Investor PresentationJune 2012
Presenter: Mark Smith, P.E.,
President and CEO, Molycorp, Inc.
Safe Harbor Statements
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This presentation contains forward-looking statements that represent Molycorp’s beliefs, projections and predictions about future events or Molycorp’s future
performance, including those regarding the acquisition of Neo Materials. Forward-looking statements can be identified by terminology such as “may,” “will,” “would,”
“could,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” or the negative of these terms or other similar
expressions or phrases. These forward-looking statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors
that could cause Molycorp’s actual results, performance or achievements or industry results to differ materially from any future results, performance or achievement
described in or implied by such statements.
Factors that may cause actual results to differ materially from expected results described in forward-looking statements include, but are not limited to: Molycorp’s
ability to successfully integrate Neo into Molycorp’s operations; Molycorp’s ability to achieve fully the strategic and financial objectives related to the acquisition of Neo,
including the acquisition's impact on Molycorp’s financial condition and results of operations; unexpected costs or liabilities that may arise from the ownership or
operation of Neo; Molycorp’s ability to secure additional capital to implement its business plans; Molycorp’s ability to complete its initial modernization and expansion
efforts, including the accelerated start-up of the Mountain Pass facility, which management refers to as Project Phoenix Phase 1, and the second phase capacity
expansion plan, which management refers to as Project Phoenix Phase 2, and reach full planned production rates for REOs and other planned downstream products, in
each case within the projected time frame; the success of Molycorp’s cost mitigation efforts in connection with Project Phoenix, which, if unsuccessful, might cause its
costs to exceed budget; the final costs of Project Phoenix Phase 1, including the accelerated start-up of the Mountain Pass facility, and Project Phoenix Phase 2, which
may differ from estimated costs; uncertainties associated with Molycorp’s reserve estimates and non-reserve deposit information, including estimated mine life and
annual production; uncertainties regarding global supply and demand for rare earth materials; uncertainties regarding the results of Molycorp’s exploratory drilling
programs; Molycorp’s ability to enter into additional definitive agreements with its customers and Molycorp’s ability to maintain customer relationships; the ability of
Molycorp’s sintered neodymium iron boron rare earth magnet joint venture with Daido Steel Co., Ltd. and Mitsubishi Corporation to successfully manufacture magnets
within its expected timeframe; Molycorp’s ability to successfully integrate recently acquired businesses; Molycorp’s ability to maintain appropriate relations with unions
and employees; Molycorp’s ability to successfully implement its “mine-to-magnets” strategy; environmental laws, regulations and permits affecting Molycorp’s
business, directly and indirectly, including, among others, those relating to mine reclamation and restoration, climate change, emissions to the air and water and human
exposure to hazardous substances used, released or disposed of by Molycorp; uncertainties associated with unanticipated geological conditions related to mining; the
effects of adverse general economic and business conditions; the rate of exchange of the U.S. dollar to the Canadian dollar, the Japanese yen, the Chinese Renminbi and
the Euro; uncertainties associated with the effects of industry competition, inflation, the availability and prices of raw materials and product pricing; Molycorp’s ability
to achieve anticipated production costs and realize the cost benefits of new technologies; unexpected actions of domestic and foreign governments; and various events
that could disrupt operations, including natural events.
For more information regarding these and other risks and uncertainties that Molycorp may face, see the section entitled “Risk Factors” of the Company’s Annual Report
on Form 10-K for the year ended December 31, 2011 and of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2011. Any forward-
looking statement contained in this presentation or the Annual Report on Form 10-K or the Quarterly Report on Form 10-Q reflects Molycorp’s current views with
respect to future events and is subject to these and other risks, uncertainties and assumptions relating to Molycorp’s operations, operating results, growth strategy and
liquidity. You should not place undue reliance on these forward-looking statements because such statements speak only as to the date when made. Molycorp assumes
no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ mater.
