Molycorp, Inc (MCP)

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Molycorp, Inc. (MCP)

Neo Material Technologies Acquisition Call

March 9, 2012 8:30 AM ET

Executives

Brian Blackman – Senior Manager, IR

Mark Smith – President and CEO

Constantine Karayannopoulos – President and CEO, Neo Materials Technologies

Michael Doolan – EVP and CFO, Neo Materials Technologies

James Allen – CFO and Treasurer

Analysts

Anthony Young – Dahlman Rose

Matthew Gibson – RBC Capital Markets

Paretosh Misra – Molycorp

Colin Rusch – ThinkEquity

Jagadish Iyer – Piper Jaffray

Michael Gambardella – JP Morgan

Daniel Kim – Paradigm Capital

Presentation

Operator

Good day ladies and gentlemen and welcome to the Molycorp Incorporated to Acquire Neo Material Technologies Incorporated Conference Call. My name is Juanita. I’ll be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions).

As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Brian Blackman, Senior Manager of Investor Relations. Please proceed.

Brian Blackman

Thank you, operator, and good afternoon to everyone. Yesterday, after market close, we issued a press release announcing a definitive agreement under which Molycorp will acquire Neo Material Technologies or Neo Materials. If you have not yet seen the press release, you can find it posted on both companies website at www.molycrop.com/investors and www.neomaterials.com.

As a reminder, today’s call is being webcast and a replay will be archived on the website. For those of you dialed into the call, a slide show that accompanies our prepared remarks is available on either companies websites. For those of you listening by webcast, the slides will be presented in the webcast player. Please note that you need to advance slides on your own.

Slide two contains the Safe Harbor statement. As always, we need to advise you that some of the information discussed on this conference call will contain forward-looking statements that involve risks, uncertainties and assumptions that are difficult to predict. The company’s actual results could differ materially from those contained in such statements because of a variety of factors including those described in detail in the risk factors section of Molycorp’s Annual Report on Form 10-K for the year ended December 31, 2011.

On slide three, I’d like to – on the call today is Molycorp’s President and Chief Executive Officer, Mark Smith; and Constantine Karayannopoulos, President and Chief Executive Officer of Neo Materials. Also with us for question-and-answer session is Jim Allen, Chief Financial Officer and Treasurer of Molycorp; and Michael Doolan, Executive Vice President and Chief Financial Officer of Neo Materials.

At this time let me turn the call over to Mark Smith.

Mark Smith

Thank you, Brian, and thank you all for joining us today. This is an exciting day for Molycorp and for Neo Materials. The agenda for our call is shown on slide four. As you all know, yesterday, we announced our signing of definitive agreement to acquire Neo Materials for $1.3 billion.

Today, I’m going to make some opening remarks on this transaction and what it means to our company, I will then introduce Constantine, who is the President and Chief Executive Officer of Neo Materials. At the end, I’ll come back and highlight the rationale behind the combination of our companies and why we see significant opportunities for growth through this transaction.

Moving to slide five. If I had to summarize the most important takeaways from this transaction, it would be these: number one, this transaction will combine Molycorp’s world-class rare earth resource and low-cost production from our Project Phoenix with a proven leader in the development, processing and distribution of technically advanced rare earth products. It would create one of the world’s leading vertically integrated rare earth technology companies with global reach. Number two, this transaction will give Molycorp greater exposure to the world’s largest and fastest growing rare earth consuming market, namely China, which now consumes about 70% of global rare earth production.

Third, this transaction leverages Neo Materials’ existing infrastructure to allow Molycorp to ramp up its overall production once Project Phoenix Phase 2 production begins in 2013. Fourth, it expands Molycorp’s production capabilities to include Neo Materials’ Magnequench patented magnet powder portfolio used to produce neodymium-iron-boron bonded rare earth magnets.

Fifth, it will also give us the ability to produce very high quality gallium, rhenium, and indium as well as zirconium oxide. And finally, the combination is expected to be accretive to Molycorp’s 2012 earnings and cash flow. While we have yet to formally launch the integration process of our two companies, we have already identified significant synergies that can be expected to further strengthen the financial performance of Molycorp in the future.

Let’s move to slide six. Let me cover the key points of the deal structure on slide six. If you have any questions Jim Allen and Michael Doolan can address those during the Q&A portion of our call. The transaction is valued at approximately $1.3 dollars. Under the proposed terms Molycorp will acquire Neo Materials outright at a value of $11.30 Canadian per share.

Neo Material shareholders will have the right to elect their preferred consideration mix of cash and newly issued Molycorp stock with the total consideration being approximately 71% cash and 29% Molycorp stock. To fund the cash portion we intend to use the proceeds from our Molymet private placement of $390 million as well as pursue a debt offering to be led by Morgan Stanley and Credit Suisse.

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