liquidation,winding-up or dissolution (which we refer to collectively as “junior stock”); |
• | on parity with any class of capital stock or series of preferred stock established after the initial issue date the terms of which expressly provide that such class or series will rank on a parity with the Series A mandatory convertible preferred stock as to dividend rights and rights upon our liquidation,winding-up or dissolution (which we refer to collectively as “parity stock”); | |
• | junior to each class of capital stock or series of preferred stock established after the initial issue date the terms of which expressly provide that such class or series will rank senior to the Series A mandatory convertible preferred stock as to dividend rights and rights upon our liquidation,winding-up or dissolution (which we refer to collectively as “senior stock”); and | |
• | junior to our existing and future indebtedness. |
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• | amend or alter the provisions of our Amended and Restated Certificate of Incorporation or the certificate of designations for the shares of Series A mandatory convertible preferred stock so as to authorize or create, or increase the authorized amount of, any specific class or series of stock ranking senior to the Series A mandatory convertible preferred stock with respect to payment of dividends or the distribution of our assets upon our liquidation, dissolution or winding up; or | |
• | amend, alter or repeal the provisions of our Amended and Restated Certificate of Incorporation or the certificate of designations for the shares of Series A mandatory convertible preferred stock so as to adversely affect the special rights, preferences, privileges or voting powers of the shares of Series A mandatory convertible preferred stock; or |
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• | consummate a binding share exchange or reclassification involving the shares of Series A mandatory convertible preferred stock or a merger or consolidation of us with another entity, unless in each case: (i) shares of Series A mandatory convertible preferred stock remain outstanding and are not amended in any respect or, in the case of any such merger or consolidation with respect to which we are not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent; and (ii) such shares of Series A mandatory convertible preferred stock remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers, taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers of the Series A mandatory convertible preferred stock immediately prior to such consummation, taken as a whole. |
• | if the applicable market value of our common stock is greater than $60.00, which we call the “threshold appreciation price,” then the conversion rate will be 1.6667 shares of common stock per share of Series A mandatory convertible preferred stock (the “minimum conversion rate”), which is equal to $100 divided by the threshold appreciation price; | |
• | if the applicable market value of our common stock is less than or equal to the threshold appreciation price but equal to or greater than $50.00 (the “initial price,” which equals the price at which our common stock is being offered in this offering), then the conversion rate will be equal to $100 divided by the applicable market value of our common stock, which will be between 1.6667 and 2.0000 shares of common stock per share of Series A mandatory convertible preferred stock; or | |
• | if the applicable market value of our common stock is less than the initial price, then the conversion rate will be 2.0000 shares of common stock per share of Series A mandatory convertible preferred stock (the “maximum conversion rate”), which is equal to $100 divided by the initial price. |
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• | We issue common stock to all or substantially all holders of our common stock as a dividend or other distribution. | |
• | We issue to all or substantially all holders of our common stock rights or warrants (other than rights or warrants issued pursuant to a dividend reinvestment plan or share purchase plan or other similar plans) entitling them, for a period of up to 45 calendar days from the date of issuance of such rights or warrants, to subscribe for or purchase our shares of common stock at less than the current market price of our common stock. | |
• | We subdivide or combine our common stock. | |
• | We distribute to all or substantially all holders of our common stock evidences of our indebtedness, shares of capital stock, securities, rights to acquire our capital stock, cash or other assets, excluding any dividend, distribution, rights or warrants referred to in the bullets above and any dividend, distribution or spin-off referred to in the bullets below. | |
• | We make a distribution consisting exclusively of cash to all or substantially all holders of our common stock, subject to limited exceptions. | |
• | We or any of our subsidiaries successfully complete a tender or exchange offer pursuant to a Schedule TO or registration statement onForm S-4 for our common stock (excluding any securities convertible or exchangeable for our common stock), where the cash and the value of any other consideration included in the payment per share of our common stock exceeds the current market price of our common stock. |
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• | prior to such date, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; | |
• | upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding specified shares; or | |
• | at or subsequent to such date of the transaction that resulted in a person or entity becoming an interested stockholder, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 662/3% of the outstanding voting stock that is not owned by the interested stockholder. |
• | any merger or consolidation involving the corporation and the interested stockholder; | |
• | any sale, lease, exchange, mortgage, pledge, transfer or other disposition of 10% or more of the assets of the corporation to or with the interested stockholder; | |
• | subject to certain exceptions, any transaction which results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; | |
• | any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or | |
• | the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. |
• | the owner of 15% or more of the outstanding voting stock of the corporation; | |
• | an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of the corporation at any time within three years immediately prior to the relevant date; or | |
• | an affiliate or associate of the above. |
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• | the name and address of the stockholder and the beneficial owner, if any, on whose behalf the proposal or nomination is made; | |
• | the class and number of shares that are owned of record and beneficially by the stockholder proposing the business or nominating the nominee; | |
• | a representation that the stockholder giving the notice is a holder of record of shares of our voting stock entitled to vote at such annual meeting and intends to appear in person or by proxy at the annual meeting to propose the business or nominate the person or persons specified in the notice, as applicable; and | |
• | whether such stockholder or beneficial owner intends to deliver a proxy statement and forms of proxy to holders of at least the percentage of shares of our voting stock required to approve such proposal or nominate such nominee or nominees. |
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• | 1.0% of the number of shares of common stock then outstanding; or |
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• | the average weekly trading volume of our common stock on the NYSE during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
• | offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or mandatory convertible preferred stock or any securities convertible into or exercisable or exchangeable for shares of common stock or mandatory convertible preferred stock; | |
• | file any registration statement with the SEC relating to the offering of any shares of common stock or mandatory convertible preferred stock or any securities convertible into or exercisable or exchangeable for common stock or mandatory convertible preferred stock; or | |
• | enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the common stock or mandatory convertible preferred stock or such other securities |
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Number of | ||||
Name | Shares | |||
Morgan Stanley & Co. LLC | ||||
J.P. Morgan Securities LLC | ||||
Total | 10,000,000 | |||
Per Share | No Exercise | Full Exercise | ||||||||||
Public offering price | $ | $ | $ | |||||||||
Underwriting discounts and commissions to be paid by selling stockholders | $ | $ | $ | |||||||||
Proceeds, before expenses, to selling stockholders | $ | $ | $ |
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• | offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or mandatory convertible preferred stock or any securities convertible into or exercisable or exchangeable for shares of common stock, including the mandatory convertible preferred stock and the convertible senior notes; |
• | file any registration statement with the SEC relating to the offering of any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock, including the mandatory convertible preferred stock and the convertible senior notes; or |
• | enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the common stock or such other securities, |
• | issuances of shares of our common stock, options, warrants or other equity awards relating to our common stock pursuant to our stock incentive plan, provided that such shares, options, warrants or other equity awards are restricted through the restricted period; |
