NEO MATERIAL TECHNOLOGIES INC.
NEM-TSX :  $7.91 – STRONG BUY
12 MONTH TARGET PRICE : $14.25 | PROJECTED RETURN: 80.2%

Nick Agostino, MBA, CFA, P.ENG

Q2/11 RESULTS – A SWEET BEAT

• Record sales of US$216.1M were above our street high estimate of US$180.2M driven by strong RE demand at the Performance Materials division and robust ASPs. Consensus sales was US$143.8M.
• Adjusted EPS of US$0.48 beat our above street estimate of US$0.33 on better than expected EBIT margins at Performance Materials division. Consensus was EPS of US$0.25.  
• For Q3 we expect Performance Materials division ASPs to remain very healthy, volumes to exhibit typical seasonality, and margins to soften slightly on rising input costs. At Magnequench, the unit should benefit from rising ASPs, a mix shift in volumes, and expanding margins.
• Recommend investors BUY at current levels as shares are cheap trading at 6.5x forward EPS versus historical average of ~10x.
  

NEM Q2 - A Sweet Beat - click here to view complete comment (PDF)

• August 16th amd 17th - Alastair Neill, rare earth and strategic metals specialist, available for meetings in Toronto
     
For more information please contact your sales representative.

Europe curbs short-selling as credit markets swoon
PARIS/MADRID, Aug 12 (Reuters)- A ban on short-selling financial stocks in four European countries including France takes effect on Friday, a coordinated attempt to restore confidence in a market hit by rumours and higher borrowing costs.

France, Italy, Spain and Belgium imposed the ban, which will vary in detail depending on the country, the European Securities and Markets Authority (EMSA) said in a statement late on Thursday.
http://www.reuters.com/article/2011/08/12/europe-banks-idUSLDE77A05U20110812

Asian Shares Pare Gains
Asian stock markets ended mostly higher but pared their early gains Friday, as investors remained cautious amid this week's turmoil in markets, while losses for auto makers and computer-chip producers sent Tokyo and Seoul into the red.

apan's Nikkei Stock Average finished down 0.2% at 8963.72, despite trading 1% higher in the early minutes of the session, while South Korea's Kospi dropped 1.3% to 1793.31.

Among the region's winners, Hong Kong's Hang Seng Index ended with a 0.1% gain at 19620.01, well off its highs of the day, while the Shanghai Composite Index advanced 0.5% to 2593.17, and Australia's S&P/ASX 200 index climbed 0.8% to 4172.60.
http://online.wsj.com/article/SB10001424053111903918104576503071377641558.html?mod=dist_smartbrief

Molycorp Reports Second Quarter 2011 Results
GREENWOOD VILLAGE, Colo., Aug 11, 2011 (BUSINESS WIRE) -- --Company reaches profitability with record net sales of $99.6 million in Q2 2011

• Q2 2011 sales volume of rare earth oxide (REO) equivalent rose 58% over Q1 2011 and 314% year-over-year, including rare earth alloy sales.
• The Company's average realized sales price in Q2 2011 rose 91% to $72.10 per kilogram of REO equivalent from $37.73 per kilogram in Q1 2011.
• The Company's average realized sales price in Q2 for rare metals (niobium and tantalum) was $167.50 per kilogram.
• Q2 Gross Margin of approximately 57%
• EPS of $0.52 per fully diluted share
• Successfully renegotiated its current major lanthanum supply contract to allow for higher realized sales prices.
• Awarded an EPC contract for construction of a chlor-alkali plant, a major component of the Company's $781 million Project Phoenix expansion and modernization project

http://www.marketwatch.com/story/molycorp-reports-second-quarter-2011-results-2011-08-11?reflink=MW_news_stmp