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1. As of 6/11/12.2. Represents simple addition of Molycorp’s US GAAP Revenue and EBITDA with Neo’s IFRS Revenue and EBITDA
Molycorp at a Glance
Listed:
Vision & Values:
Strategy:
Founded/IPO:
2011 Financials:
Employees:
� Revenues: $1,197mm, EBITDA: $450mm, Net Income: $228mm(2)
� Mine to Magnetics
� Vertically integrated global operating platform producing high purity rare earth oxides, metals, alloys, magnetic materials and rare metals
� Building the industry leading low-cost and high margin capture rare earth company in the world
� To be the world class rare earth products and technology company recognized for its ETHICS:
� Excellence, Trust, Honesty, Integrity, Creativity and Safety
� NYSE: MCP
� Market capitalization: $2.2 billion (1)
� Shares outstanding: 109.9 million diluted
� 1949/July 29, 2010
� >2,600
What We’ll Discuss
Investment Highlights
A Compelling Market Opportunity
Project Phoenix Update:
Mountain Pass On Track
Molycorp
A Fully Integrated Global Producer
Proprietary Technologies:
Molycorp’s Competitive Advantage
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1
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Key Investment Highlights
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Molycorp Represents The Premier Rare Earth Opportunity
Compelling Rare Earth Sector Fundamentals
� Combines world-class rare earth resource with world leading high-purity rare earth
processing capabilities
� Vertically integrated mine-to-magnetics supply chain
� Global low-cost rare earth oxide producer
� Leading value-add downstream operations
� Significant product diversification and revenue visibility
� Proven and experienced management team
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Molycorp produces all 15 of these rare earth elements commercially
Cerium
Lanthanum
Praseodymium
Neodymium
Samarium
Europium
Gadolinium
Terbium
Dysprosium
Holmium
Erbium
Thulium
Ytterbium
Lutetium
Yttrium
Significant REEs
Reduces
� Weight
� Emissions
� Energy consumption
Allows
� Greater efficiency
� Performance
� Miniaturization
� Speed
� Durability
� Thermal stability
Properties Product Applications
Critical to EnablingHigh-Value Technologies
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2011 Total Demand
105,000 Mt REO
2016E Total Demand
160,000 Mt REO
2011 – 2016E Total Growth
52%
2011–2016E End-Market Demand CAGR (REO)
Robust Expected Demand Growth
2016E REO Demand by Application (160k Mt)
2011 REO Demand by Application (105k Mt)
Source: IMCOA, April 2012. 2011 estimates are ±15%; 2016 estimates are ±20%1. The use of cerium for water purification is included as a high growth application; leading to large increases in demand in 2012 and 2013
(1)
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Additional Supply Is Needed:Molycorp Forecast:
Global Rare Earths Supply and DemandMt, REO
Source: Molycorp Estimates (May 2012)
We believe third party forecasts overestimate the amount of future supply from China andRest of World, and underestimate demand growth in China.
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
2005 2006 2007 2008 2009 2010 2011F 2012F 2013F 2014F 2015F 2016F
China Supply Molycorp Supply - Phase 1 Other Supply China Demand Adjusted Global Demand
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18 25 36% Margin: 19 10 25 36% Margin: 7
N/A 46% Margin: N/A
Pro Forma Run-Rate Indicative Financials
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MCP Key Metrics
2011 2011 Run Rate (2)
Production (kg) 3,369,000 19,050,000
Average Price ($/kg) $87.00 $87.00
Average Cash Cost ($/kg) $20.96 $20.96
2011 Pro Forma Run-Rate EBITDA Sensitivity (1)(2)
Price ($/kg)
$100 $90 $80 $70 $60
$28 (1Q12) 1,588 1,398 1,207 1,017 826
$21 (2011) 1,722 1,531 1,341 1,150 960
$20 (Lynas) 1,741 1,550 1,360 1,169 979
$15 (China) 1,836 1,645 1,455 1,264 1,074
$3 (MCP Expected)
2,065 1,874 1,684 1,493 1,303
Cash COGS ($/ kg)
1,364
1,026
6321,197
450319
0
500
1,000
1,500
2,000
2,500
3,000
Revenue EBITDA Net Income
2,561
1,476
951
PF 2011 Financials: Actual vs. Run- Rate (1)(2)
2011 Run-Rate Actual 2011
1. Represents simple addition of Molycorp’s US GAAP Revenue and EBITDA with Neo’s IFRS Revenue and EBITDA2. Run-rate represents simple arithmetic application of current cash costs and revenues per kg to a higher production rate, which is assumed to produce REOs in the same proportions as we currently produce.
