Phantom8 reprinted a Smith SA article:I think the article was...

Phantom8 reprinted a Smith SA article:

I think the article was good on the Lynas part. But look how the Moly portion is written. Smith (the author not the MCP CEO) calls Moly the 800pound gorilla based on a billion dollar project that just broke ground last month that will take a full three years to complete. It also carries with it a number of unproven technologies on a commercial level. Moly is innovative and this will be great if it all works. But Molyheads treat the project as completed because it is funded. No other North American company is viewed this way. Throw in the fact that Moly is in the most taxed and regulated state in the US (my now scorned native state of California), and the attitude becomes even more bizarre. I mean Moly has had environmental problems before and Sacramento ate their lunch over it in the past. I think if Obama is a one term president and a turtle dies near Mountain Pass, Ill be buying MCP put options. I mean the greens are very powerful and rather wacky in Sacramento. And they have a lengthy track record of success as well.
Also note Molys pricing comes after Lynas production. So if you believe Duetche, Citi and JPM about Weld prices falling back to $35 long term, you must dispute the Dundee Securities conclusions (particularly as they apply to Moly). Now as a practical matter I think Lynas will get $80 per kilo for the first ten years of production. And I even think Moly will achieve much of their plans.
Bottom line is that I am in and out of Moly these days and will end up investing in them long term. But Lynas guys know something Molyheads have never known: Multiyear, billion dollar projects take a lot of time and patience and the road can get rocky. When Lynas is producing and cash flow positive, and the rare earth story is maturing, fundamentals will set in and eventually Lynas will trade at a large premium to MCP. That day is near because MCP is running out of near term catalysts and Lynas has them on its doorstep. Thats just how the trading has set itself up at this point. We shall see. But this is my strategy for these two companies. Because long term, I like them both.