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('MP') Is Working to Restore the Full Rare Earth Supply C Investment Profile About MP Materials Producer of rare earth elements in MP Materials’ (‘MP’) is working to restore the full rare earth supply concentrate Headquartered in Las Vegas, Nevada chain to the US. The company acquired the closed Mountain Pass mine Share price – 22 February 2021 US$40.92 in California in 2017. Mountain Pass is a high quality bastnaesite deposit Primary listing NYSE that was the leading source of rare earth minerals from 1952 until it was Fully diluted shares in issue 155.9m closed in the 1990s. Since the acquisition, MP has completed Stage 1 of Market Capitalization US$6.3bn 12-month low US$15.00 its business plan to recommission the mine. It now produces about 15% 12-month high US$46.84 of global supply of rare earth minerals in the form of concentrate. The Cash US$513m ~38,000t/yr of rare earth concentrate produced by MP is currently sold Debt US$6m to customers in China to be refined further. 1 Year Price Chart MP is now implementing a Stage 2 project that will see the company resume onsite processing of this rare earth oxide concentrate into NdPr oxide (Neodymium Praseodymium) from 2022 at an estimated capital cost of $170m. The company has been awarded $9.6m by the US Department of Defense to help optimize the Stage 2 projects’ processing of separated light rare earth elements. NdPr is the key ingredient in permanent magnets used in low carbon economy applications like electric vehicle motors and wind turbines. MP estimates an annual production rate of around 6,075t/yr of Board & management James Litinsky Chairman & CEO separated NdPr oxides (as part of ~20,000t/yr of total refined rare earth Michael Rosenthal COO oxides produced). Ryan Corbett CFO Sheila Bangalore CSO & Legal A potential Stage 3 project to “buy, build and/or JV” downstream and produce NdPr magnets themselves from 2025+ is being considered. Top Shareholders NdPr magnet demand is expected to more than double from 2020 to JHL Capital Group 2030i on the back of strong growth in electric vehicle production and QVT Financial James Litinsky investment in wind electricity generation – that has increased from just ii Fortress Acquisition Sponsor 6 billion kWh in 2000 to 300 billion kWh in 2019 . Alyeska Investment Group In November 2020, the company raised US$545m through a business Next Events combination with Fortress Value Acquisition Corp, a special purpose Q4 results announcement 18 March 2021 acquisition company, to fully fund this three-stage business plan. Stage 2 production commences by end-2022 MP prides itself its environmental sustainability and has invested to reduce the impact of its operations through action like its dry-stacked Peer Group tailing operations and near closed-loop milling and beneficiation Lynas Rare Element Resources processes that reduce freshwater requirements. Texas Mineral Resources Ucore Rare Earth Analyst View Analyst MP Materials is the only large-scale US resource of rare earth elements. Greg Maud +1 (303) 358-2566 The company is capitalizing on its unique position to develop as an integrated domestic rare earths producer and is well placed to secure a strong position in this growing market. Independent Investment Research 1 Strengths ! MP has a strong balance sheet with US$513m in cash and only $6m in debtiii. The company is cash flow positive todayiv and believes that it can fund all current projects through to final investment decision and into construction without needing to raise additional capital. ! The company is uniquely positioned with few competing non-Chinese rare earth element producers – and none at the same scale. The Mountain Pass resource is high grade (327,000 short tons of proven reserves at >8% ore grade) and has an expected life-of-mine of 24 years. The ore body also has relatively low levels of radioactive thorium and uranium contaminants. ! MP’s integrated site offers cost and efficiency benefits. Mountain Pass is the only producer globally with mining and processing operations co-located on the same site. ! The company has scaled up production to be able to achieve benefits of scale and lower unit costs. ! Some $1.7bn was sunk into the Mountain Pass’ development since 2010 - mostly by previous owners. This is a significant barrier to entry for potential new entrants. Weaknesses ! While the leadership team at MP has impressive credentials, in particular in investments and financial services, there is a lack of mining and operations experience. The team’s ability to develop and operate assets such as Mountain Pass is relatively unproven. ! Molycorp, the company that operated Mountain Pass from 2008 until it filed for Chapter 11 bankruptcy in June 2015, invested significantly to build a new ore processing plant believing that it could be competitive with Chinese producersv. Ultimately that technology did not live up to expectations which contributed significantly to Molycorp’s downfall. While MP is investing to modify that processing plant, the processing technology remains unproven at a commercial scale. Opportunities ! MP is delivering into a growing market, which expected to grow strongly on the back of increasing demand in electric vehicles, wind turbines and mobile devices. ! The company is moving downstream as part of their Stage 2 project to produce separated rare earth products, including NdPr oxide, cerium and lanthanum from 2022. MP is also considering a later (2025 or beyond) Stage 3 project that could see the company start to produce NdPr magnets. Moving downstream will allow MP to capture a larger portion of the value chain, reduce input cost volatility and enhance stability of margin. ! Being able to offer a fully domestic source of rare earth oxides, and ultimately magnets themselves, will position the company well to serve the domestic US market that has grown increasingly wary of China as the single source of supply. ! Sustainability is increasingly becoming a competitive differentiator. MP has invested to ensure that their mining and processing operations operate to high standard of sustainability, including: o Closed-loop flotation process that allows the company to recycle 95% of water used o Single-site integrated operation enabling safe disposal of mineral byproducts at point of origin o Low-impact dry-stacked tailings ! The US government’s strategy to ensure safe and reliable supplies of critical minerals has resulted in the Department of Defense announcing contract and agreements with several rare-earth element producers, including MPvi. The company signed a $9.6m Technology Investment Agreement with the Department of Defense to support its Stage 2 capabilities and is likely to receive ongoing support as the US government seeks to reduce reliance on imported critical minerals. Independent Investment Research 2 Threats ! Mountain Pass has a checkered history. After decades of being the leading supplier of rare earth elements globally, production the operation closed in 2002 on the back of increased competition from Chinese suppliers. The operation was recapitalized, and mining operations started again in 2012 under Molycorp Minerals – only to file for Chapter 11 bankruptcy three years later. MP’s leadership team has its work cut out to ensure that Mountain Pass’ operations can be competitive against established Chinese producers. ! Under the current Stage 1 operations, the company produces rare earth concentrate that is sent to China to be processed further. Until such time as the processing operations in Stage 2 are commissioned, MP will be reliant on these companies to refine their product as well as being exposed to national trade policies. Until May 2020 China charged an import tariff (up to 25%) on imported rare earth elements. China has since dropped this tariff, but the company will remain exposed to this risk until its downstream processing facilities are operational. With its dominant position in processed rare earth minerals, China has the potential to be able to restrict exports (as it did to Japan in 2010) and manipulate prices. 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