Molycorp Leads Rare Earths Rally After New Supply Agreement (MCP, REE, AVL, LYSCF, REMX, NEMFF)
Shares of Molycorp (MCP), the largest U.S.-based rare earths miner, are soaring 8% and leading a broader rally in the rare earths sector after the company announced that one of its major supply agreements has been modified to allow the company to receive a higher maximum price for the the lanthanum it produces this year and next year. Terms of the contract are effective July 1 and were not disclosed.
Investors like the news as the Rare Earth Stocks Index is higher by 4.4%. Colorado-based Molycorp added that the unidentified lanthanum customer extended a contract with the company for future rare earths production that was supposed to expire in 2012 to 2015.
Shares of Rare Element Resources (REE) are also participating in the rare earths rally, surging 6% after Global Hunter Securities initiated coverage of the stock with a “buy” rating and a price target of $18.50, which is more than 50% above where the shares currently trade. The stock has jumped 7% in the past month.
Avalon Rare Metals (AVL) is higher by 2% while Lynas Corporation (LYSCF) and Market Vectors Rare Earth/Strategic Metals ETF (REMX), the lone rare earths ETF, are both up 1%. Neo Material Technol (NEMFF) is the Index laggard with a decline of 1%.
Investors can track the Rare Earth Stocks Index for performance trends and a suite of other metrics at tickerspy.com.
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