Molycorp Reports Second Quarter 2012 Results

Molycorp, ?Inc. (NYSE:MCP) ('Molycorp? or the 'Company?) today announced
financial and operating results for the second quarter 2012.

'Molycorp continues to make significant progress on our three strategic
priorities: completing Project Phoenix, commercializing XSORBX, and
integrating Neo Materials (now known as Molycorp Canada) into Molycorp,'
said Mark Smith, President and Chief Executive Officer. 'Our phased
start-up of Project Phoenix Phase 1 is in full-swing, and we are on
target to meet our accelerated schedule of achieving the Phase 1
production rate of 19,050 metric tons in Q4.'

Smith continued: 'We successfully completed the acquisition of Neo
Materials during the quarter, and are now producing a full range of
ultra-pure, highly engineered custom materials, including heavy rare
earths. Molycorp Magnequench had a record quarter in Q2 2012, selling
1,880 mt of alloy powders. In the brief integration period to date, I
continue to be impressed with the knowledge, work ethic, and passion
which all of our employees bring to the Molycorp family. I continue to
believe the addition of Molycorp Canada better positions the Company
through diversification into new geographies and sophisticated end-use
markets. Our vertical integration into a comprehensive provider of
advanced materials has expanded significantly with the addition of
Molycorp Canada.'

QUARTERLY RESULTS

Net sales for the quarter were $104.6 million, up 5% from the second
quarter 2011. Molycorp Silmet and Molycorp Metals ?& Alloys (MMA) were
acquired during the second quarter of 2011, and Molycorp Canada was
acquired on June 11, 2012, which both contributed to net sales during Q2
2012.

Molycorp's second quarter GAAP gross loss was $4.1 millionduring
the quarter, compared to gross profit of $56.7 million during the second
quarter of 2011. Gross profit decreased substantially from the prior
year period as a result of lower product volumes shipped, lower prices,
increased production costs, and other transaction costs related to
acquiring Molycorp Canada. Gross loss during the quarter was negatively
impacted by $30.4 million of expenses related to certain inventory
write-downs, the impact of purchase accounting, stock-based compensation
in cost of sales, and abnormal costs.

Molycorp′s second quarter GAAP loss attributable to common stockholders
was $67.6 million, or a loss of $0.71 per diluted share. Earnings
decreased substantially from the prior year period as a result of lower
product volumes, lower prices, costs related to the Project Phoenix
transition, and other transaction costs related to acquiring Molycorp
Canada. Adjusted loss per diluted share of $0.03 reflects operational
expansion items, out-of-ordinary business expenses, and certain non-cash
items as compared to U.S. GAAP loss per share, such as $52.8 million
related to the acquisition of Molycorp Canada, $19.5 million in
consolidated inventory write-downs, and $8.4 million in purchase
accounting adjustments impacted earnings, among others.

2012 OUTLOOK

As of August 2, 2012, the Company is re-affirming its annual production
of REO equivalent products to be in the range of 8,000 mt to 10,000 mt
for the full year across its Mountain Pass, Sillamäe and Tolleson
facilities, which does not include production from its newly acquired
Molycorp Canada operations. The Company continues to believe it is well
positioned for year-over-year sales growth given the Mountain Pass
ramp-up, existing customer orders, a growing pipeline of global business
opportunities, and its acquisitions.

Capital expenditures for Project Phoenix Phase 1 and Phase 2,
commissioning and start-up, and other capital projects at our Molycorp
Mountain Pass facility are expected to be approximately $289 million on
an accrual basis for the remainder of 2012. All other capital
expenditures across the Company (including Molycorp Canada) are expected
to be approximately $17 million for the remainder of 2012.

All of the amounts for future capital spending described above are
estimates that are subject to change as the projects are further
developed. The Company is encountering cost pressures on its projects
and has initiated measures to mitigate certain adverse cost trends. The
Company may incur additional costs, which may be material, if its
mitigation measures are not successful.

The Company expects to fund operating expenses, working capital, capital
expenditures and other cash requirements from its available cash
balances, anticipated cash flow from operations, and other financing
arrangements. Based on our on-going monitoring of the rare earth
industry and our business, we expect that our cash flow from operations
for the remainder of 2012 will likely be less than we expected.
Accordingly, we will need to secure additional financing for a
substantial portion of our remaining 2012 capital expenditures and other
cash requirements. For example, we are in negotiations with various
third-parties with respect to potential equipment leasing arrangements,
asset-based revolving credit facilities and other debt financing
arrangements. We cannot assure you that we will be able to obtain any
such financing on commercially acceptable terms or at all.

If we are unable to raise sufficient capital through public or private
securities offerings, or other alternative sources of financing, we will
implement a short-term business plan in 2012. Under this plan,
discretionary capital expenditures, and if necessary, non-discretionary
capital expenditures will be curtailed ?during ?the second half of the
year.

2012 MARKET DYNAMICS

During the second quarter of 2012, prices for most of our products have
stabilized or declined at a much slower pace than earlier in the year.
We believe this trend may continue in the third and fourth quarter of
2012, although there can be no assurance.

Commenting on recent market conditions, Smith said: 'The diversity of
our vertical integration strategy is showing its value, as we have
observed strengthening markets for certain downstream rare earth
products, including bonded magnetic powders produced by Molycorp
Magnequench. On the whole, pricing of rare earth oxides have flattened,
although the floor remains soft in certain Japanese supply chains. We
believe that these supply chains will continue to de-stock over the
second half of 2012. The longer-term supply and demand picture remains
tight as Chinese regulations increase and the industry continues to
consolidate within China. Molycorp remains well positioned to fulfill
the demand gap as it brings reliable supply online from Project Phoenix.'