Our actual results upon completion of Project Phoenix will depend upon (i) actual production rates of individual REOs, (ii) pricing at such time, (iii) our costs at such time, including cash costs of production and SG&A expense. You should not assume that our actual results will be consistent with the run-rate amounts set forth on this slide
3. SRK April 2010 Report
(3)
Q1 ’12 - $95.00
Project Phoenix Update
Mountain Pass on Track
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NdPr
16%
Cerium
Non-metal
50%
Other
1%
Lanthanum
Oxide
28%
Other
Lanthanum
Products
(High Purity
Oxides and
Metals)
5%
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Category REO% k tonsREO
(Mlbs)Value at 2010
Prices ($MM)(1)Value at 2011
Prices ($MM)(1)
SEC Guide 7: Proven & Probable 7.98 18,400 2,993 26,066 118,111
NI 43-101: Measured & Indicated 6.68 24,341 3,251 28,313 128,293
NI 43-101: Inferred 6.32 10,446 1,320 11,496 52,091
NI 43-101 Totals 34,787 4,571 39,809 180,383
World-Class, Rare Earth Mine & Processing Facility
� Almost 60 years of operating history
� Mining operations re-started in Dec. 2010
� Fully permitted through 2042
� Construction of Project Phoenix Phase 1 & 2 well underway
� Existing infrastructure
� Water
� Electricity
� Natural gas pipeline
� Easy access to Interstates, rail head, and California seaports
� Estimated 30+ years mine lifebased on Phase 1 production plan
Source: SRK reports dated April 2010 and April 2012
Reserves & Resources
1. Based on average sales price on a REO equivalent basis of $19.20/kg in 2010 and $87.00/kg in 2011
Expected Production Breakdown by REO
Project Phoenix
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Mountain Pass
Project Phoenix
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Project Phoenix Completion Status: June 2012
Project Phoenix facilities that are now operational:
� Mining of 2,800 short tons of fresh ore per day, 4 days/week
� Crushing / Blending
� First Stage Crack Facility
� Mill & Flotation Circuit
� Paste Tailings Facility
� Paste Tailings Permanent Disposal Facility
� Natural Gas Pipeline Lateral Completed
Over the next several months, you’ll see the completion of
construction, testing, and commissioning of:
� Full scale operations of Combined Heat & Power
� Full-size, multi-stage Cracking Facility
� Solvent exchange and heavy concentrate production
� Rare earth oxide separations
� Product finishing
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Project Phoenix
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40,000**
19,050**
3,516*
~8,000 –
10,000*
(mt of REO equivalent)
* Company wide production / guidance as of February 23, 2012
** Mountain Pass only production
Rare Earths We Will Produce at Mountain Pass:
� Lanthanum� Cerium� Praseodymium� Neodymium� Samarium
� Dysprosium� Europium� Terbium� Gadolinium� Yttrium
Project Phoenix Production Ramp
(By Q4 2012)
(By mid-2013)
Excellence in Safety
� Molycorp Mountain Pass: 2,529 days without a Lost-Time
Incident (6.75+ years) as of June 14, 2012
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� Project Phoenix: 2.8+ million
hours worked without a Lost
Time Incident
� Molycorp Metals & Alloys:
Celebrated its 15th year
without a Lost Time Incident
in February, 2012
Molycorp
A Fully Integrated Global Producer
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Molycorp Yesterday
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Facility Locations of Molycorp & Its Subsidiary Companies
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Mining & Production of Concentrate
REO Separation Rare Earth Metals
Upgrade into Alloys, Magnet Powders
Magnetic Material Manufacturing
1 2 3 4 IntermetallicsJapanMetals and AlloysSilmetMountain Pass
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A Highly Strategic Fit
� Combines Molycorp’s world-class rare earth resource with Neo Material’s proven leadership in the production of technologically advanced rare earth products
� Provides immediate direct exposure to China (~70% of global rare earth consumption)
� Leverages Neo Material’s existing infrastructure to allow Molycorp the ability to ramp up its overall production, and utilize much of its 40,000 Mtpa capacity by mid-2013
� Expands capabilities for bonded NdFeB rare earth magnets
� Expands strategic rare metals portfolio used in advanced electronics, photovoltaic, aerospace, catalytic converters, and lighting industries
Molycorp + Neo
Molycorp Products
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Cerium
Lanthanum
Praseodymium
Neodymium
Samarium
Europium
Gadolinium
Terbium
Dysprosium
Holmium
Erbium
Thulium
Ytterbium
Lutetium
Yttrium
Rare Earths
Tantalum
Niobium
Rhenium
Gallium
Indium
Rare Metals
NdFeB Alloy
SmCo Alloy
NdFeB sinteredpermanentmagnets
NdFeB MagneticPowders
Magnetics
XSORBX™
Zirconium materials
Other Products
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Domestic Chinese
Companies, 18%
Japanese Companies,
11%
US Companies, 6%
European
Companies,
5%
Other, 2%
China
42%
Japan
33%
North
America
15%
Europe
7%
Other
3%
Neo Materials
Volume by Geography
(FY’11)
2,800 to 4,800 mt of material sent to NEM’s Chinese facilities for
further processing (7% to 12% of Phase 2)
• 58% exported by Neo Materials outside of China
• 24% sent to multinational companies with operations in China
• 18% sold to domestic Chinese companies
At least 82% of MCP material exits China
* Neo Materials estimates
1.3.