• | issuances of shares of common stock upon conversion of, or in connection with a dividend on, our mandatory convertible preferred stock or the convertible senior notes; |
• | in the case of any existing warrant or option to purchase, or other equity award for, shares of our common stock that is disclosed in this prospectus, the issuance by us of shares of common stock upon the exercise or vesting of such warrant, option or equity award, as the case may be, provided that no filing under Section 16(a) of the Exchange Act shall be required or shall be voluntarily made in connection with any such issuance by us during the restricted period; | |
• | the filing of a registration statement onForm S-8 or other appropriate forms as required by the Securities Act, and any amendments thereto, relating to our common stock or other equity-based securities issuable pursuant to the Plan; | |
• | the filing of a registration statement onForm S-3,Form S-1 or other appropriate forms as required by the Securities Act, and any amendments thereto, no earlier than August 5, 2011, registering the sale of shares of common stock by Silmet Grupp; |
• | the filing of a registration statement onForm S-4 or other appropriate forms as required by the Securities Act, and any amendments to such forms, related to our common stock or other of our equity securities issuable in connection with any merger, acquisition or other business combination, provided that three days’ advance notice of such filing is provided to Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC; |
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• | the issuance of shares of our common stock pursuant to the transaction contemplated under the terms of our memorandum of understanding with Sumitomo, provided that the recipient of such shares of common stock shall agree to be bound by the restrictions described above for the balance of the restricted period; |
• | any offer or entry into a contract to sell any shares of our common stock, options, warrants or other convertible securities relating to our common stock in connection with any bona fide merger, acquisition, business combination, joint venture or strategic or commercial relationship, to a third party or group of third parties (each an “M&A transaction”), and any public announcement relating to any such offer or entry into a contract, provided that three days’ advance notice of such announcement is provided to Morgan Stanley & Co. LLC; and J.P. Morgan Securities LLC or |
• | any issuance of shares of our common stock, options, warrants or other convertible securities relating to our common stock, in connection with any M&A transaction of which Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC have been advised three days in advance, provided that the recipient of such shares of common stock shall agree to be bound by the restrictions described above for the balance of the restricted period, and provided that the amount of shares of our common stock, options, warrants or other convertible securities relating to our common stock issued in each such M&A transaction does not exceed an amount greater than 15% of our common stock outstanding on the date of such M&A transaction. |
• | the exercise of a warrant or an option to purchase, or other equity award for, shares of our common stock (provided that any shares of common stock received pursuant to such exercise are subject to the same restrictions as those described above); | |
• | in the case of an option expiring during the restricted period, the sale or transfer of shares of our common stock to satisfy any payment or withholding obligations in connection with the exercise of an option to purchase, or other equity award for, shares of our common stock, or in connection with any cashless exercise of a warrant to purchase shares of our common stock; |
• | the conversion of mandatory convertible preferred stock or the convertible senior notes or other equity interests into shares of our common stock; |
• | transactions relating to shares of our common stock, mandatory convertible preferred stock, convertible senior notes or other securities acquired in open market transactions after the completion of this offering (provided that no filing under Section 16(a) of the Exchange Act shall be required or shall be voluntarily made in connection with subsequent sales of common stock, mandatory convertible preferred stock, convertible senior notes or other securities acquired in such open market transactions); |
• | transfers of shares of our common stock or any security convertible into our common stock, including the mandatory convertible preferred stock or the convertible senior notes (a) as a bona fide gift, (b) to any affiliate of the director, officer, or other holder of our outstanding common stock, (c) to any trust for the direct or indirect benefit of the director, officer or such other holder of our outstanding stock or an immediate family member of such individual or (d) to any immediate family member of the director, officer or such other holder of our outstanding stock, except that (c) and (d) do not apply to our stockholders that are not individuals; |
• | transfers of shares of our common stock or any security convertible into our common stock, including the mandatory convertible preferred stock or the convertible senior notes pursuant to the laws of descent or distribution, except that this exception does not apply to our stockholders that are not individuals; |
• | in the case of our stockholders that are not individuals only, distributions of shares of our common stock or any security convertible into shares of our common stock, including the mandatory convertible |
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preferred stock or the convertible senior notes by a stockholder to any partner, member or stockholders of such stockholder; and |
• | the establishment of a trading plan pursuant toRule 10b5-1 under the Exchange Act for the transfer of shares of our common stock, mandatory convertible preferred stock or the convertible senior notes (provided that such plan does not provide for the transfer of shares of our common stock, mandatory convertible preferred stock or the convertible senior notes during the restricted period and no public announcement or filing under the Exchange Act regarding the establishment of such plan shall be required of or voluntarily made by or on behalf of the director of officer or us during the restricted period); |
• | during the last 17 days of the restricted period we issue an earnings release or material news event relating to us occurs, or | |
• | prior to the expiration of the restricted period, we announce that we will release earnings results during the 16- day period beginning on the last day of the restricted period, in which case the restrictions described in the preceding paragraph will continue to apply until the expiration of the18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. |
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• | a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or |
• | a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the shares pursuant to an offer made under Section 275 of the SFA except: |
• | to an institutional investor (for corporations, under Section 274 of the SFA), to a relevant person defined in Section 275(2) of the SFA or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA; |
• | where no consideration is or will be given for the transfer; or |
• | where the transfer is by operation of law. |
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Assay | The analysis of the proportions of metals in ore, or the testing of an ore or mineral for composition, purity, weight, or other properties of commercial interest. | |
Bastnasite | Bastnasite is a mixed Lanthanide fluoro-carbonate mineral (Ln F CO3) that currently provides the bulk of the world’s supply of the light REEs. Bastnasite and monazite are the two most common sources of cerium and other REEs. Bastnasite is found in carbonatites, igneous carbonate rocks that melt at unusually low temperatures. | |
Cerium | Cerium (Ce) is a soft, silvery, ductile metal which easily oxidizes in air. Cerium is the most abundant of the REEs, and is found in a number of minerals, including monazite and bastnasite. Cerium has two relatively stable oxidation states, enabling both the storage of oxygen and its widespread use in catalytic converters. Cerium is also widely used in glass polish. | |
Ceric Hydrate | Ceric hydrate is a form of cerium that is precipitated during the separation process and can be dried to produce cerium oxide. | |
Concentrate | A mineral processing product that generally describes the material that is produced after crushing and grinding ore effecting significant separation of gangue (waste) minerals from the desired metal and/or metal minerals, and discarding the waste minerals. The resulting “concentrate” of minerals typically has an order of magnitude higher content of minerals than the beginning ore material. | |
Cut-off grade | The lowest grade of mineralized material that qualifies as ore in a given deposit. The grade above which minerals are considered economically mineable considering the following parameters: | |
estimates over the relevant period of mining costs, ore treatment costs, general and administrative costs, refining costs, royalty expenses, by-product credits, process and refining recovery rates and price. | ||
Didymium | Didymium is a combination of neodymium and praseodymium, approximately 75% neodymium and approximately 25% praseodymium. | |
Dysprosium | Dysprosium (Dy) is used in high power neodymium iron boron magnets to enhance thermal stability. | |