Smith continued: 'We see motor miniaturization and the ongoing increase
in hybrid electric and full electric vehicle sales, driven by the need
for increased global fuel efficiency, as a key growth driver for our
industry. We anticipate the continuing stabilization of pricing and,
more importantly, Molycorp's availability of supply as having a positive
impact on the growing demand of neodymium-iron-boron (NdFeB) magnets in
the automotive space. Design engineers should not worry any longer about
uncertainty of supply.'

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
Michael Doolan, Executive Vice President and Chief Financial Officer.
Investors interested in participating in the live call from the U.S.
should dial +1 (866) 783-2139 and reference passcode number 62830722.
Those calling from outside the U.S. should dial +1 (857) 350-1598 and
use the same confirmation number.

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.

FINANCIAL STATEMENTS AND SUPPLEMENTARY TABLES

TABLE 1: BALANCE SHEET

TABLE 2: INCOME STATEMENT

TABLE 3: STATEMENT OF CASH FLOWS

TABLE 4: SEGMENT INFORMATION

TABLE 5: EARNINGS PER SHARE

TABLE 6: PRODUCT REVENUE, VOLUME, ASPS

TABLE 7: NON-GAAP ADJUSTED NET INCOME RECONCILIATION

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.

ABOUT MOLYCORP

Molycorp is a leading rare earths and rare metals company, and combines
a world-class rare earth resource at Mountain Pass, California, with
world-class ultra-high-purity rare earth and rare metal materials
processing capabilities. With 26 locations across 11 countries, Molycorp
is vertically integrated across the global rare earth mine-to-magnetics
supply chain. It produces ?rare earth magnetic materials as well as ?a
variety of high-purity, custom engineered products ?from 13 different
rare earths (lights and heavies) as well as five rare metals (gallium,
indium, rhenium, tantalum and niobium), and the transition metals
yttrium and zirconium. Through its Molycorp Magnequench subsidiary, the
Company is a leading global producer of neodymium-iron-boron (NdFeB)
magnet powders, used to manufacture bonded NdFeB permanent rare earth
magnets. Through its joint venture with Daido Steel and Mitsubishi
Corporation, Molycorp expects to begin manufacturing next-generation,
sintered NdFeB permanent rare earth magnets in early 2013. The rare
earths and rare metals materials that Molycorp produces are critical
inputs in wide variety of existing and emerging applications, including
the following: advanced transportation technologies, such as hybrid
electric, plug-in hybrid electric, and all-electric vehicles; clean
energy technologies, such as solar and wind power systems; energy
efficiency technologies, such as high efficiency motors and appliances,
compact fluorescent lights, and color displays; computing and
communications applications, including fiber optics, lasers, and hard
disk drives; defense and aerospace applications, such as satellites,
guidance and control systems, and global positioning systems; and
advanced water treatment technologies for use in municipal wastewater,
industrial wastewater, pool & spa, and outdoor recreation applications.
For more information please visit ?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: the potential need to secure additional capital to implement
Molycorp's business plans, and Molycorp's ability to successfully secure
any such capital; Molycorp's ability to complete its planned capital
projects, such as its initial modernization and expansion efforts,
including the accelerated start-up of the Molycorp Mountain Pass
facility, which management refers to as Project Phoenix Phase 1, and the
second phase capacity expansion plan, which management refers to as
Project Phoenix Phase 2, and reach full planned production rates for REO
and other planned downstream products, in each case within the projected
time frame; the success of Molycorp's cost mitigation efforts in
connection with Project Phoenix, which if unsuccessful, might cause its
costs to exceed budget; the final costs of Molycorp's planned capital
projects, such as Project Phoenix Phase 1 and Project Phoenix Phase 2,
which may differ from estimated costs; Molycorp's ability to
successfully integrate Neo Material Technologies, Inc. (now Molycorp
Canada), with its operations; Molycorp's ability to achieve fully the
strategic and financial objectives related to the acquisition of
Molycorp Canada, including the acquisition's impact on Molycorp's
financial condition and results of operations; and unexpected costs or
liabilities that may arise from the acquisition, ownership or operation
of Molycorp Canada. Also as a result of the Molycorp Canada acquisition,
Molycorp's business performance may be materially affected by a number
of other factors and uncertainties including, but not limited to: the
rate of exchange of the U.S. dollar to the Canadian dollar, the Japanese
yen, and the Chinese Renminbi; new products pricing; the competitive
environment for these new products; unexpected actions of domestic and
foreign governments; and various events which could disrupt operations,
including natural events and other risks. Other risk factors and
uncertainties that may cause actual results to differ materially from
expected results include: uncertainties associated with Molycorp's
reserve estimates and non-reserve deposit information, including
estimated mine life and annual production; uncertainties related to
feasibility studies that provide estimates of expected or anticipated
costs, expenditures and economic returns, REO prices, production costs
and other expenses for operations, which are subject to fluctuation;
uncertainties regarding global supply and demand for rare earths
materials; uncertainties regarding the results of Molycorp's exploratory
drilling programs; Molycorp's ability to enter into additional
definitive agreements with its customers and its ability to maintain
customer relationships; Molycorp's sintered neodymium-iron-boron rare
earth magnet joint venture's ability to successfully manufacture magnets
within its expected timeframe; Molycorp's ability to successfully
integrate other acquired businesses; 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 Reports on Form 10-Q. Any
forward-looking statement contained in this release or the Annual Report
on Form 10-K or the Quarterly Reports 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.

Molycorp, ?Inc.

Jim Sims, +1-303-843-8062

Vice
President Corporate Communications

Jim.Sims@Molycorp.com

Brian
Blackman, +1-303-843-8021

Senior Manager, ?Investor Relations

Brian.Blackman@Molycorp.com