Neo MaterialsVolume Chain
2. Percent of Overall Volume in
China
by National
Origin
How Proprietary TechnologiesDrive Molycorp’s
Competitive Advantage
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Molycorp’s Proprietary Technology Advantage
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1. Project PhoenixAdvanced Technologies
� Processing efficiencies ���� lower
production costs & longer resource life
� Proprietary cracking technology � greater HREE production &
longer resource life
� RE recycling capabilities �
greater HREE production & longer resource life
� Smaller environmental footprint � lower costs and greater
community and stakeholder support over the long-term
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Molycorp’s Proprietary Technology Advantage
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2. XSORBX™ WaterPurification Technologies
� Gives us access to large, high-value water purification markets.
� Allows us to price cerium at water purification technology prices.
� A potentially very large outlet for our cerium
� U.S. target water market opportunity: ~163,000 mt
� A 12.5% penetration into U.S. markets would consume all of Mountain Pass’ cerium at Phase 2 production rates
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Molycorp’s Proprietary Technology Advantage
3. Neo’s Ultra-High-PurityRE Processing Capabilities
� Can process rare earths up to 6Ns purity � opens up new,
high-value niche markets
� Multi-layer ceramic capacitors, used in high-end and/or dual-use electronics
� Phosphors in energy efficient lighting
� Medical devices
� Military and dual use manufacturers increasingly demanding higher-purity REs
� Will accelerate Molycorp’s deployment of those technologies at Mountain Pass and Silmet
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Molycorp’s Proprietary Technology Advantage
4. Neo’s Rare Metal Recyclingand High-Purity Production
� Can deliver purity levels of up to 8Ns, which opens up new, high-value niche markets in:
� Wireless
� LED / Flat Panels
� Solar
� Catalysts
� Super Alloys
� One of the world’s leading manufacturers of gallium trichloride for the LED industry
� State-of-the-art recycling technologies combined with world-class operator expertise
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3
4
Molycorp’s Proprietary Technology Advantage
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5. Intermetallics Next-GenerationMagnet Technologies
� New technology that does not depend upon existing IP
� Greater performance with less reliance on Dysprosium
� Higher production yields
� Large, rapidly growing target markets: automotive and home appliances (small motors)
� JV partners (Daido Steel & Mitsubishi Corp.) have world-class technology and sales/marketing capabilities
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Molycorp’s Proprietary Technology Advantage
6. Boulder Wind PowerTechnology
� Innovative permanent magnet generator technology that uses no Dysprosium.
� PMGs estimated to achieve a levelized cost of energy 30% below the latest geared and direct drive systems.
� This technology can help drive greater global utilization of PMG/Direct Drive designs.
� Molycorp is a preferred provider of magnetic materials for manufacturers that utilize BWP’s technology.
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Summary
Project Phoenix is on track for Q4 Phase 1 production ramp-up.
Neo acquisition will solidify Molycorp’s position as a leading, fully integrated global rare earth producer.
Molycorp’s proprietary technologies are key to our competitive advantage.
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Building Tomorrow’s World Today™
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