Europium | Europium (Eu) is desirable due to its photon emission. Excitation of the europium atom, by absorption of electrons or by UV radiation, results in changes in energy levels that create a visible emission. Almost all practical uses of europium utilize this luminescent behavior. | |
Gadolinium | Gadolinium (Gd) absorbs neutrons and therefore is used for shielding in neutron radiography and in nuclear reactors. Because of its paramagnetic properties, solutions of organic gadolinium complexes and gadolinium compounds are the most popular intravenous medical magnetic resonance imaging contrast agents in MRI. | |
Grade | The average REE content, as determined by assay of a metric ton of ore. | |
Lanthanum | Lanthanum (La) is the first member of the Lanthanide series. Lanthanum is a strategically important rare earth element due to its use in fluid bed cracking catalysts, FCCs, which are used in the production of transportation and aircraft fuel. Lanthanum is also used in fuel cells and batteries. | |
Mill | A processing plant that produces a concentrate of the valuable minerals contained in an ore. | |
Mineralization | The extent and form of metal atom deposition as found in rocks or ore or the process by which the metals came to be deposited there. |
G-1
Monazite | Monazite is a reddish-brown phosphate mineral. Monazite minerals are typically accompanied by concentrations of uranium and thorium. This has historically limited the processing of Monazite, however this mineral is becoming more attractive because it typically has elevated concentrations of heavy rare earths. | |
Neodymium | Neodymium (Nd) is used in the production of NdFeB permanent magnets. These permanent magnets, which maximize the power/cost ratio, are used in a large variety of motors and mechanical systems. Cellular phones, vehicle systems and certain lasers contain both neodymium magnets and capacitors, which produce powerful electronic generation and boost the power of these devices. | |
Ore | That part of a mineral deposit which could be economically and legally extracted or produced at the time of reserve determination. | |
Overburden | In surface mining, overburden is the material that overlays an ore deposit. Overburden is removed prior to mining. | |
Praseodymium | Praseodymium (Pr) comprising about 4% of the lanthanide content of bastnasite, is a common coloring pigment. Along with neodymium, praseodymium is used to filter certain wavelengths of light. Praseodymium is used in photographic filters, airport signal lenses, and welder’s glasses. As part of an alloy, praseodymium is used in permanent magnet systems designed to make smaller and lighter motors. Praseodymium is also used in automobile and other internal combustion engine pollution control catalysts. | |
Probable reserves | Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation. | |
Proven reserves | Reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling; and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well established. | |
Recovery | The percentage of contained metal actually extracted from ore in the course of processing such ore. | |
Reserves | That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. Same definition as ‘ore’ | |
Samarium | Samarium (Sm) is predominantly used to produce high temperature, high power samarium cobalt magnets. Although these magnets are less powerful than NdFeB magnets, they can be used over a wider range of conditions. | |
Strike | The direction of the line of intersection of a mineral deposit with the horizontal plane of the ground. The strike of a deposit is the direction of a straight line that connects two points of equal elevation on the deposit. | |
Tailings | That portion of the mined material that remains after the valuable minerals have been extracted. | |
Terbium | Terbium (Tb) is a lanthanide series element used in x-ray and color television tubes as well as high grade rare earth magnets. | |
Yttrium | Yttrium (Y), although not a lanthanide series element, is often considered to be a rare earth element and its behavior is similar to heavy rare earth elements. It is predominantly utilized in lighting applications and ceramics. Other uses include resonators, lasers, microwave communication devices and other electronic devices. |
G-2
Page | ||||
AUDITED CONSOLIDATED FINANCIAL STATEMENTS | ||||
MOLYCORP, LLC | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||
F-24 | ||||
F-25 | ||||
F-26 | ||||
F-27 | ||||
F-28 |
F-1
F-2
December 31, 2010 | December 31, 2009 | |||||||
(In thousands, except share amounts) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 316,430 | $ | 6,929 | ||||
Trade accounts receivable | 16,421 | 1,221 | ||||||
Inventory (Note 4e) | 18,822 | 8,545 | ||||||
Prepaid expenses and other | 1,759 | 1,825 | ||||||
Total current assets | 353,432 | 18,520 | ||||||
Non-current assets: | ||||||||
Deposits | $ | 26,200 | $ | — | ||||
Property, plant and equipment, net (Note 4f) | 93,966 | 66,352 | ||||||
Inventory (Note 4e) | 5,212 | 12,090 | ||||||
Intangible asset, net | 639 | 704 | ||||||
Investments | 111 | — | ||||||
Total non-current assets | 126,128 | 79,146 | ||||||
Total assets | $ | 479,560 | $ | 97,666 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 13,009 | $ | 2,886 | ||||
Accrued expenses (Note 4k) | 4,225 | 5,944 | ||||||
Short-term borrowing — related party (Note 10) | 3,085 | — | ||||||
Current portion of asset retirement obligation (Note 4l) | 393 | 693 | ||||||
Total current liabilities | 20,712 | 9,523 | ||||||
Non-current liabilities: | ||||||||
Asset retirement obligation (Note 4l) | $ | 12,078 | $ | 13,509 | ||||
Other non-current liabilities | 257 | 19 | ||||||
Total non-current liabilities | 12,335 | 13,528 | ||||||
Total liabilities | $ | 33,047 | $ | 23,051 | ||||
Commitments and contingencies (Note 6) | ||||||||
Stockholders’ equity: | ||||||||
Common stock, $0.001 par value; 350,000,000 shares authorized at December 31, 2010; 82,291,200 and 0 shares outstanding at December 31, 2010 and 2009, respectively | 82 | — | ||||||
Class A common stock, $0.001 par value; 0 and 60,000,000 shares authorized at December 31, 2010 and 2009, respectively; 0 and 44,998,185 shares outstanding at December 31, 2010 and 2009, respectively | — | 45 | ||||||
Class B common stock, $0.001 par value; 0 and 4,000,000 shares authorized at December 31, 2010 and 2009, respectively; 0 and 0 shares outstanding at December 31, 2010 and 2009, respectively | — | — | ||||||
Additional paid-in capital | 539,866 | 117,231 | ||||||
Deficit accumulated during the development stage | (93,435 | ) | (42,661 | ) | ||||
Total stockholders’ equity | 446,513 | 74,615 | ||||||
Total liabilities and stockholders’ equity | $ | 479,560 | $ | 97,666 | ||||
F-3
Total from | ||||||||||||||||
Year Ended | June 12, 2008 | June 12, 2008 | ||||||||||||||
December 31, | (Inception) Through | (Inception) Through | ||||||||||||||
2010 | 2009 | December 31, 2008 | December 31, 2010 | |||||||||||||
(In thousands, except share and per share amounts) | ||||||||||||||||
Sales | $ | 35,157 | $ | 7,093 | $ | 2,137 | $ | 44,387 | ||||||||
Operating costs and expenses: | ||||||||||||||||
Cost of goods sold | (37,591 | ) | (21,785 | ) | (13,027 | ) | (72,403 | ) | ||||||||
Selling, general and administrative | (18,774 | ) | (12,444 | ) | (2,829 | ) | (34,047 | ) | ||||||||
Stock-based compensation | (28,739 | ) | (241 | ) | (150 | ) | (29,130 | ) | ||||||||
Depreciation and amortization | (319 | ) | (191 | ) | (19 | ) | (529 | ) | ||||||||
Accretion expense | (912 | ) | (1,006 | ) | (250 | ) | (2,168 | ) | ||||||||
Operating loss | (51,178 | ) | (28,574 | ) | (14,138 | ) | (93,890 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Other income (expense) | 155 | 181 | 54 | 390 | ||||||||||||
Interest income (expense), net of amount capitalized | 249 | (194 | ) | 10 | 65 | |||||||||||
Net loss | $ | (50,774 | ) | $ | (28,587 | ) | $ | (14,074 | ) | $ | (93,435 | ) | ||||
Weighted average shares outstanding (Common shares)(1) | ||||||||||||||||
Basic | 62,332,054 | 39,526,568 | 38,829,225 | 48,306,760 | ||||||||||||
Diluted | 62,332,054 | 39,526,568 | 38,829,225 | 48,306,760 | ||||||||||||
Loss per share of common stock: | ||||||||||||||||
Basic | $ | (0.81 | ) | $ | (0.72 | ) | $ | (0.36 | ) | $ | (1.93 | ) | ||||
Diluted | $ | (0.81 | ) | $ | (0.72 | ) | $ | (0.36 | ) | $ | (1.93 | ) | ||||
(1) | Weighted average shares outstanding include the retroactive treatment of exchange ratios for conversion of Class A common shares and Class B common shares to common stock in conjunction with the initial public offering. |
F-4
Deficit | ||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||
Additional | During the | Total | ||||||||||||||||||||||||||
Class A Common Stock | Common Stock | Paid-In | Development | Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Stage | Equity | ||||||||||||||||||||||
(In thousands, except share amounts) | ||||||||||||||||||||||||||||
Balance at June 12, 2008 (Inception) | — | $ | — | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Issuance of shares | 38,762,268 | 39 | — | — | 91,961 | — | 92,000 | |||||||||||||||||||||
Share based compensation | 66,957 | — | — | — | 150 | — | 150 | |||||||||||||||||||||
Net loss | (14,074 | ) | (14,074 | ) | ||||||||||||||||||||||||
Balance at December 31, 2008 | 38,829,225 | $ | 39 | — | $ | — | $ | 92,111 | $ | (14,074 | ) | $ | 78,076 | |||||||||||||||
Issuance of shares | 3,844,858 | 4 | — | — | 18,000 | — | 18,004 | |||||||||||||||||||||
Conversion of short term borrowings from member plus related accrued interest in common shares | 2,303,033 | 2 | — | — | 6,829 | — | 6,831 | |||||||||||||||||||||
Exercise of employee options | 21,069 | — | — | — | 50 | — | 50 | |||||||||||||||||||||
Share based compensation | — | — | — | — | 241 | — | 241 | |||||||||||||||||||||
Net loss | — | — | — | — | — | (28,587 | ) | (28,587 | ) | |||||||||||||||||||
