Molycorp Reports Record Fiscal Year 2011 Results

Molycorp, Inc. (NYSE: MCP) ('Molycorp? or the 'Company?) today announced
financial and operating results for the fourth quarter and full year
2011.

'2011 was a very successful year of accomplishment for Molycorp,? said
Mark Smith, Molycorp President and Chief Executive Officer. 'We solidly
turned the corner to profitability and we registered net sales of nearly
$400 million. We kept Project Phoenix tracking to an accelerated
timeline, and succeeded in becoming the world′s first company outside of
China to assemble a fully integrated rare earth mine-to-magnets supply
chain. We continue to produce and commercialize new products. And, we
remain laser-focused on ensuring that we are operating at peak
performance so we can meet growing global demand for rare earths for
years to come.?

'This Company is all about execution ? about delivering what we said we
would deliver,? Smith said. 'I could not be more proud of the
performance of the Molycorp family.?

QUARTERLY RESULTS

Quarterly net revenues were $132.9 million, down 3.7% from $138.0
million in the third quarter of 2011 and significantly higher than $21.7
million in the fourth quarter of 2010. By contrast, Smith noted, a
weighted basket¹ of rare earths -- cerium oxide, lanthanum
oxide, and didymium oxide -- declined 47% over the Q3-Q4 period of 2011,
according to prices published by Metal-Pages.com. Molycorp sales volumes
of cerium-based products sequentially grew 237%.

Gross profit was $70.3 million, a decrease of 14.7% from the third
quarter of 2011 due primarily to higher raw material and chemical costs,
and a slight change in product mix. Gross margin of 52.9% decreased 6.8
percentage points compared to the prior quarter.

Operating income during the fourth quarter of 2011 was $46.0 million,
down from operating income of $66.9 million during the third quarter of
2011. The decrease was primarily attributed to higher costs of goods
sold and higher general administrative costs. However, Q4 operating
income was up significantly from an operating loss during the fourth
quarter 2010 of $9.9 million.

Fourth quarter net income attributable to common stockholders was $26.6
million, or $0.26 per diluted share. Adjusted EPS of $0.41 per diluted
share takes into account certain non-cash and other out-of-ordinary
operational and business expansion items as compared to U.S. GAAP
earnings per share.

RECORD FULL YEAR FINANCIAL PERFORMANCE

Net revenues for the full year ended December 31, 2011 were $396.8
million, up $361.7 million from $35.2 million for the full year ended
December 31, 2010. The increase was due to higher volumes out of
Mountain Pass, higher pricing, and expanded sales from the Silmet and
MMA operations, which were acquired in the second quarter of 2011.

Gross profit was $218.9 million, a substantial increase compared to a
gross loss of $2.4 million during the prior year. Gross margin was 55.2%
for the year, compared to a negative margin of 6.9% during 2010.

Operating income for the full year 2011 was $152.9 million, up from an
operating loss of $51.2 million during the full year 2010.

The Company generated record full year 2011 net income attributable to
common stockholders of $117.5 million, or $1.27 per diluted share,
compared to a loss of $50.8 million, or $0.81 per diluted share in the
prior period. On a non-GAAP, adjusted basis, 2011 diluted earnings per
share was $1.73.

2011/2012 MILESTONE ACHIEVEMENTS

Molycorp achieved a number of critical business and operational
milestones in 2011, and into the opening weeks of 2012. The Company:

• 
  Formally launched the sequential start-up of its new Project Phoenix
  facility at Mountain Pass this week.
  
  
  • 
    Active mining at a full mine production rate of approximately
    2,800 short tons of fresh rare earth ore is in full swing and has
    been underway for several weeks.
    
  • 
    Mechanical completion of the new Crushing Facility has been
    achieved and the crusher is operational.
    
  • 
    Mechanical completion and steam testing of the initial Cracking
    Facility has been achieved and feedstock from stockpiled material
    has successfully been fed into the system.
    
  • 
    The first test firing of the turbines in the onsite Combined Heat
    and Power (CHP) plant will occur this week.
    
• 
  Assembled the components of its mine-to-magnets strategy by adding
  metal and alloy manufacturing capabilities, through acquisitions of
  its Molycorp Metals and Alloy and Molycorp Silmet subsidiaries, and by
  signing an agreement to form a joint venture with Daido Steel and
  Mitsubishi Corp. to manufacture permanent rare earth magnets.
  Construction of the magnet production facility is underway, and
  operations are expected to commence by the end of 2012.
  

