David Milstead
Special to The Globe and Mail
Published
Last updated
...Jon Hykawy, an analyst (and PhD holder in physics) for Byron Capital Markets in Toronto, says Molycorp was a mining company with high costs from an aging plant that required high rare earth prices to make money. Now, with its plant network, it’s vertically integrated, poised to sell finished mineral products to the end user, with no middleman. And production improvements as Mountain Pass ramps up will improve its costs.
“This is a company that can [spin off cash flow] in nine figures every year, but the market has no precedent to look at to see this happening, so is a little lost.”
Mr. Hykawy, who has a “buy” rating and $15 target price, adds that Canadian investors have seen the company’s new CEO, Constantine Karayannopoulos, at work for a long period at Neo Materials, “so we have a shot at understanding this story before the Americans.”...