Molycorp sees Sumitomo deal closing by September

Mon Jun 20, 2011 5:32pm GMT
 

* Sees $130 million deal closing in Aug or Sept

* Mountain Pass redevelopment already fully financed

* Analyst upgrades share price target, earnings estimate

* Shares up 7.9 percent at $52.81 in New York (In U.S. dollars unless noted)

TORONTO, June 20 (Reuters) - Molycorp (MCP.N: Quote) expects a $130 million debt and equity deal with Sumitomo Corp (8053.T: Quote) to close in August or September and said it continues to see strong demand for all its rare earth products.

The Colorado-based miner added that the $781 million redevelopment of the Mountain Pass mine in California is fully funded even if the Sumitomo deal were to fall through, but said that the financing will provide some needed cushion.

"There's very little doubt in my mind that the deal is very strong still between the two parties and that this deal will close," Molycorp Chief Executive Mark Smith told Reuters.

"I think it will be sometime between mid-August and mid-September."

The financing, which was announced last December and was expected to close in February, will see Sumitomo buy $100 million of Molycorp's common stock and provide $30 million in debt financing.   Continued...

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