Molycorp (MCP) said today it has entered a memorandum of understanding with Sumitomo in which Sumitono will put together a $130 million equity ad debt financing package for use in completing Molycorp’s rare earth “mine-to-magnets” manufacturing supply chain.
Molycorp will provide Sumitomo with substantial quantities of several rare earth products over the next seven year.
Under terms of the agreement, Sumitomo will purchase $100 million new shares of Molycorp common stock, as well as provide it with $30 million in debt financing at a low interest rate. The transactions are expected to close in February 2011.
Molycorp shares are trading up 2.8% Friday.
The Rare Earth/Strategic Metals ETF (AMEX:REMX) is trading up over .2% Friday.
Molycorp is a 4.4% holding of the fund. Other top U.S.-listed holdings include Thompson Creek Metals (TC), trading up over .2% Friday, Titanium Metals (TIE), trading down .6%, and RTI International (RTI), trading down over .1%.
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