Molycorp to Acquire Leading Rare Earth Processor Neo Material Technologies in $1.3 Billion Deal

Transaction Will Create Global, Vertically Integrated Rare Earth Technology Leader and Will Give Molycorp a Greater Range of Products and Increased Sales Opportunities Across Asia

TRANSACTION HIGHLIGHTS

• The transaction will combine Molycorp's world-class rare earth resource and low-cost production from its Project Phoenix with Neo's proven leadership in the development, processing, and distribution of technically advanced rare earth products.
  
  
• The transaction will give Molycorp greater exposure to the world's largest and fastest-growing rare earth consuming nation - China - which now comprises about 70% of global rare earth consumption.
  
  
• The transaction leverages Neo Materials' existing infrastructure to allow Molycorp to ramp up its overall production once Project Phoenix Phase 2 production begins in 2013.
  
  
• The transaction expands Molycorp's production capabilities to include Neo Materials' Magnequench patented magnet powder portfolio used to produce neodymium-iron-boron (NdFeB) bonded rare earth magnets.
  
  
• The transaction expands Molycorp's strategic rare metals portfolio to include gallium, rhenium, and indium, which are used in advanced electronics, photovoltaic, aerospace, catalytic converters, and lighting industries.
  
  
• The combination is expected to be accretive to Molycorp's 2012 earnings and cash flow.  Significant identified synergies are expected to further strengthen Molycorp's financial performance beyond 2012.

GREENWOOD VILLAGE, CO & TORONTO, ON, March 8, 2012 /CNW/ - Molycorp, Inc. (NYSE:MCP) ("Molycorp") and Neo Material Technologies Inc. (TSX:NEM) ("Neo Materials" or "Neo") today announced the signing of a definitive agreement under which Molycorp will acquire Neo Materials for approximately CDN $1.3 billion.  This will create one of the most technologically advanced, vertically integrated rare earth companies in the world.

"This transaction will link two unique companies - one with a world-class, high-quality resource, and the other with world-class rare earth product design and processing capabilities," said Mark A. Smith, Molycorp's President and Chief Executive Officer.  "Neo Materials is recognized throughout the industry for its exceptionally high-quality production and processing capabilities, its patented technology platform, and its ability to consistently meet demanding customer specifications.  With this combination, Molycorp will be in a unique position to enhance our time to market and provide new global customer segments with rare earth metals, oxides, and alloy powders that are unmatched today.  We see significant opportunities for growth as well as powerful synergies through this transaction."

Transaction Terms

Under the agreement, which was unanimously approved by the two companies' boards of directors, Neo Materials shareholders will receive consideration equal to CDN$11.30 per share, comprising of CDN$8.05 per share in cash and 0.122 Molycorp shares based on Molycorp's 20-day volume weighted average price of US$26.66. Neo Materials shareholders will have the right to elect their preferred consideration mix of cash and newly issued Molycorp common stock, with the total consideration being approximately 71.2 percent cash and approximately 28.8 percent Molycorp common stock.  The CDN$11.30 per share represents a premium of approximately 42 percent to Neo Materials' closing share price of CDN$7.97 on March 8, 2012.

A summary of the details of the transaction can be downloaded here.  The transaction will be implemented through a court-approved Plan of Arrangement under Canadian law and is subject to the approval of Neo Materials shareholders, relevant regulatory approvals, and other customary closing conditions.  The transaction is expected to close in the second or third quarter of 2012.

Molycorp intends to finance the majority of the cash portion of the consideration and has obtained a committed financing facility from Morgan Stanley and Credit Suisse.  Permanent financing is expected to include long-term debt, existing cash on hand of the combined company, and the proceeds from any equity issuances.  Funds allocated to Project Phoenix Phase 1 and Phase 2 will not be used for this transaction.

The Combination of Molycorp and Neo Materials

The combination of Molycorp and Neo Materials will expand Molycorp's geographic footprint across 11 countries and provide leading product development, research, and sales capabilities. Additionally, Molycorp will gain cutting-edge technologies and will leverage Neo Materials' years of processing experience and knowledge, to better service the Company's customer base as well as new customer segments. This transaction brings to Molycorp Neo's direct operating and sales channels in China, the world's largest and fastest growing rare earth consuming nation.  In 2010 and 2011, Neo Materials' sales to China and Japan, collectively, accounted for approximately 68 percent and 64 percent of sales, respectively.

