Molycorp Minerals LLC acquires rare earth operations from Chevron Mining; restart plan announced

Molycorp Minerals LLC (“Molycorp”) recently announced that it has closed the transaction on the previously announced purchase of the Mountain Pass rare earth mining operations from Chevron Mining Inc. The transaction closed on September 30, 2008.

Molycorp is a special purpose company owned by Resource Capital Fund IV L.P., Pegasus Partners IV, LP, The Goldman Sachs Group, Inc., Traxys North America LLC, Carint Group LLC and Mark Smith.

Rare earth minerals are used in a wide variety of applications including catalysts for the oil refining industry, neodymium-iron-boron (“NdFeB”) magnets which are used in high energy electric motors like those used in hybrid vehicles, and new high energy battery applications. Mountain Pass is the only significant developed commercial rare earths resource in the western world with enough resources to provide significant levels of global supply for 30 to 50 years. Located about 50 miles south of Las Vegas, Nevada, the operation has produced and sold rare earth products continuously since 1951. In 2007, Chevron Mining Inc. commenced rare earth separations operations using lanthanum concentrates from existing stockpiles to produce didymium (a combination of neodymium and praseodymium, or “Nd/Pr”) and lanthanum products.

The primary physical assets at Mountain Pass include the mine and ore resources, a flotation mill and a specialty plant which refines the milled concentrate. Mountain Pass also has large stockpiles of bastnasite concentrates located on the property. The Mountain Pass operations have an experienced and highly skilled work force, including on site operations personnel and a rare earth research and development team.

As most rare earth consumers know, more than 97% of the world’s rare earths are produced in China thus placing significant supply risk on firms operating outside of China. Molycorp Minerals’ goal is to transform the Mountain Pass facility into a world class operation that is globally cost competitive, environmentally sound, and produces a full suite of high quality rare earth products. We have received all critical permits including renewal of the 30 year mine operating plan. The ore body is among the worlds finest with grades ranging from 5% to over 20% REO. The bastnasite mineral contained in our ore is easily concentrated and the surrounding infrastructure as well as its location next to a major interstate highway affords Mt. Pass compelling advantages.

Mining was suspended at the end of 2002 but Molycorp Minerals will achieve its goal via a multi phase restart project. Phase 1 commenced at the end of 2007 (as referenced above) with the separation of Nd/Pr from stockpiles of lanthanum rich material on site.

Phase 2 will begin approximately September 2009 and will involve the processing and separation of rare earths from vast stockpiles of bastnasite concentrate on site. Cerium, lanthanum, Nd/Pr, and europium may be produced at this time.

Phase 3 will involve the full restart of mining operations at Mt. Pass and is targeted to commence in late 2010 with processing of the newly mined ore to begin in 2011. New processing technologies and waste stream management practices will be employed allowing us to be a globally competitive, fully integrated rare earth producer wholly capable of meeting the supply requirements of rare earth consumers around the world. In many cases we’ll be helping customers meet their supply diversification goals and providing value for our customers’ customers by mitigating supply risk of these strategic elements.

We’ve also leveraged our rare earth chemistry expertise, in conjunction with industry partners, to develop promising new “green” technologies and applications.

Product is available for sale now and we’re currently talking to potential customers for future production. If you have a need for rare earth materials please call my direct dial number or toll free at 888-577-7790 now to learn how we may help you meet your current and future requirements.

The addresses for Mountain Pass and the company’s new Denver area headquarters are:

Molycorp Minerals LLC
67750 Bailey Road
HC 1 Box 224
Mountain Pass, CA 92366

Molycorp Minerals LLC
5619 DTC Parkway
Suite 1000
Greenwood Village, CO 80111