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Will Molycorp See a Revenue Explosion in 2012? 

Remember Molycorp ? The rare earth company was an incredible momentum stock for much of 2011. Then, prices for the hard-to-process metals started to drop, and the stock plummeted.

Rocky Smith, plant manager of Molycorp Inc. Mountain Pass rare earths mining and processing facility.
Jacob Kepler | Bloomberg | Getty Images
Rocky Smith, plant manager of Molycorp Inc. Mountain Pass rare earths mining and processing facility.

Although the trade remains volatile, the company is off to a solid start to 2012 — a year in which it expects to finally ramp up mining/processing of new rare earth material.

If prices stabilize late in 2012, Molycorp could see a revenue explosion. That is a big "if", and based on the company's fourth quarter earnings, it can't come soon enough.

"This company is all about Project Phoenix," said CEO Mark Smith, referring to the name of the mining and processing project in Mountain Pass, California that should be running at full capacity before the end of the year.

"We continue to be optimistic (about price)," Smith added. "But we learned last year not to speculate too boldly."

The 41-cents ex-items was in line with expectations, but revenue came in below consensus. Perhaps more importantly, revenue and profit were down sequentially.

"Even though revenue looks a little light, it's actually impressive in a rare earth market where some prices went down 50-percent," Smith said.

The earnings news is likely going to put selling pressure on the stock, begging the question as to whether investors are unfairly beating up the stock, which despite a good start to the year, is still down 48-percent in the last six month.

"Any CEO who doesn't want a higher stock price would have to be questioned," Smith quipped. "But yes, the stock is low compared to where it ought to be and compared to what we've done."

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