The combination will expand Molycorp's technology portfolio to include production of magnetic powders, and rare metals including gallium, indium and rhenium, as well as zirconium oxide.  This will enable Molycorp to produce and market materials that are integral to a wide variety of strategic technologies, including advanced electronics, thin film photovoltaics, LEDs, flat screens, super alloys, catalytic converters, mobile and smart phones, magnets, batteries.  The addition of Neo Materials' expertise also will provide entry for Molycorp into customer segments requiring value added, rare earth and rare metal production capabilities - up to 99.99999% purity for some elements.

"The industrial logic of this combination is highly compelling," said Constantine Karayannopoulos, President and Chief Executive Officer, Neo Materials.  "We will be vertically integrating the world's best rare earth resource outside of China with the world's best rare earth processing technology company.  The new enterprise will have the broadest global coverage in the industry, as well as a strategic position in high-value magnetic materials and rare and other strategic metals.  We look forward to this transaction and believe our employees, partners, shareholders, and customers around the world will benefit greatly as a result."

Smith added, "The combination of our businesses enhances our Mine-to-Magnets vision and places Molycorp in all steps of the vertical rare earth supply chain, reaching many new consumer segments across the globe.  It also allows us to reach new and highly specialized niche segments that require value added, specialty products, given Neo Materials' downstream high value added materials for rare earth applications - a key differentiator and rationale behind this transaction.  We continue to place a high value on the expertise, dedication, and commitment to excellence that Neo Materials' people will bring to our company, and I look forward to a rapid and seamless integration of our organizations."

"The Board of Directors and I believe the growth and profit potential of this combination will be immediately accretive to Molycorp's earnings and will position the Company for strong returns for the future," Smith concluded.

Additional background information on Neo Materials can be seen in the "Corporate and Investor Info/Presentations" section of Neo Materials' website, located here.

Conference Call With Molycorp and Neo Materials Leaders at 8:30 a.m. Eastern Friday, March 9

Molycorp and Neo Materials will conduct a conference call tomorrow morning to discuss this announcement at 8:30 a.m. EST, hosted by Mark Smith, Chief Executive Officer, Molycorp, Inc. and Constantine Karayannopoulos, Chief Executive Officer, Neo Materials.  Investors interested in participating in the live call from the U.S. and Canada should dial [phone] and reference passcode number 58842419. Those calling from outside the U.S. and Canada should dial [phone] and use the same confirmation number.  A telephone replay will be available approximately two hours after the call concludes through March 16, 2012 by dialing [phone] from the U.S. and Canada, or [phone] from international locations, and entering passcode: 54274285.

There will also be a simultaneous live audio webcast available on the Investor Relations section of Molycorp's website at http://www.molycorp.com/investors. The webcast will be archived on the website for 90 days.

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For More Information:

Molycorp Contacts:

Jim Sims, [phone]

Vice President, Corporate Communications

[email protected]

Brian Blackman, [phone]

Senior Manager, Investor Relations

[email protected]

Neo Materials Contacts:

Ali Mahdavi, [phone] ext. 225

Investor Relations

[email protected]

About Molycorp, Inc.

With offices in the U.S., Europe, and Japan, Molycorp, Inc. is the only U.S-based company that is fully integrated across the rare earth mine-to-magnets supply chain.  In addition to its current production of rare earth oxides at its flagship rare earth mine and processing facility at Mountain Pass, California, the Company produces rare earth metals, rare earth alloys (such as neodymium-iron-boron and samarium-cobalt alloys) and rare metals such as niobium and tantalum. The rare earths and rare metals Molycorp produces are critical inputs in existing and emerging applications including: clean energy technologies, such as hybrid and electric vehicles and wind power turbines; multiple high-tech uses, including fiber optics, lasers and hard disk drives; numerous defense applications, such as guidance and control systems and global positioning systems; advanced water treatment technology for use in industrial, military and outdoor recreation applications; and other technologies. For more information please visit www.molycorp.com.

About Neo Materials

Neo Material Technologies Inc. is a producer, processor and developer of neodymium-iron-boron magnetic powders, rare earths and zirconium based engineered materials and applications, and other rare metals and their compounds through its Magnequench and Performance Materials business divisions. These innovative products are essential in many of today's high technology products. Magnequench's Neo powders are used to produce bonded magnets, generally used in micro motors, precision motors, sensors and other applications requiring high levels of magnetic strength, flexibility, small size and reduced weight. Rare earth and zirconium applications include catalytic converters, computers, television display panels, optical lenses, mobile phones and electronic chips. The Company's rare metals products are primarily used in the wireless, LED, flat panel, turbine, solar and catalyst industries. The Company is headquartered in Toronto, Canada.