Balance at December 31, 2009 | 44,998,185 | $ | 45 | — | $ | — | $ | 117,231 | $ | (42,661 | ) | $ | 74,615 | |||||||||||||||
Issuance of shares | 5,767,670 | 6 | — | — | 14,994 | — | 15,000 | |||||||||||||||||||||
Exercise of employee options | 126,405 | — | — | — | 300 | — | 300 | |||||||||||||||||||||
Conversion of Class A common stock to common stock in conjunction with the initial public offering | (50,892,260 | ) | (51 | ) | 50,892,260 | 51 | — | — | — | |||||||||||||||||||
Sale of shares of common stock at $14.00 per share in initial public offering, net of underwriting fees and other offering costs of $29.2 million | — | — | 29,128,700 | 29 | 378,604 | — | 378,633 | |||||||||||||||||||||
Stock-based compensation expense | — | — | 2,270,240 | 2 | 28,737 | — | 28,739 | |||||||||||||||||||||
Net loss | — | — | — | — | — | (50,774 | ) | (50,774 | ) | |||||||||||||||||||
Balance at December 31, 2010 | — | $ | — | 82,291,200 | $ | 82 | $ | 539,866 | $ | (93,435 | ) | $ | 446,513 | |||||||||||||||
F-5
Total from | ||||||||||||||||
Year Ended | June 12, 2008 | June 12, 2008 | ||||||||||||||
December 31, | (Inception) through | (Inception) through | ||||||||||||||
2010 | 2009 | December 31, 2008 | December 31, 2010 | |||||||||||||
(In thousands) | ||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net loss | $ | (50,774 | ) | $ | (28,587 | ) | $ | (14,074 | ) | $ | (93,435 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
Depreciation and amortization | 6,015 | 3,896 | 936 | 10,847 | ||||||||||||
Accretion of asset retirement obligation | 912 | 1,006 | 250 | 2,168 | ||||||||||||
Non-cash inventory write-downs | 3,473 | 9,035 | 9,509 | 22,017 | ||||||||||||
Non-cash share-based compensation expense | 28,739 | 241 | 150 | 29,130 | ||||||||||||
Impairment of fixed assets | 3,114 | — | — | 3,114 | ||||||||||||
(Gain)/loss on sale of assets and settlement of ARO | (59 | ) | 2 | — | (57 | ) | ||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | (15,200 | ) | 125 | (1,897 | ) | (16,972 | ) | |||||||||
Inventory | (6,872 | ) | (13,557 | ) | (3,440 | ) | (23,869 | ) | ||||||||
Prepaid expenses and other | 251 | 360 | (1,634 | ) | (1,023 | ) | ||||||||||
Accounts payable | 3,797 | (254 | ) | 642 | 4,185 | |||||||||||
Asset retirement obligation | (632 | ) | (387 | ) | — | (1,019 | ) | |||||||||
Accrued expenses | (1,481 | ) | 5,749 | 2,218 | 6,486 | |||||||||||
Net cash used in operating activities | (28,717 | ) | (22,371 | ) | (7,340 | ) | (58,428 | ) | ||||||||
Cash flows from investing activities: | ||||||||||||||||
Acquisition of the Mountain Pass facility | — | — | (82,150 | ) | (82,150 | ) | ||||||||||
Proceeds from sale of investment in joint venture | — | 9,700 | — | 9,700 | ||||||||||||
Deposits | (26,200 | ) | — | — | (26,200 | ) | ||||||||||
Capital expenditures | (33,129 | ) | (7,285 | ) | (321 | ) | (40,735 | ) | ||||||||
Investments | (111 | ) | — | — | (111 | ) | ||||||||||
Proceeds from sale of assets | 9 | 5 | — | 14 | ||||||||||||
Net cash used in investing activities | (59,431 | ) | 2,420 | (82,471 | ) | (139,482 | ) | |||||||||
Cash flows provided by financing activities: | ||||||||||||||||
Capital contributions from original stockholders | 15,000 | 18,004 | 92,000 | 125,004 | ||||||||||||
Repayments of short-term borrowings — related party (Note 10) | (1,107 | ) | — | — | (1,107 | ) | ||||||||||
Net proceeds from sale of common stock in conjunction with the initial public offering | 378,633 | — | — | 378,633 | ||||||||||||
Payments of deferred financing costs | (185 | ) | — | — | (185 | ) | ||||||||||
Proceeds from exercise of options | 300 | 50 | — | 350 | ||||||||||||
Proceeds from short-term borrowings — related party (Note 10) | 5,008 | 6,637 | — | 11,645 | ||||||||||||
Net cash provided by financing activities | 397,649 | 24,691 | 92,000 | 514,340 | ||||||||||||
Net change in cash and cash equivalents | 309,501 | 4,740 | 2,189 | 316,430 | ||||||||||||
Cash and cash equivalents at beginning of the period | 6,929 | 2,189 | — | — | ||||||||||||
Cash and cash equivalents at end of period | $ | 316,430 | $ | 6,929 | 2,189 | $ | 316,430 | |||||||||
Supplemental disclosure of non-cash activities: | ||||||||||||||||
Conversion of short-term borrowings from member plus accrued interest, into common shares | $ | — | $ | 6,831 | $ | — | ||||||||||
Change in accrued capital expenditures | $ | 5,510 | $ | (150 | ) | $ | 438 | |||||||||
F-6
(1) | Company Background |
• | Clean-energy technologies such as hybrid and electric vehicles, wind turbines and compact florescent lighting; | |
• | High-technology applications including cell phones, personal digital assistant devices, digital music players, hard disk drives used in computers, computing devices, “ear bud” speakers and microphones, as well as fiber optics, lasers and optical temperature sensors; | |
• | Critical defense applications such as guidance and control systems, communications, global positioning systems, radar and sonar; and | |
• | Advanced water treatment applications including those for industrial, military, homeland security, domestic and foreign aid use. |
F-7
(A Company in the Development Stage)
Notes to Consolidated Financial Statements — (Continued)
(2) | Basis of Presentation |
(3) | Capital Requirements |
(4) | Summary of Significant Accounting Policies |
(a) | Use of Estimates |
F-8
(A Company in the Development Stage)
Notes to Consolidated Financial Statements — (Continued)
(b) | Revenue and Cost of Goods Sold |
(c) | Cash and Cash Equivalents |
(d) | Trade Accounts Receivable |
(e) | Inventories |
F-9
(A Company in the Development Stage)
Notes to Consolidated Financial Statements — (Continued)
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
Current: | ||||||||
Concentrate stockpiles | $ | 4,206 | $ | 20 | ||||
Work in process | 3,582 | 4,777 | ||||||
Finished goods | 9,307 | 2,685 | ||||||
Materials and supplies | 1,727 | 1,063 | ||||||
Total current | $ | 18,822 | $ | 8,545 | ||||
Long term: | ||||||||
Concentrate stockpiles | $ | 5,108 | $ | 11,844 | ||||
Work in process | — | — | ||||||
Finished goods | 104 | 246 | ||||||
Total long term | $ | 5,212 | $ | 12,090 | ||||
(f) | Property, Plant and Equipment, net |
F-10
(A Company in the Development Stage)
Notes to Consolidated Financial Statements — (Continued)
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
Land | $ | 800 | $ | 800 | ||||
Land improvements (15 years) | 15,415 | 17,954 | ||||||
Buildings and improvements (4 to 27 years) | 6,892 | 8,458 | ||||||
Plant and equipment (2 to 12 years) | 19,560 | 12,065 | ||||||
Vehicles (7 years) | 1,049 | 1,023 | ||||||
Computer software (5 years) | 1,563 | 1,116 | ||||||
Furniture and fixtures (5 years) | 170 | 41 | ||||||
Construction in progress | 34,809 | 6,506 | ||||||
Mineral properties | 23,968 | 23,138 | ||||||
Property, plant and equipment at cost | 104,226 | 71,101 | ||||||
Less accumulated depreciation | (10,260 | ) | (4,749 | ) | ||||
Property, plant and equipment, net | $ | 93,966 | $ | 66,352 | ||||
(g) | Mineral Properties and Development Costs |
(h) | Research and Development |
F-11
(A Company in the Development Stage)
Notes to Consolidated Financial Statements — (Continued)
(i) | Intangible Asset |
(j) | Investment in Joint Venture |
(k) | Accrued Expenses |
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
Waste disposal accrual | $ | 326 | $ | 1,500 | ||||
Accrued bonus | 554 | 1,445 | ||||||
Defined contribution plan | 1,199 | 988 | ||||||
Other accrued expenses | 2,146 | 2,011 | ||||||
Total accrued expenses | $ | 4,225 | $ | 5,944 | ||||
(l) | Asset Retirement Obligation |
F-12
(A Company in the Development Stage)
Notes to Consolidated Financial Statements — (Continued)
Year Ended | Year Ended | |||||||
December 31, 2010 | December 31, 2009 | |||||||
Balance at beginning of period | $ | 14,202 | $ | 13,583 | ||||
Obligations settled | (632 | ) | (387 | ) | ||||
Accretion expense | 912 | 1,006 | ||||||
Revisions in estimated cash flows | (1,939 | ) | — | |||||
Gain on settlement | (72 | ) | — | |||||
Balance at end of period | $ | 12,471 | $ | 14,202 | ||||
(m) | Income Taxes |
F-13
(A Company in the Development Stage)
Notes to Consolidated Financial Statements — (Continued)
December 31, 2010 | ||||
(in thousands) | ||||
Deferred income tax assets: | ||||
Vacation accrual | $ | 106 | ||
Inventory | 1,133 | |||
Asset retirement obligation | 656 | |||
Mineral resources | 16,516 | |||
Net operating losses | 6,750 | |||
Other | 62 | |||
$ | 25,223 | |||
Deferred income tax liabilities: | ||||
Development costs | $ | (96 | ) | |
Property, plant and equipment | (2,397 | ) | ||
$ | (2,493 | ) | ||
Net deferred income tax assets: | $ | 22,730 | ||
Valuation allowance | (22,730 | ) | ||
Total net deferred income tax assets: | $ | — | ||
(n) | Stockholders’ Equity |
(o) | Earnings (loss) per Share |
F-14
(A Company in the Development Stage)
Notes to Consolidated Financial Statements — (Continued)
(p) | Comprehensive income (loss) |
(5) | Employee Benefit Plans |
(6) | Commitments and Contingencies |
(a) | Future Operating Lease Commitments |
F-15
(A Company in the Development Stage)
Notes to Consolidated Financial Statements — (Continued)
(b) | Plant Modernization and Expansion Commitments |
(c) | Completion Bonus |
(d) | Labor Contract |
(e) | Reclamation Surety Bonds |
(f) | Licenses and Permits |
F-16
(A Company in the Development Stage)
Notes to Consolidated Financial Statements — (Continued)
(7) | Stock-Based Compensation |
F-17
(A Company in the Development Stage)
Notes to Consolidated Financial Statements — (Continued)
Number of Shares of | ||||
Restricted Stock | ||||
Russell D. Ball — Director | 7,500 | |||
Mark A. Smith — President and CEO | 6,000 | |||
James S. Allen — CFO and Treasurer | 18,000 | |||
John F. Ashburn, Jr. — EVP and General Counsel | 3,000 | |||
