A machine and method of operation are disclosed for continuously molding solid pellets from a mud composition. In a specific application, the machine is useful for producing an oxidation catalyst in pellet form. The machine includes a rotatable disk having small openings therein, which provide mold cavities. As the disk is rotated, the mud composition is injected into the mold openings through an injection head, which rides against the front face of the disk. The mud is retained in each mold opening by a backing plate, which rides against the back face of the disk. Ambient air is passed through a heater located at the top of a housing which partially encloses the disk. The heated air is circulated downwardly on both sides of the disk to dry the mud in the mold openings. An ejection head is positioned such that it rides against the front face of the rotating disk at a point behind the injection head. Pressurized air is forced through air passages in the ejection head, which register with the mold openings. The air ejects the dried pellets, and they fall into a collection chute on the back side of the disk.