No Offer or Solicitation

This press release is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.

Advisors on the Transaction

Morgan Stanley & Co. LLC acted as financial advisors to Molycorp, and Jones Day and McCarthy Tétrault LLP served as Molycorp's legal counsel. Morgan Stanley & Co. LLC and Cutfield Freeman and Co. acted as strategic advisors to Molycorp in this transaction.  GMP Securities L.P. served as Neo Materials' financial advisor, and Fogler, Rubinoff LLP and McDonald Hopkins LLC acted as Neo Materials' legal counsel and Stikeman Elliott LLP acted as legal counsel to the special committee of the Board of Directors of Neo Materials.

Molycorp Safe Harbor Statement

This release contains forward-looking statements that represent Molycorp's beliefs, projections and predictions about future events or Molycorp's future performance.  In particular, certain statements in this release regarding the proposed acquisition of Neo Materials, including those relating to the definitive arrangement agreement, the closing of the proposed acquisition of Neo Materials and receipt of necessary approvals, the expected consequences of the proposed acquisition of Neo Materials and estimates regarding future results and financing plans, are forward-looking statements.  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 time required to consummate the proposed acquisition; the satisfaction or waiver of conditions in the arrangement agreement; any material adverse changes in the affairs of Neo Materials; the ability to obtain required shareholder, regulatory, court or other third-party approvals and consents and otherwise consummate the proposed acquisition; Molycorp's ability to achieve the strategic and other objectives related to the proposed acquisition, including any expected synergies;  Molycorp's ability to successfully integrate Neo Materials and achieve the expected results of the acquisition, including, without limitation, the acquisition being accretive; Molycorp's ability to successfully obtain permanent financing to replace the bridge financing in connection with the acquisition; Molycorp's ability to secure additional capital to implement its business plans; Molycorp's ability to complete its  initial modernization and expansion efforts, including the accelerated start-up of the Mountain Pass facility, which management refers to as Project Phoenix Phase 1, and the second phase capacity expansion plan, which management refer to as Project Phoenix Phase 2, and reach full planned production rates for REOs and other planned downstream products, in each case within the projected timeframe; the final costs of the Project Phoenix Phase 1, including with accelerated start-up of the Mountain Pass facility, and Project Phoenix Phase 2, which may differ from estimated costs; uncertainties associated with Molycorp's reserve estimates and non-reserve deposit information; uncertainties regarding global supply and demand for rare earths materials; Molycorp's ability to reach definitive agreements for a joint venture to manufacture neodymium-iron-boron permanent rare earth magnets; 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. Any forward-looking statement contained in this press release or the Annual Report on Form 10-K 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.

Neo Materials Safe Harbor Statement

This release contains forward-looking statements that represent Neo Material Technologies' beliefs, projections and predictions about future events or Neo Material Technologies' future performance.  In particular, certain statements in this release regarding the proposed acquisition of Neo Material Technologies by Molycorp., including those relating to the definitive arrangement agreement, the closing of the proposed acquisition and receipt of necessary approvals, the expected consequences of the proposed acquisition and estimates regarding future results and financing plans, are forward-looking statements.  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 Neo Material Technologies' 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 time required to consummate the proposed acquisition; the satisfaction or waiver of conditions in the arrangement agreement; any material adverse changes in the affairs of Neo Material Technologies or Molycorp.; the ability to obtain required shareholder, regulatory, court or other third-party approvals and consents and otherwise consummate the proposed acquisition; the ability to achieve the strategic and other objectives related to the proposed acquisition;  the ability to successfully integrate Neo Material Technologies and Molycorp. and achieve the expected results of the acquisition; Neo Material Technologies' ability to continue to successfully implement its business plans; and Molycorp's ability to successfully implement its business plans preceding and following the proposed acquisition including those items specifically referenced in this press release.

For more information regarding these and other risks and uncertainties that Neo Material Technologies may face, see the section entitled "Risk Factors" of Neo Material Technologies' Annual Information Form for the year ended December 31, 2010 and the section of Neo Material Technologies' Management's Discussion and Analysis entitled "Financial Risk Management" for the quarterly period ended September 30, 2011 and for the year ended December 31, 2010. Any forward-looking statement contained in this press release reflects Neo Material Technologies' current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to Neo Material Technologies' 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. Neo Material Technologies 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.