MP Rare Earth Materials Reports Q1 2021 Results

MP Materials Corp., the largest rare earth material producer in the Western Hemisphere recently announced its First Quarter (Q1) results in 2021. The Company owns and operates the Mountain Pass Mine and Processing Facility, which is the only rare-earth mining and processing site of scale in the Western Hemisphere and produced nearly 15% of the rare-earth content consumed in the global market in 2020.

Separated rare earth elements (REEs) are critical inputs for the magnets that enable the mobility of EVs, drones, defense systems, wind turbines, and many other advanced technologies.

James H. Litinsky, the Chairman and CEO of the company said: "The first quarter results demonstrate our continued strong operational execution and business growth brought about by rising prices. MP's revenues nearly tripled, and adjusted EBITDA has increased by 6 times compared with the first quarter of last year, "said James H. Litinsky, Chairman and CEO of the company. "Importantly, our Stage II optimization plan is on the right track, and we are steadily moving forward with regard to the Stage III vision."

Revenue increased by 189% year-on-year, mainly due to the increase in the actual sales price of rare earth oxides (REO) in concentrates and the increase in metric tons (MT) of REO sold. The realized sales price rose by 132%, due to the increase in demand for REEs, which pushed up the market price. MT's sales volume increased by 18%, mainly due to the different timing of shipments and quarter-to-quarter fluctuations, but the production volume approached over time.

Compared with the first quarter of 2020, production increased by 2%. This was due to the moderate increase in the efficiency of our processing operations and the increase in ore feed rate, but was partially offset by the reduction in planned production time.

Due to the increase in sales volume and the increase in unit profitability, adjusted EBITDA increased by 537% year-on-year, partially offset by the increase in the cost of listed companies. The production cost per ton of REO was US$1,475, an increase of 13% over the same period last year. This was mainly due to the increase in raw material costs, mainly due to temporary reagent trials, COVID-19 affecting logistics costs, increased headcount, and scheduled maintenance schedule closure. Due to continued operational efficiency, unit production costs fell by 7% month-on-month.

Net income increased by 737% year-on-year to US$16.1 million, and adjusted net income increased by 801% year-on-year to US$23.2 million. This was mainly due to the increase in adjusted EBITDA, but was partially offset by the increase in income tax expenses.

Net income in the Q1 of 2021 is also affected by non-cash, stock-based compensation expenses related primarily to stock grants issued in connection with MP Rare Earth Materials becoming a public company and higher depletion of the mineral rights resulting from the acquisition of Secure Natural Resources LLC.

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