During a conference call to discuss financial results, Molycorp CEO Mark Smith told analysts, "The start-up of our concentrate production circuit is a major accomplishment for the company."
Mountain Pass plans to run the mill for a three week period, produce a large amount of concentrate for processing and then pause milling in order to further optimize the process. "The entire concentrate circuit will run intermittently between now and continuous Phase One operations, which is slated at the beginning of the fourth quarter of this year," said Smith.
Over the next six months Molycorp plans to complete construction, testing and commissioning of a full-size, multi-stage cracking facility; solvent exchange and heavy concentrate production; rare earth oxide separations; full scale operations of a combined heat and power plant; and product fishing.
Immediately after the closing of Molycorp's acquisition of Neo Materials in early June, Smith said Molycorp intends "to accelerate our development of ultrahigh-purity separates capabilities for heavy rare-earths at both our Molycorp Mountain Pass and Molycorp Silmet facilities."
"This technology can be put to use very quickly, as we have been producing and stockpiling a heavy-rare earth concentrate stream ever since we launched NFP separations at Mountain Pass," he added. "We currently have tons of this concentrate at Mountain Pass. With Neo, we will have the ability to again process this concentrate almost immediately into ultrahigh-purity heavy rare-earths products."
During the first quarter Molycorp also announced a 36% increase in proven and probable reserves at Mountain Pass, which equates to 2.94 billion pounds of contained REO equivalent in the ground or more than 1.3 million metric tons.
Mountain Pass produced 615 metric tons of REO-equivalent product, down from 730 metric tons during the first quarter of 2011. Molycorp COO James S. Allen told analysts, "We slowed production during the quarter to manage inventory levels both for finished product inventory and of rare earth concentrate stockpiles."
"Our goal remains to ensure Project Phoenix Phase 1 production rates commence at the beginning of the fourth quarter this year," Smith said. "We are also reaffirming that we expect to reach our 2012 production guidance range of 8,000 to 10,000 metric tons of REO equivalent products across all of our operating segments this year."
Also during the first quarter, Molycorp Silmet reported production of 410 metric tons of REO equivalent as well as 170 metric tons of specialty metals (niobium, tantalum).
Molycorp reported a net loss of $3.5 million or negative 7-cents per share for the first quarter of this year, down from a net loss of $2.2 million or negative four-cents per share for the same period of last year, "taking into account certain non-cash, out-of-ordinary business expenses, and other operational expansion items."
The company reported an adjusted net income of $18.3 million or 18-cents per share during the first-quarter 2012, up substantially from the adjusted net income of $2 million or one-cent per share reported during the first-quarter 2011.