Molycorp quarterly results delayed; fixed assets could be impaired

By Caroline Salls

Pittsburgh, Aug. 10 – Molycorp, Inc.’s 10-Q filing for the quarter ended June 30 will be delayed because of the reporting requirements associated with the bankruptcy proceedings and the complexity of the calculations required to measure the impairment of the company’s fixed assets, according to a 12b-25 filed Monday with the Securities and Exchange Commission.

Molycorp said its management believes that a large portion of the company’s fixed assets may be significantly impaired as a result of a reduction in the actual and anticipated performance of its Mountain Pass operations, particularly in anticipation of the implementation of a limited operations plan (LOP).

According to the filing, Molycorp’s debtor-in-possession credit agreement requires it to satisfy milestones, including the preparation by Aug. 20 of a plan to operate its mining facility at Mountain Pass, Calif., on a limited basis.

The DIP credit agreement also requires the Molycorp debtors to begin implementing the LOP no later than Sept. 1 and to complete the implementation of the LOP by Oct. 20.

Only after the finalization and adoption of the LOP will the company be in a position to assess the value and any related impairment of the Mountain Pass asset, the company said.

Molycorp said it intends to file the 10-Q no later than the fifth calendar day following the prescribed due date.

The company said its preliminary estimates for the three months and six months ended June 30 include revenue of $114 million and $220 million, respectively. Molycorp said revenue declined in the second quarter about 3% from the same period of last year, largely as a result of continued softening of rare earth prices.

Net revenues during the six months ended June 30 were roughly 6% lower when compared to the six months ended June 30, 2014.

Molycorp said it expects to report a net loss of $256 million and $358 million for the three months and six months ended June 30, respectively, as compared to a net loss of $84 million and $170 million reported for the same periods of 2014.

The company said the estimated increase in the net loss for the second quarter and first half of 2015 includes $184 million of higher operating losses and reorganization expenses stemming from Molycorp’s Chapter 11 cases.

Molycorp is a Greenwood Village, Colo., producer of materials from rare earth minerals that filed for bankruptcy on June 25 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 15-11357.

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