John L. Burba — EVP and Chief Technology Officer | 3,000 |
(8) | Deposits |
(9) | Concentrations |
(a) | Limited Number of Products |
Year Ended | Year Ended | |||||||
December 31, 2010 | December 31, 2009 | |||||||
Didymium Oxide | $ | 9.0 | — | |||||
Ceric Hydrate | $ | 8.7 | — | |||||
Lanthanum products | $ | 13.6 | $ | 6.4 | ||||
Other | $ | 3.9 | $ | 0.7 |
F-18
(A Company in the Development Stage)
Notes to Consolidated Financial Statements — (Continued)
(b) | Limited Number of Customers |
Year Ended | Year Ended | |||||||
December 31, 2010 | December 31, 2009 | |||||||
Mitsubishi Unimetals USA | $ | 8.5 | — | |||||
W.R. Grace & Co. — Conn. | $ | 7.4 | $ | 1.9 | ||||
Chuden Rare Earth Co. Ltd. | $ | 5.4 | — | |||||
Shin-Etsu Chemical Co. | $ | 4.1 | — | |||||
Corning Inc. | $ | 3.5 | $ | 0.3 | ||||
3M Company | $ | 2.5 | $ | 0.4 | ||||
Albemarle Corporation | — | $ | 3.9 |
(c) | Single Geographic Location |
(10) | Related Party Transactions |
F-19
(A Company in the Development Stage)
Notes to Consolidated Financial Statements — (Continued)
(11) | Unaudited Supplementary Data |
2010 | ||||||||||||||||
Three Months Ended | ||||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||
Sales | $ | 3,018 | $ | 1,904 | $ | 8,533 | $ | 21,702 | ||||||||
Cost of goods sold | (5,950 | ) | (5,576 | ) | (7,742 | ) | (18,323 | ) | ||||||||
Selling, general and administrative expense | (4,480 | ) | (4,254 | ) | (4,117 | ) | (5,923 | ) | ||||||||
Stock-based compensation | — | (15,133 | ) | (6,527 | ) | (7,079 | ) | |||||||||
Depreciation and amortization expense | (95 | ) | (61 | ) | (83 | ) | (80 | ) | ||||||||
Accretion expense | (263 | ) | (216 | ) | (216 | ) | (217 | ) | ||||||||
Operating loss | (7,770 | ) | (23,336 | ) | (10,152 | ) | (9,920 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Other income (expense) | 21 | 45 | 14 | 75 | ||||||||||||
Interest income (expense), net of capitalized amount | — | — | (7 | ) | 256 | |||||||||||
Net loss | $ | (7,749 | ) | $ | (23,291 | ) | $ | (10,145 | ) | $ | (9,589 | ) | ||||
Weighted average shares outstanding (Common shares)(1) | ||||||||||||||||
Basic | 48,155,533 | 49,666,732 | 69,550,649 | 81,509,452 | ||||||||||||
Diluted | 48,155,533 | 49,666,732 | 69,550,649 | 81,509,452 | ||||||||||||
Loss per share of common stock(1): | ||||||||||||||||
Basic | $ | (0.16 | ) | $ | (0.47 | ) | $ | (0.15 | ) | $ | (0.12 | ) | ||||
Diluted | $ | (0.16 | ) | $ | (0.47 | ) | $ | (0.15 | ) | $ | (0.12 | ) |
F-20
(A Company in the Development Stage)
Notes to Consolidated Financial Statements — (Continued)
2009 | ||||||||||||||||
Three Months Ended | ||||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||
Sales | $ | 1,699 | $ | 1,230 | $ | 1,960 | $ | 2,204 | ||||||||
Cost of goods sold | (4,727 | ) | (4,897 | ) | (5,272 | ) | (6,889 | ) | ||||||||
Selling, general and administrative expense | (2,322 | ) | (2,886 | ) | (3,172 | ) | (4,064 | ) | ||||||||
Stock-based compensation | — | (241 | ) | — | — | |||||||||||
Depreciation and amortization expense | (21 | ) | (42 | ) | (60 | ) | (68 | ) | ||||||||
Accretion expense | (252 | ) | (251 | ) | (252 | ) | (251 | ) | ||||||||
Operating loss | (5,623 | ) | (7,087 | ) | (6,796 | ) | (9,068 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Other income (expense) | 22 | 83 | 19 | 57 | ||||||||||||
Interest income (expense), net of capitalized amount | — | 16 | (126 | ) | (84 | ) | ||||||||||
Net loss | $ | (5,601 | ) | $ | (6,988 | ) | $ | (6,903 | ) | $ | (9,095 | ) | ||||
Weighted average shares outstanding (Common shares)(1) | ||||||||||||||||
Basic | 38,829,225 | 38,829,225 | 38,835,179 | 41,589,904 | ||||||||||||
Diluted | 38,829,225 | 38,829,225 | 38,835,179 | 41,589,904 | ||||||||||||
Loss per share of common stock(1): | ||||||||||||||||
Basic | $ | (0.14 | ) | $ | (0.18 | ) | $ | (0.18 | ) | $ | (0.22 | ) | ||||
Diluted | $ | (0.14 | ) | $ | (0.18 | ) | $ | (0.18 | ) | $ | (0.22 | ) |
(1) | Weighted average shares outstanding include the retroactive treatment of exchange ratios for conversion of Class A common stock and Class B common stock to common stock in conjunction with the initial public offering. |
(12) | Subsequent Events |
F-21
(A Company in the Development Stage)
Notes to Consolidated Financial Statements — (Continued)
• | on an actual basis; and | |
• | on a pro-forma basis to give effect to the proceeds from the Series A mandatory convertible preferred stock offering, resulting in a $173.1 million increase in current assets and a corresponding increase in equity. |
Actual | Pro Forma | |||||||
(In thousands) | ||||||||
Total current assets | $ | 353,432 | $ | 526,532 | ||||
Total non-current assets | 126,128 | 126,128 | ||||||
Total assets | 479,560 | 652,660 | ||||||
Total current liabilities | 20,712 | 20,712 | ||||||
Total non-current liabilities | 12,335 | 12,335 | ||||||
Total liabilities | 33,047 | 33,047 | ||||||
Total stockholders’ equity | 446,513 | 619,613 | ||||||
Total liabilities and stockholders’ equity | $ | 479,560 | $ | 652,660 | ||||
(13) | Revision of Financial Statements for December 31, 2010 |
Year Ended and as of | ||||||||||||
December 31, 2010 | ||||||||||||
As | ||||||||||||
Previously | ||||||||||||
Reported | Revision | As Revised | ||||||||||
(In thousands, except per share amounts) | ||||||||||||
Cost of goods sold | $ | (35,902 | ) | $ | (1,689 | ) | $ | (37,591 | ) | |||
Net loss | (49,085 | ) | (1,689 | ) | (50,774 | ) | ||||||
Loss per basic/diluted common share | (0.79 | ) | (0.02 | ) | (0.81 | ) | ||||||
Current inventory | 20,511 | (1,689 | ) | 18,822 | ||||||||
Current assets | 355,121 | (1,689 | ) | 353,432 | ||||||||
Total assets | 481,249 | (1,689 | ) | 479,560 | ||||||||
Total stockholders’ equity | 448,202 | (1,689 | ) | 446,513 |
F-22
(A Company in the Development Stage)
Notes to Consolidated Financial Statements — (Continued)
Total from June 12, 2008 | ||||||||||||
(Inception) through | ||||||||||||
December 31, 2010 | ||||||||||||
As | ||||||||||||
Previously | ||||||||||||
Reported | Revision | As Revised | ||||||||||
(In thousands, except per share amounts) | ||||||||||||
Cost of goods sold | $ | (70,714 | ) | $ | (1,689 | ) | $ | (72,403 | ) | |||
Net loss | (91,746 | ) | (1,689 | ) | (93,435 | ) | ||||||
Net loss per basic/diluted common share | (1.90 | ) | (0.03 | ) | (1.93 | ) |
F-23
March 31, 2011 | December 31, 2010 | |||||||
(In thousands, except share and | ||||||||
per share amounts) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 492,495 | $ | 316,430 | ||||
Trade accounts receivable | 17,581 | 16,421 | ||||||
Inventory (Note 4e) | 21,385 | 18,822 | ||||||
Prepaid expenses and other | 2,633 | 1,759 | ||||||
Total current assets | 534,094 | 353,432 | ||||||
Non-current assets: | ||||||||
Deposits | $ | 27,700 | $ | 26,200 | ||||
Property, plant and equipment, net (Note 4g) | 133,752 | 93,966 | ||||||
Inventory (Note 4e) | 3,194 | 5,212 | ||||||
Intangible asset, net | 622 | 639 | ||||||
Other assets | 111 | 111 | ||||||
Total non-current assets | 165,379 | 126,128 | ||||||
Total assets | $ | 699,473 | $ | 479,560 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 29,988 | $ | 13,009 | ||||
Accrued expenses (Note 4j) | 6,408 | 4,225 | ||||||
Short-term borrowing — related party (Note 8) | 2,870 | 3,085 | ||||||
Current portion of asset retirement obligation (Note 4k) | 394 | 393 | ||||||
Total current liabilities | 39,660 | 20,712 | ||||||
Non-current liabilities: | ||||||||
Asset retirement obligation (Note 4k) | $ | 12,774 | $ | 12,078 | ||||
Other non-current liabilities | 148 | 257 | ||||||
Total non-current liabilities | 12,922 | 12,335 | ||||||
Total liabilities | $ | 52,582 | $ | 33,047 | ||||
Commitments and contingencies (Note 5) | ||||||||
Stockholders’ equity: | ||||||||
Common stock, $0.001 par value; 350,000,000 shares authorized at March 31, 2011 (Note 4m) | 82 | 82 | ||||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized at March 31, 2011 (Note 4m) | 2 | — | ||||||
Additional paid-in capital | 742,440 | 539,866 | ||||||
Deficit accumulated during the development stage | (95,633 | ) | (93,435 | ) | ||||
Total stockholders’ equity | 646,891 | 446,513 | ||||||
Total liabilities and stockholders’ equity | $ | 699,473 | $ | 479,560 | ||||
F-24
(A Company in the Development Stage)
Condensed Consolidated Statements of Operations (Unaudited)
Total from | ||||||||||||
Three Months Ended | June 12, 2008 | |||||||||||
March 31, | (Inception) Through | |||||||||||
2011 | 2010 | March 31, 2011 | ||||||||||
(In thousands, except share and per share amounts) | ||||||||||||
Sales | $ | 26,261 | $ | 3,018 | $ | 70,648 | ||||||
Operating costs and expenses: | ||||||||||||
Cost of goods sold | (16,677 | ) | (5,950 | ) | (89,080 | ) | ||||||
Selling, general and administrative | (8,339 | ) | (4,480 | ) | (42,386 | ) | ||||||
Stock-based compensation | (2,899 | ) | — | (32,029 | ) | |||||||
Depreciation and amortization | (83 | ) | (95 | ) | (612 | ) | ||||||
Accretion expense | (234 | ) | (263 | ) | (2,402 | ) | ||||||
Operating loss | (1,971 | ) | (7,770 | ) | (95,861 | ) | ||||||
Other income (expense): | ||||||||||||
Other income (expense) | (168 | ) | 21 | 222 | ||||||||
Interest income, net of amount capitalized | 140 | — | 205 | |||||||||
(28 | ) | 21 | 427 | |||||||||
Loss before income taxes | (1,999 | ) | (7,749 | ) | (95,434 | ) | ||||||
Provision for income taxes | (199 | ) | — | (199 | ) | |||||||
Net loss | $ | (2,198 | ) | $ | (7,749 | ) | $ | (95,633 | ) | |||
Weighted average shares outstanding | ||||||||||||
(Common shares)(1) | ||||||||||||
Basic | 82,253,700 | 48,155,533 | 51,296,217 | |||||||||
Diluted | 82,253,700 | 48,155,533 | 51,296,217 | |||||||||
Loss per share of common stock: | ||||||||||||
Basic | $ | (0.04 | ) | $ | (0.16 | ) | $ | (1.86 | ) | |||
Diluted | $ | (0.04 | ) | $ | (0.16 | ) | $ | (1.86 | ) | |||
