Listen carefully during the delayed earnings call tomorrow for news on XSORBX.
Considering how overladen their mineral basket is with cerium, increased sales and profitability with this product line are an absolute must.
Remember, former CEO Mark Smith said in the 1st qtr 2012 conference call the following:
"To put this in the perspective, the United States market alone represents approximately, 163,000 metric tons annually of XSORBX product on the cerium oxide basis. Assuming only a 12.5% market penetration for XSORBX into these markets, we would consume all of the cerium that we would produce at full Phase 2 production."
Don't forget Phase 2 has been put on hold by Con K.
We now know that the main problem Con K will be talking about tomorrow is the size and magnitude of the intangibles writedown from the acquisition of his old company, Neomaterials, which may be a one billion dollar item.
This problem which led to the 2 week delay in the earnings call will, in my opinion at least, lead to a further stock slide, at least temporarily, and needs to be accompanied with some good news, somewhere.
Strong and growing XSORBX news which would deal with their cerium over- production issue would be fantastic news at this momentous time in the history of Molycorp.
I will go out on the limb here and say that a complete writeoff of the Neo Materials intangible problem along with news of strongly trending XSORBX sales might arrest the stock slide with this company.
For sure it would take a lot of the pressure off management, and might even help in the decision to go with Phase 2 of the Phoenix Project.
Especially if progress has been reached on the water and energy issues as well, items that were absolute must do's for this company to achieve its' stated goal to be the low cost global producer of rare earths and products.
Having said this, it is still my belief that the stock will continue to fall prey to short sellers and will continue sliding toward its' real value as the market sees it; while simultaneously the company will be possibly dismembered by the takeover of the Mountain Pass facility by large shareholder Molymet, with a spinoff of the said old Neo Materials part to a management group possibly led by Con K, now unburdened by "bubble level" intangibles, as well as selloff or consolidation of the rest of the global operation. |
