Molycorp, Inc. (NYSE:MCP – News), the Western hemisphere’s only producer of rare earth oxides, today announced that its Board of Directors has approved a Phase 2 expansion plan that is expected to double the production
capacity of its Mountain Pass facility in California. In addition, the Company has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (SEC) in connection with a proposed mandatory convertible preferred stock offering by the Company as well as an offering of common stock by certain stockholders.
We feel this announcement will mean a steady price appreciation short term. “This expansion represents an approximate doubling of the original Phase 1 production capacity at an estimated capital cost of approximately $250 million, in addition to the costs for the Phase 1 plan. The Company believes that it will realize substantial savings by committing to this expansion now while construction activities are underway for its Phase 1 initial modernization and expansion plan.”
MCP is currently trading up 5.5% to $45.32. MarketClub has a very interesting take on how this news will affect the stock price. For this FREE MCP stock information just simply click this link and add your e-mail address. The report will be in your in-box within minutes. We expect a nice volume spike at the close and shorts continue to cover and the news makes it rounds on the trading desks.