(1) | Weighted average shares outstanding include the retroactive treatment of exchange ratios for conversion of Class A common stock and Class B common stock to common stock in conjunction with the initial public offering. |
F-25
(A Company in the Development Stage)
Condensed Consolidated Statement of Stockholders’ Equity (Unaudited)
Deficit | ||||||||||||||||||||||||||||
Series A | Accumulated | |||||||||||||||||||||||||||
Mandatory | Additional | During the | Total | |||||||||||||||||||||||||
Common Stock | Convertible Preferred Stock | Paid-In | Development | Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Stage | Equity | ||||||||||||||||||||||
(In thousands, except share and per share amounts) | ||||||||||||||||||||||||||||
Balance at December 31, 2010 | 82,291,200 | $ | 82 | — | $ | — | $ | 539,866 | $ | (93,435 | ) | $ | 446,513 | |||||||||||||||
Sale of Series A mandatory convertible preferred stock at $100.00 per share, net of underwriting fees and other offering costs | — | — | 2,070,000 | 2 | 199,640 | — | 199,642 | |||||||||||||||||||||
Stock-based compensation expense | 9,410 | — | — | — | 2,934 | — | 2,934 | |||||||||||||||||||||
Net loss | — | — | — | — | — | (2,198 | ) | (2,198 | ) | |||||||||||||||||||
Balance at March 31, 2011 | 82,300,610 | $ | 82 | 2,070,000 | $ | 2 | $ | 742,440 | $ | (95,633 | ) | $ | 646,891 | |||||||||||||||
F-26
(A Company in the Development Stage)
Condensed Consolidated Statements of Cash Flows (Unaudited)
Total from | ||||||||||||
Period Ended | June 12, 2008 | |||||||||||
March 31, | (Inception) through | |||||||||||
2011 | 2010 | March 31, 2011 | ||||||||||
(In thousands) | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net loss | $ | (2,198 | ) | $ | (7,749 | ) | $ | (95,633 | ) | |||
Adjustments to reconcile net loss to net cash provided by/ (used in) operating activities: | ||||||||||||
Depreciation and amortization | 2,100 | 1,004 | 12,947 | |||||||||
Accretion of asset retirement obligation | 234 | 263 | 2,402 | |||||||||
Non-cash inventory write-downs | 630 | 574 | 22,647 | |||||||||
Non-cash share-based compensation expense | 2,934 | — | 32,064 | |||||||||
Impairment of fixed assets | — | — | 3,114 | |||||||||
(Gain) loss on sale of assets and settlement of ARO | — | 13 | (57 | ) | ||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | (1,160 | ) | (202 | ) | (18,132 | ) | ||||||
Inventory | (1,175 | ) | (32 | ) | (25,044 | ) | ||||||
Prepaid expenses and other | (874 | ) | (733 | ) | (1,897 | ) | ||||||
Accounts payable | 2,803 | 2,086 | 6,988 | |||||||||
Asset retirement obligation | (165 | ) | — | (1,184 | ) | |||||||
Accrued expenses | 2,074 | (2,170 | ) | 8,560 | ||||||||
Net cash provided by/ (used in) operating activities | 5,203 | (6,946 | ) | (53,225 | ) | |||||||
Cash flows from investing activities: | ||||||||||||
Acquisition of the Mountain Pass facility | — | — | (82,150 | ) | ||||||||
Proceeds from sale of investment in joint venture | — | — | 9,700 | |||||||||
Deposits | (1,500 | ) | — | (27,700 | ) | |||||||
Capital expenditures | (26,345 | ) | (2,840 | ) | (67,080 | ) | ||||||
Other assets | — | — | (111 | ) | ||||||||
Proceeds from sale of assets | — | 9 | 14 | |||||||||
Net cash used in investing activities | (27,845 | ) | (2,831 | ) | (167,327 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Capital contributions from original stockholders | — | 10,000 | 125,004 | |||||||||
Repayments of short-term borrowings — related party | (935 | ) | — | (2,042 | ) | |||||||
Net proceeds from sale of common stock in conjunction with the initial public offering | — | — | 378,633 | |||||||||
Net proceeds from sale of preferred stock | 199,642 | — | 199,642 | |||||||||
Payment of deferred financing costs | — | — | (185 | ) | ||||||||
Proceeds from exercise of options | — | 300 | 350 | |||||||||
Proceeds from short-term borrowings — related party | — | — | 11,645 | |||||||||
Net cash provided by financing activities | 198,707 | 10,300 | 713,047 | |||||||||
Net change in cash and cash equivalents | 176,065 | 523 | 492,495 | |||||||||
Cash and cash equivalents at beginning of the period | 316,430 | 6,929 | — | |||||||||
Cash and cash equivalents at end of period | $ | 492,495 | $ | 7,452 | $ | 492,495 | ||||||
Supplemental disclosure of non-cash activities: | ||||||||||||
Change in accrued capital expenditures | $ | 14,896 | $ | 492 | ||||||||
F-27
(A Company in the Development Stage)
Notes to Condensed Consolidated Financial Statements
March 31, 2011
(Unaudited)
(1) | Company Background |
• | Clean-energy technologies such as hybrid and electric vehicles, wind turbines and compact florescent lighting; | |
• | High-technology applications including cell phones, personal digital assistant devices, digital music players, hard disk drives used in computers, computing devices, “ear bud” speakers and microphones, as well as fiber optics, lasers and optical temperature sensors; | |
• | Critical defense applications such as guidance and control systems, communications, global positioning systems, radar and sonar; and | |
• | Advanced water treatment applications including those for industrial, military, homeland security, domestic and foreign aid use. |
F-28
(A Company in the Development Stage)
Notes to Condensed Consolidated Financial Statements — (Continued)
(2) | Basis of Presentation |
(3) | Capital Requirements |
F-29
(A Company in the Development Stage)
Notes to Condensed Consolidated Financial Statements — (Continued)
(4) | Summary of Significant Accounting Policies |
(a) | Use of Estimates |
(b) | Revenue and Cost of Goods Sold |
(c) | Cash and Cash Equivalents |
F-30
(A Company in the Development Stage)
Notes to Condensed Consolidated Financial Statements — (Continued)
(d) | Trade Accounts Receivable |
(e) | Inventories |
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
Current: | ||||||||
Concentrate stockpiles | $ | 5,252 | $ | 4,206 | ||||
Work in process | 5,041 | 3,582 | ||||||
Finished goods | 9,096 | 9,307 | ||||||
Materials and supplies | 1,996 | 1,727 | ||||||
Total current | $ | 21,385 | $ | 18,822 | ||||
Long-term: | ||||||||
Concentrate stockpiles | $ | 3,126 | $ | 5,108 | ||||
Finished goods | 68 | 104 | ||||||
Total long-term | $ | 3,194 | $ | 5,212 | ||||
F-31
(A Company in the Development Stage)
Notes to Condensed Consolidated Financial Statements — (Continued)
(f) | Deposits |
(g) | Property, Plant and Equipment, net |
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
Land | $ | 800 | $ | 800 | ||||
Land improvements (15 years) | 15,748 | 15,415 | ||||||
Buildings and improvements (4 to 27 years) | 7,241 | 6,892 | ||||||
Plant and equipment (2 to 12 years) | 21,338 | 19,560 | ||||||
Vehicles (7 years) | 1,127 | 1,049 | ||||||
Computer software (5 years) | 1,871 | 1,563 | ||||||
Furniture and fixtures (3 years) | 193 | 170 | ||||||
Construction in progress | 73,810 | 34,809 | ||||||
Mineral properties | 23,968 | 23,968 | ||||||
Property, plant and equipment at cost | 146,096 | 104,226 | ||||||
Less accumulated depreciation | (12,344 | ) | (10,260 | ) | ||||
Property, plant and equipment, net | $ | 133,752 | $ | 93,966 | ||||
F-32
(A Company in the Development Stage)
Notes to Condensed Consolidated Financial Statements — (Continued)
(h) | Mineral Properties and Development Costs |
(i) | Intangible Asset |
(j) | Accrued Expenses |
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
Defined contribution plan | $ | 1,433 | $ | 1,199 | ||||
Accrued tolling fees | 1,580 | 404 | ||||||
Other accrued expenses | 3,395 | 2,622 | ||||||
Total accrued expenses | $ | 6,408 | $ | 4,225 | ||||
(k) | Asset Retirement Obligation |
F-33
(A Company in the Development Stage)
Notes to Condensed Consolidated Financial Statements — (Continued)
Three Months | ||||
Ended | ||||
March 31, 2011 | ||||
Balance at beginning of period | $ | 12,471 | ||
Obligations settled | (165 | ) | ||
Accretion expense | 234 | |||
Revisions in estimated cash flows | 628 | |||
Balance at end of period | $ | 13,168 | ||
(l) | Income Taxes |
(m) | Stockholders’ Equity |
F-34
(A Company in the Development Stage)
Notes to Condensed Consolidated Financial Statements — (Continued)
(n) | Earnings (loss) per Share |
Three Months Ended | ||||
March 31, 2011 | ||||
(In thousands, except share and | ||||
per share amounts) | ||||
Net loss | $ | (2,198 | ) | |
Cumulative undeclared dividends on preferred stock | (1,245 | ) | ||
Loss attributed to common stockholders — basic | (3,443 | ) | ||
Weighted average common shares outstanding | 82,253,700 | |||
Basic loss per share | $ | (0.04 | ) | |
(o) | Comprehensive Income (Loss) |
F-35
(A Company in the Development Stage)
Notes to Condensed Consolidated Financial Statements — (Continued)
(5) | Commitments and Contingencies |
(a) | Future Operating Lease Commitments |
(b) | Labor Contract |
(c) | Reclamation Surety Bonds |
(d) | Licenses and Permits |
(6) | Stock-Based Compensation |
F-36
(A Company in the Development Stage)
Notes to Condensed Consolidated Financial Statements — (Continued)
(7) | Concentrations |
(a) | Limited Number of Products |
Three Months | Three Months | |||||||
Ended | Ended | |||||||
March 31, 2011 | March 31, 2010 | |||||||
Lanthanum products | $ | 11,466 | $ | 2,751 | ||||
Ceric Hydrate | $ | 7,868 | — | |||||
Didymium products | $ | 4,693 | $ | 105 | ||||
Cerium products | $ | 1,185 | $ | 14 | ||||
Other | $ | 1,049 | $ | 148 |
F-37
(A Company in the Development Stage)
Notes to Condensed Consolidated Financial Statements — (Continued)
(b) | Limited Number of Customers |
Three Months | Three Months | |||||||
Ended | Ended | |||||||
March 31, 2011 | March 31, 2010 | |||||||
Mitsubishi Unimetals USA | $ | 7,767 | — | |||||
W.R. Grace & Co. — Conn. | $ | 6,196 | $ | 2,308 | ||||
Hitachi Metals, Ltd. | $ | 5,785 | — | |||||
Toyota Tsusho Corporation | $ | 2,600 | — | |||||
Treibacher Industrie AG | $ | 1,184 | — |