• 
  Achieved its 2011 contracting goal for Phase 1 production capacity,
  with 78% of Phase 1 being signed in customer agreements or reserved
  for XSORBX? production.
  
• 
  Sold a total of 55 metric tons of its proprietary cerium-based XSORBX?
  products in 2011, and is on track to sell 20% of its Phase 1
  production capacity through XSORBX? products by the end of 2013.
  

• 
  Entered into a three-year supply agreement with Hitachi Metals for
  rare earth magnetic materials, such as didymium metal and alloy, and
  lanthanum oxide.
  
• 
  Made a strategic investment in Boulder Wind Power, which has developed
  a rare earth magnet powered wind turbine generator that relies on
  permanent rare earth magnets that require no dysprosium, a rare earth
  that is truly scarce in today′s markets.
  
• 
  Increased our strategic flexibility through a $390 million capital
  investment commitment from Molymet.
  

2012 OUTLOOK

As of February 23, 2012, the Company is re-affirming its annual
production of REO equivalent products to be in a range of 8,000 metric
tons to 10,000 metric tons for the full year. The Company believes it is
positioned for year-over-year sales growth, given existing customer
orders and a growing pipeline of global business opportunities.

The Company also anticipates a change to the cost of goods sold (COGS)
related to Project Phoenix ramping, as well as higher production costs
on a consolidated basis. As a result of costs necessary to successfully
prepare for the accelerated completion of Project Phoenix, the ramp up
to Phase 1 production levels, and increased chemical costs, Molycorp is
estimating that COGS will increase slightly in 2012 on a per-kilogram
basis of REO equivalent. Many of these increases however, are expected
to normalize moving into 2013 when the Company reaches higher production
levels. The Company added that it has sufficient working capital to
execute on its stated strategy and its balance sheet remains strong.

Commenting on the new outlook, Smith continued, 'Our primary focus
remains on executing Project Phoenix and bringing a stable supply of
rare earth products to global markets. As we begin the sequential
start-up of Project Phoenix, we are shifting into a year of transition
to test and ramp our new production capacity. We remain on track in
making the necessary investments in our business, to improve our
operating and financial performance, and deliver sustainable value for
all Molycorp shareholders.?

CONFERENCE CALL TODAY AT 4:30 P.M. EASTERN

Molycorp will conduct a conference call today to discuss these results
at 4:30 p.m. EST, hosted by Mark Smith, Chief Executive Officer, and Jim
Allen, Chief Financial Officer. Investors interested in participating in
the live call from the U.S. should dial +1 (866) 543-6403 and reference
passcode number 49932366. Those calling from outside the U.S. should
dial +1 (617) 213-8896 and use the same confirmation number. A telephone
replay will be available approximately two hours after the call
concludes through March 23, 2012 by dialing +1 (888) 286-8010 from the
U.S., or +1 (617) 801-6888 from international locations, and entering
passcode: 84743189.

There will also be a simultaneous live audio webcast available on the
Investor Relations section of the Company's website at www.molycorp.com/investors.
The webcast will be archived on the website for 90 days.

FINANCIAL STATEMENTS AND SUPPLEMENTARY TABLES

SEGMENT INFORMATION

EARNINGS PER SHARE

PRODUCT REVENUE / VOLUME / ASP TABLE

NON-GAAP ADJUSTED NET INCOME

Adjusted EPS is a non-GAAP measure that excludes certain non-cash items
and other out-of-ordinary operational and business expansion items. The
Company′s management believes adjusting out these items, including but
not limited to purchase accounting adjustments, stock-based
compensation, out-of-ordinary expenses/income and other miscellaneous
charges is useful to investors because it provides an overall
understanding of the Company′s historical financial performance and
future prospects. Management believes adjusted EPS is an indication of
the Company′s base-line performance. Exclusion of these items permits
evaluation and comparison of results for the Company′s core business
operations, and it is on this basis that management internally assesses
the Company′s performance.

NON-GAAP GROSS SALES

Gross sales is a non-GAAP measure that is included to provide additional
detail on segment operations and vertical integration strategy. The
Company′s management believes this presentation provides a better
understanding of the performance of each operating segment in terms of
production volumes, inventory allocation, and costs.

