America's largest rare earth shortage of funds the company intends to offer $ 200 million of equity financing

Beijing on October 15 evening news , the largest U.S. rare earth miner Molycorp Inc (MCP) on Tuesday announced that due to shortage of cash worth $ 200 million program offering stock to raise capital to maintain operations.

Affected by this news , the company's stock price fell nearly 17 percent in early trading Tuesday .

The company said in January this year was through the sale of $ 414 million equity financing to maintain operations, but now these funds will be exhausted soon . As of the end of September , the company's balance sheet and about $ 160 million in cash.

The company with the U.S. Securities and Exchange Commission (SEC) to submit a file that as California Mountain Pass (Mountain Pass) rare earth mine production plan within the time failed to reach the expected level , leading to its rare earth production was lower than expected , which for the first three quarters of this year 's revenue and cash flow caused damage . This rare earth mine current production is only expected in January about 55% . In addition, the company estimates the Mountain Pass mine produced about 49% cerium , which is a low demand for rare earth materials than other products .

Molycorp said that , in addition to declining sales , the global economic slowdown led to tension in the market , price volatility , as well as from illegal mining and the Chinese rare earth enterprises competition and other factors, also caused damage to its cash flow .

The company said it will continue to seek financing from lenders but not yet obtained any firm commitment , is currently assumed that the case can not get a loan operations.

In addition to projects in the public offering , the company also with the rare earth mining companies in Chile Molymet reached a deal to the latter project worth $ 50 million private placement offering of common shares. But if the public offer to be successful, the company expects to need to perform the agreement.

In addition to $ 200 million public offering of stock , the company also granted the underwriters of the offering oversubscribed up to $ 30 million of stock options .

Last week , Molycorp announced the appointment of Chief Operating Officer Geoff Bedford as a new CEO, who will take over from caretaker since last December this position Constantine Karayannopoulos. Bedford 's appointment will take effect on December 2 , Karayannopoulos during the transitional period will continue to serve as interim president and CEO.


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