(c) | Single Geographic Location |
(8) | Related-Party Transactions |
F-38
(A Company in the Development Stage)
Notes to Condensed Consolidated Financial Statements — (Continued)
(9) | Subsequent Events |
(a) | Acquisitions |
(b) | Declared Dividend |
(10) | Revision of Financial Statements for March 31, 2011 |
F-39
(A Company in the Development Stage)
Notes to Condensed Consolidated Financial Statements — (Continued)
Three Months Ended and as of | ||||||||||||
March 31, 2011 | ||||||||||||
As | ||||||||||||
Previously | ||||||||||||
Reported | Revision | As Revised | ||||||||||
(In thousands, except per share amounts) | ||||||||||||
Cost of goods sold | $ | (15,388 | ) | $ | (1,289 | ) | $ | (16,677 | ) | |||
Loss before income taxes | (710 | ) | (1,289 | ) | (1,999 | ) | ||||||
Net loss | (909 | ) | (1,289 | ) | (2,198 | ) | ||||||
Loss per basic/diluted common share | (0.03 | ) | (0.01 | ) | (0.04 | ) | ||||||
Current inventory | 24,363 | (2,978 | ) | 21,385 | ||||||||
Current assets | 537,072 | (2,978 | ) | 534,094 | ||||||||
Total assets | 702,451 | (2,978 | ) | 699,473 | ||||||||
Total stockholders’ equity | 649,869 | (2,978 | ) | 646,891 |
Total from June 12, 2008 | ||||||||||||
(Inception) through | ||||||||||||
March 31, 2011 | ||||||||||||
As | ||||||||||||
Previously | ||||||||||||
Reported | Revision | As Revised | ||||||||||
(In thousands, except per share amounts) | ||||||||||||
Cost of goods sold | $ | (86,102 | ) | $ | (2,978 | ) | $ | (89,080 | ) | |||
Loss before income taxes | (92,456 | ) | (2,978 | ) | (95,434 | ) | ||||||
Net loss | (92,655 | ) | (2,978 | ) | (95,633 | ) | ||||||
Loss per basic/diluted common share | (1.81 | ) | (0.05 | ) | (1.86 | ) |
F-40
J.P. Morgan
Item 13. | Other Expenses of Issuance and Distribution. |
Amount | ||||
SEC Registration Fee | $ | 76,878 | ||
FINRA Filing Fee | 66,717 | |||
Accounting Fees and Expenses | 82,500 | |||
Legal Fees and Expenses | 150,000 | |||
Printing and Engraving Expenses | 150,000 | |||
Blue Sky Fees and Expenses | 35,000 | |||
Transfer Agent and Registrar Fees and Expenses | 10,400 | |||
Miscellaneous Expenses | 37,500 | |||
Total | $ | 608,995 |
Item 14. | Indemnification of Officers and Directors. |
II-1
Item 15. | Recent Sales of Unregistered Securities. |
II-2
Item 16. | Exhibits and Financial Statement Schedules. |
1 | .1 | Form of Underwriting Agreement. | ||
2 | .1 | Stock Purchase Agreement, dated April 1, 2011, by and among Molycorp, Inc., Molycorp Minerals, LLC and Aktsiaselts Silmet Grupp (incorporated by reference to Exhibit 2.1 of Molycorp Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on April 7, 2011). | ||
2 | .2 | Stock Purchase Agreement, dated April 1, 2011, by and between Molycorp Minerals, LLC and Treibacher Industrie AG (incorporated by reference to Exhibit 2.1 of Molycorp Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on April 7, 2011). | ||
3 | .1 | Amended and Restated Certificate of Incorporation of Molycorp, Inc. (incorporated by reference to Exhibit 3.1 to Molycorp, Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on August 6, 2010). | ||
3 | .2 | Bylaws of Molycorp, Inc. (incorporated by reference to Exhibit 3.2 to Molycorp, Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on August 6, 2010). | ||
3 | .3 | Form of Certificate of Designations of Series A Mandatory Convertible Preferred Stock of Molycorp, Inc. (including Form of Certificate of Molycorp, Inc. Series A Mandatory Convertible Preferred Stock) (incorporated by reference to Exhibit 4.1 to Molycorp, Inc.’s Registration Statement onForm S-1 (FileNo. 333-171827) filed with the Securities and Exchange Commission on February 7, 2011). | ||
4 | .1 | Form of Certificate of Molycorp, Inc. Common Stock (incorporated by reference to Exhibit 4.1 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on July 13, 2010). | ||
5 | .1* | Opinion of Jones Day. | ||
10 | .1 | Sales/Buy-Back Agreement, dated May 15, 2009, between Molycorp Minerals, LLC and Traxys North America LLC (incorporated by reference to Exhibit 10.1 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). | ||
10 | .2 | Letter Agreement, dated April 16, 2010, between Molycorp Minerals, LLC and Traxys North America, LLC (incorporated by reference to Exhibit 10.2 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on May 25, 2010). | ||
10 | .3 | Contribution Agreement, dated April 15, 2010, by and among Molycorp, Inc., Molycorp, LLC, Molycorp Minerals, LLC and the parties listed therein (incorporated by reference to Exhibit 10.4 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on May 25, 2010). |
II-3
10 | .4 | Stockholders Agreement, dated April 15, 2010, by and among Molycorp, Inc. and the parties listed therein (incorporated by reference to Exhibit 10.5 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on May 25, 2010). | ||
10 | .5 | Registration Rights Agreement, dated April 15, 2010, by and among Molycorp, Inc. and the parties listed therein (incorporated by reference to Exhibit 10.6 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on May 25, 2010). | ||
10 | .6 | Form of Restricted Stock Agreement (incorporated by reference to Exhibit 10.7 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on May 25, 2010). | ||
10 | .7 | Molycorp, Inc. Amended and Restated Management Incentive Compensation Plan, effective as of December 20, 2010 (incorporated by reference to Exhibit 10.1 to Molycorp, Inc.’s Current Report onForm 8-K (RegistrationNo. 001-34827) filed with the Securities and Exchange Commission on December 21, 2010). | ||
10 | .8 | Termination and Mutual Release Agreement, dated June 16, 2010, between Molycorp Minerals, LLC and Traxys North America, LLC (incorporated by reference to Exhibit 10.9 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). | ||
10 | .9 | Sales/Buy-Back Agreement, dated June 1, 2010, between Molycorp Minerals, LLC and Traxys North America, LLC (incorporated by reference to Exhibit 10.10 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). | ||
10 | .10 | Purchase Agreement, dated as of December 15, 2010, between Molycorp Minerals, LLC and Quinn Process Equipment Co. (incorporated by reference to Exhibit 10.22 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-171827) filed with the Securities and Exchange Commission on January 24, 2011). | ||
10 | .11 | Executive Employment Agreement, dated May 21, 2010, between Molycorp, Inc. and Mark A. Smith (incorporated by reference to Exhibit 10.11 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). | ||
10 | .12 | Executive Employment Agreement, dated May 21, 2010, between Molycorp, Inc. and James S. Allen (incorporated by reference to Exhibit 10.12 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). | ||
10 | .13 | Executive Employment Agreement, dated May 21, 2010, between Molycorp, Inc. and John F. Ashburn, Jr. (incorporated by reference to Exhibit 10.13 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). | ||
10 | .14 | Executive Employment Agreement, dated May 21, 2010, between Molycorp, Inc. and John L. Burba (incorporated by reference to Exhibit 10.14 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). | ||
10 | .15 | Molycorp, Inc. 2010 Equity and Performance Incentive Plan (incorporated by reference to Exhibit 10.15 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). | ||
10 | .16 | Letter Agreement, dated April 15, 2010, among Resource Capital Fund IV, L.P., Resource Capital Fund V, L.P., PP IV Mountain Pass II, LLC, PP IV MP AIV 1, LLC, PP IV MP AIV 2, LLC, PP IV MP AIV 3, LLC, TNA Moly Group, LLC, MP Rare Company, LLC and KMSmith, LLC (incorporated by reference to Exhibit 10.16 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). | ||
10 | .17 | Summary of Collateral Arrangement for Surety Bonds (incorporated by reference to Exhibit 10.17 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on July 13, 2010). | ||
10 | .18 | Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.18 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on July 13, 2010). |
II-4
10 | .19 | Form of Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.1 to Molycorp, Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on November 8, 2010). | ||
10 | .20 | Form of Restricted Stock Agreement (incorporated by reference to Exhibit 10.2 to Molycorp, Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on November 8, 2010). | ||
10 | .21 | Form of Restricted Stock Units Agreement (incorporated by reference to Exhibit 10.3 to Molycorp, Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on November 8, 2010). | ||
10 | .22 | Executive Employment Agreement, dated November 1, 2010, between Molycorp, Inc. and Douglas J. Jackson (incorporated by reference to Exhibit 10.22 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-171827) filed with the Securities and Exchange Commission on January 24, 2011). | ||
10 | .23 | Molycorp, Inc. Nonemployee Director Deferred Compensation Plan (incorporated by reference to Exhibit 10.23 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-171827) filed with the Securities and Exchange Commission on January 24, 2011). | ||
10 | .24 | Molycorp, Inc. Amended and Restated Management Incentive Plan (incorporated by reference to Exhibit 10.1 to Molycorp, Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on December 21, 2010). | ||
10 | .25 | Summary of Molycorp, Inc. 2011 Annual Incentive Plan (incorporated by reference to Exhibit 10.1 to Molycorp, Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on January 19, 2011). | ||
10 | .26 | Executive Employment Agreement, dated January 24, 2011, between Molycorp, Inc. and John K. Bassett (incorporated by reference to Exhibit 10.26 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-171827) filed with the Securities and Exchange Commission on February 7, 2011). | ||