ABOUT MOLYCORP

With offices in the U.S., Europe, and Japan, Molycorp, Inc. is the
largest REO producer outside of China. Inaddition to its
current production of rare earth oxides at its flagship rare earth mine
and processing facility at Mountain Pass, California, the Company
produces rare earth metals, rare earth alloys (such as neodymium-
iron-boron and samarium-cobalt alloys) and rare metals such as niobium
and tantalum. The rare earths and rare metals Molycorp produces are
critical inputs in existing and emerging applications including: clean
energy technologies, such as hybrid and electric vehicles and wind power
turbines; multiple high-tech uses, including fiber optics, lasers and
hard disk drives; numerous defense applications, such as guidance and
control systems and global positioning systems; advanced water treatment
technology for use in industrial, military and outdoor recreation
applications; and other technologies. For more information, please visit http://www.molycorp.com.

SAFE HARBOR STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This release contains forward-looking statements that represent
Molycorp′s beliefs, projections and predictions about future events or
Molycorp′s future performance. Forward-looking statements can be
identified by terminology such as 'may,? 'will,? 'would,? 'could,?
'should,? 'expect,? 'intend,? 'plan,? 'anticipate,? 'believe,?
'estimate,? 'predict,? 'potential,? 'continue? or the negative of these
terms or other similar expressions or phrases. These forward-looking
statements are necessarily subjective and involve known and unknown
risks, uncertainties and other important factors that could cause
Molycorp′s actual results, performance or achievements or industry
results to differ materially from any future results, performance or
achievement described in or implied by such statements.

Factors that may cause actual results to differ materially from expected
results described in forward-looking statements include, but are not
limited to: Molycorp′s ability to secure additional capital to implement
its business plans; Molycorp′s ability to complete its initial
modernization and expansion efforts, including the accelerated start-up
of the Mountain Pass facility, which management refers to as Project
Phoenix Phase 1, and the second phase capacity expansion plan, which
management refer to as Project Phoenix Phase 2, and reach full planned
production rates for REOs and other planned downstream products, in each
case within the projected timeframe; the final costs of the Project
Phoenix Phase 1, including with accelerated start-up of the Mountain
Pass facility, and Project Phoenix Phase 2, which may differ from
estimated costs; uncertainties associated with Molycorp′s reserve
estimates and non-reserve deposit information; uncertainties regarding
global supply and demand for rare earths materials; Molycorp′s ability
to successfully integrate recently acquired businesses; Molycorp′s
ability to reach definitive agreements for a joint venture to
manufacture neodymium-iron-boron permanent rare earth magnets; the
satisfaction of the closing conditions necessary to complete Molymet′s
investment, including our receipt of necessary government regulatory
approvals; Molycorp′s ability to maintain appropriate relations with
unions and employees; Molycorp′s ability to successfully implement its
'mine-to-magnets? strategy; environmental laws, regulations and permits
affecting Molycorp′s business, directly and indirectly, including, among
others, those relating to mine reclamation and restoration, climate
change, emissions to the air and water and human exposure to hazardous
substances used, released or disposed of by Molycorp; and uncertainties
associated with unanticipated geological conditions related to mining.

For more information regarding these and other risks and uncertainties
that Molycorp may face, see the section entitled 'Risk Factors? of the
Company′s Annual Report on Form 10-K for the year ended December 31,
2011 and of the Company′s Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2011. Any forward-looking statement
contained in this press release or the Annual Report on Form 10-K or the
Quarterly Report on Form 10-Q reflects Molycorp′s current views with
respect to future events and is subject to these and other risks,
uncertainties and assumptions relating to Molycorp′s operations,
operating results, growth strategy and liquidity. You should not place
undue reliance on these forward-looking statements because such
statements speak only as to the date when made. Molycorp assumes no
obligation to publicly update or revise these forward-looking statements
for any reason, or to update the reasons actual results could differ
materially from those anticipated in these forward-looking statements,
even if new information becomes available in the future, except as
otherwise required by applicable law.

¹ Weighted by relative revenues from 2011 sales.

Molycorp, Inc.

Jim Sims, +1 303-843-8062

Vice
President Corporate Communications

Jim.Sims@Molycorp.com

or

Brian
Blackman, +1 303-843-8067

Senior Manager, Investor Relations

Brian.Blackman@Molycorp.com