10 | .27 | Change Order to Purchase Agreement, dated as of February 28, 2011, between Molycorp Minerals, LLC and Quinn Process Equipment Co. (incorporated by reference to Exhibit 10.27 of Molycorp Inc.’s Annual Report onForm 10-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on March 9, 2011). | ||
21 | .1* | List of Subsidiaries. | ||
23 | .1 | Consent of PricewaterhouseCoopers LLP. | ||
23 | .2* | Consent of Jones Day (included in Exhibit 5.1). | ||
23 | .3 | Consent of SRK Consulting (U.S.), Inc. | ||
23 | .4 | Consent of Industrial Minerals Company of Australia Pty Ltd. | ||
24 | .1* | Power of Attorney. |
* | Previously filed. |
Item 17. | Undertakings. |
II-5
II-6
By: | /s/ Mark A. Smith |
Signature | Title | Date | ||||
/s/ Mark A. Smith Mark A. Smith | President and Chief Executive Officer and Director (Principal Executive Officer) | June 7, 2011 | ||||
* James S. Allen | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | June 7, 2011 | ||||
* Russell D. Ball | Director | June 7, 2011 | ||||
* Ross R. Bhappu | Director | June 7, 2011 | ||||
* Brian T. Dolan | Director | June 7, 2011 | ||||
* Charles R. Henry | Director | June 7, 2011 | ||||
* Mark S. Kristoff | Director | June 7, 2011 | ||||
* Alec Machiels | Director | June 7, 2011 | ||||
* Jack E. Thompson | Director | June 7, 2011 |
* | The undersigned by signing his name hereto does sign and execute this registration statement onForm S-1 pursuant to the Power of Attorney executed by the above-named directors and officers of the registrant, which is being filed herewith on behalf of such directors and officers. |
By | /s/ Mark A. Smith |
II-7
1 | .1 | Form of Underwriting Agreement. | ||
2 | .1 | Stock Purchase Agreement, dated April 1, 2011, by and among Molycorp, Inc., Molycorp Minerals, LLC and Aktsiaselts Silmet Grupp (incorporated by reference to Exhibit 2.1 of Molycorp Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on April 7, 2011). | ||
2 | .2 | Stock Purchase Agreement, dated April 1, 2011, by and between Molycorp Minerals, LLC and Treibacher Industrie AG (incorporated by reference to Exhibit 2.1 of Molycorp Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on April 7, 2011). | ||
3 | .1 | Amended and Restated Certificate of Incorporation of Molycorp, Inc. (incorporated by reference to Exhibit 3.1 to Molycorp, Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on August 6, 2010). | ||
3 | .2 | Bylaws of Molycorp, Inc. (incorporated by reference to Exhibit 3.2 to Molycorp, Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on August 6, 2010). | ||
3 | .3 | Form of Certificate of Designations of Series A Mandatory Convertible Preferred Stock of Molycorp, Inc. (including Form of Certificate of Molycorp, Inc. Series A Mandatory Convertible Preferred Stock) (incorporated by reference to Exhibit 4.1 to Molycorp, Inc.’s Registration Statement onForm S-1(File No. 333-171827) filed with the Securities and Exchange Commission on February 7, 2011). | ||
4 | .1 | Form of Certificate of Molycorp, Inc. Common Stock (incorporated by reference to Exhibit 4.1 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on July 13, 2010). | ||
5 | .1* | Opinion of Jones Day. | ||
10 | .1 | Sales/Buy-Back Agreement, dated May 15, 2009, between Molycorp Minerals, LLC and Traxys North America LLC (incorporated by reference to Exhibit 10.1 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). | ||
10 | .2 | Letter Agreement, dated April 16, 2010, between Molycorp Minerals, LLC and Traxys North America, LLC (incorporated by reference to Exhibit 10.2 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on May 25, 2010). | ||
10 | .3 | Contribution Agreement, dated April 15, 2010, by and among Molycorp, Inc., Molycorp, LLC, Molycorp Minerals, LLC and the parties listed therein (incorporated by reference to Exhibit 10.4 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on May 25, 2010). | ||
10 | .4 | Stockholders Agreement, dated April 15, 2010, by and among Molycorp, Inc. and the parties listed therein (incorporated by reference to Exhibit 10.5 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on May 25, 2010). | ||
10 | .5 | Registration Rights Agreement, dated April 15, 2010, by and among Molycorp, Inc. and the parties listed therein (incorporated by reference to Exhibit 10.6 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on May 25, 2010). | ||
10 | .6 | Form of Restricted Stock Agreement (incorporated by reference to Exhibit 10.7 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on May 25, 2010). | ||
10 | .7 | Molycorp, Inc. Amended and Restated Management Incentive Compensation Plan, effective as of December 20, 2010. (incorporated by reference to Exhibit 10.1 to Molycorp, Inc.’s Current Report onForm 8-K (RegistrationNo. 001-34827) filed with the Securities and Exchange Commission on December 21, 2010). | ||
10 | .8 | Termination and Mutual Release Agreement, dated June 16, 2010, between Molycorp Minerals, LLC and Traxys North America, LLC (incorporated by reference to Exhibit 10.9 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). |
10 | .9 | Sales/Buy-Back Agreement, dated June 1, 2010, between Molycorp Minerals, LLC and Traxys North America, LLC (incorporated by reference to Exhibit 10.10 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). | ||
10 | .10 | Purchase Agreement, dated as of December 15, 2010, between Molycorp Minerals, LLC and Quinn Process Equipment Co. (incorporated by reference to Exhibit 10.22 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-171827) filed with the Securities and Exchange Commission on January 24, 2011). | ||
10 | .11 | Executive Employment Agreement, dated May 21, 2010, between Molycorp, Inc. and Mark A. Smith (incorporated by reference to Exhibit 10.11 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). | ||
10 | .12 | Executive Employment Agreement, dated May 21, 2010, between Molycorp, Inc. and James S. Allen (incorporated by reference to Exhibit 10.12 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). | ||
10 | .13 | Executive Employment Agreement, dated May 21, 2010, between Molycorp, Inc. and John F. Ashburn, Jr. (incorporated by reference to Exhibit 10.13 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). | ||
10 | .14 | Executive Employment Agreement, dated May 21, 2010, between Molycorp, Inc. and John L. Burba (incorporated by reference to Exhibit 10.14 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). | ||
10 | .15 | Molycorp, Inc. 2010 Equity and Performance Incentive Plan (incorporated by reference to Exhibit 10.15 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). | ||
10 | .16 | Letter Agreement, dated April 15, 2010, among Resource Capital Fund IV, L.P., Resource Capital Fund V, L.P., PP IV Mountain Pass II, LLC, PP IV MP AIV 1, LLC, PP IV MP AIV 2, LLC, PP IV MP AIV 3, LLC, TNA Moly Group, LLC, MP Rare Company, LLC and KMSmith, LLC (incorporated by reference to Exhibit 10.16 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on June 21, 2010). | ||
10 | .17 | Summary of Collateral Arrangement for Surety Bonds (incorporated by reference to Exhibit 10.17 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on July 13, 2010). | ||
10 | .18 | Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.18 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-166129) filed with the Securities and Exchange Commission on July 13, 2010). | ||
10 | .19 | Form of Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.1 to Molycorp, Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on November 8, 2010). | ||
10 | .20 | Form of Restricted Stock Agreement (incorporated by reference to Exhibit 10.2 to Molycorp, Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on November 8, 2010). | ||
10 | .21 | Form of Restricted Stock Units Agreement (incorporated by reference to Exhibit 10.3 to Molycorp, Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on November 8, 2010). | ||
10 | .22 | Executive Employment Agreement, dated November 1, 2010, between Molycorp, Inc. and Douglas J. Jackson (incorporated by reference to Exhibit 10.22 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-171827) filed with the Securities and Exchange Commission on January 24, 2011). | ||
10 | .23 | Molycorp, Inc. Nonemployee Director Deferred Compensation Plan (incorporated by reference to Exhibit 10.23 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-171827) filed with the Securities and Exchange Commission on January 24, 2011). | ||
10 | .24 | Molycorp, Inc. Amended and Restated Management Incentive Plan (incorporated by reference to Exhibit 10.1 to Molycorp, Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on December 21, 2010). |
10 | .25 | Summary of Molycorp, Inc. 2011 Annual Incentive Plan (incorporated by reference to Exhibit 10.1 to Molycorp, Inc.’s Current Report onForm 8-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on January 19, 2011). | ||
10 | .26 | Executive Employment Agreement, dated January 24, 2011, between Molycorp, Inc. and John K. Bassett (incorporated by reference to Exhibit 10.26 to Molycorp, Inc.’s Registration Statement onForm S-1 (RegistrationNo. 333-171827) filed with the Securities and Exchange Commission on February 7, 2011). | ||
10 | .27 | Change Order to Purchase Agreement, dated as of February 28, 2011, between Molycorp Minerals, LLC and Quinn Process Equipment Co. (incorporated by reference to Exhibit 10.27 of Molycorp Inc.’s Annual Report onForm 10-K (FileNo. 001-34827) filed with the Securities and Exchange Commission on March 9, 2011). | ||
21 | .1* | List of Subsidiaries. | ||
23 | .1 | Consent of PricewaterhouseCoopers LLP. | ||
23 | .2* | Consent of Jones Day (included in Exhibit 5.1). | ||
23 | .3 | Consent of SRK Consulting (U.S.), Inc. | ||
23 | .4 | Consent of Industrial Minerals Company of Australia Pty Ltd. | ||
24 | .1* | Power of Attorney. |
* | Previously filed. |