General Moly Announces Second Quarter Results
General Moly (NYSE Amex: GMO) (TSX: GMO) announced its unaudited
financial results for the second quarter ended June 30, 2010. Net loss
for the three month period ended June 30, 2010 was approximately $3.2
million ($0.04 per share), compared to a loss of $2.8 million ($0.04 per
share) for the year ago period. Net loss for the six month period ended
June 30, 2010 was approximately $6.0 million ($0.08 per share), compared
to a loss of $5.8 million ($0.08 per share) for the year ago period.
Consolidated cash balance at the end of the second quarter was
approximately $23 million compared to approximately $25 million at the
end of the first quarter and approximately $49 million at the end of
2009. During the second quarter, cash use of approximately $12 million
was the result of $9 million in development and milling equipment
deposit costs and approximately $3 million in General and Administrative
costs, offset by $10 million in proceeds from the first tranche of the
Hanlong Bridge Loan. The company anticipates receiving $40 million
before the end of the year from the closing of the first Tranche of
Hanlong equity financing.
The Company anticipates spending approximately $4 million on
previously-contracted long-lead milling equipment and associated freight
and tax payments through the rest of the year, in addition to ongoing
administrative costs of approximately $3 million per quarter. Financial
information is included at the end of this release.
FINANCING UPDATE
Hanlong and the Company continue to work toward achievement of Tranche 1
Conditions. The Company received overwhelming support from stockholders
at the Company′s Annual General Meeting and is continuing to progress
toward publication of the Draft EIS. Hanlong, along with support from
General Moly, is continuing work toward receiving the Chinese Government
approvals for the investment. On July 29, Hanlong received the third and
final signature required for Sichuan Provincial National Development and
Reform Commission (NDRC) approval and Hanlong has advanced the approval
to NDRC′s Beijing headquarters. Once the national NDRC approves the
transaction, Hanlong will pursue approvals from the Ministry of Commerce
and the State Administration for Foreign Exchange (SAFE).
Under the terms of the agreement, Hanlong is required to obtain
government approvals for the investment within three months of
stockholder approval, or August 13, 2010. Based on discussions with
Hanlong, it was determined that it is highly unlikely that all of the
Chinese Government approvals will be fully obtained by this deadline.
Therefore, on July 30, the Company executed an amendment to the Hanlong
agreement extending the deadline for obtaining government approvals by
two months to October 13, 2010. In consideration for the extension, the
amendment also extends the Company′s deadlines for publishing its Draft
Environmental Impact Statement (DEIS) and receiving its Record of
Decision (ROD) by two months, to February 28, 2011 and November 30,
2011, respectively, although the Company currently does not anticipate
utilizing the additional time permitted for the publication of the DEIS
or receipt of the ROD.
Bruce D. Hansen, Chief Executive Officer, said, 'Both Hanlong and
General Moly remain committed to our long-term significant relationship
and closing this transaction. We do not anticipate the delay in
receiving Chinese government approval to impact the overall Mt. Hope
project development timeline as permitting continues to be on the
critical path to Mt. Hope′s development.?
PERMITTING UPDATE
The Company′s hydrology studies were contingently approved by the Bureau
of Land Management (BLM) in late June and a formal letter from the BLM
accepting the studies as complete was received in late July. A
Preliminary Draft Environmental Impact Statement (PDEIS) is planned to
be completed and provided to Cooperating Agencies in the first half of
August. These Agencies will then have 25 business days to review and
provide comments on the PDEIS to the BLM, which will incorporate those
comments into a Draft EIS (DEIS). The Company currently expects the DEIS
to be published later this year. Following publication of the DEIS, the
public will be allowed to review and comment on the DEIS and a Final EIS
will be drafted prior to the issuance of the Record of Decision (ROD),
which the Company anticipates receiving by mid-2011.
In June 2010, the Company filed change applications with the State
Engineer′s office requesting permits to withdraw water at well locations
matching those incorporated in the Company′s final hydrology models now
approved by the BLM. These change applications are required by law to go
through a publication and protest period, which will close August 23,
2010. The State Engineer will then set a hearing date in the latter part
of this year. The Company remains confident that it will be granted
required water permits for the Mt. Hope project in sufficient time to
maintain the Company′s current project development timeline. The Company
is also continuing work with the Commissioners of Eureka County and the
growers in Diamond Valley to find a solution to their opposition of the
Company′s water applications. The Company's scientific studies continue
to indicate that Mt. Hope′s water pumping in Kobeh Valley will have
virtually no impact to water in Diamond Valley.
ENGINEERING AND EQUIPMENT PROCUREMENT UPDATE
The Company will restart engineering efforts, which had been paused in
March 2009 to conserve cash, following the publication of the Draft EIS.
Equipment procurement efforts, which had also been paused, will resume
later in the year or early next year. Although the Company has secured
orders for most of the long-lead milling equipment, firm orders for much
of the mobile mine fleet still must be placed.
MOLYBDENUM MARKET UPDATE
Over the second quarter of 2010, according to Platts Metals Week, spot
molybdenum prices peaked at $17.92 per pound in mid-April and traded
lower toward $15 per pound by the end of June. More recently, prices
have continued to trend lower and are currently approximately $14 per
pound. Reports from a variety of sources indicate that inventory levels
of the metal are low, but both consumers and intermediaries are
reluctant to purchase and rebuild inventories given the lack of
consensus around global economic growth levels.
China remains a net importer of moly through May, importing
approximately 6.25 million net pounds year-to-date. Low levels of raw
moly exports from China continue to force Korean and Japanese steel
producers to source moly from the West.
Additional information on the Company′s second quarter 2010 results will
be available in General Moly′s 2010 Form 10-Q, which will be filed with
the Securities and Exchange Commission and posted on the Company′s
website.
| GENERAL MOLY, INC. | ||||||||
| (A DEVELOPMENT STAGE COMPANY) | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (Unaudited - In thousands except per share amounts) | ||||||||
June 30, | December 31, 2009 | |||||||
| ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 22,895 | $ | 48,614 | ||||
Deposits, prepaid expenses and other current assets | 183 | 179 | ||||||
Total Current Assets | 23,078 | 48,793 | ||||||
Mining properties, land and water rights | 106,977 | 101,190 | ||||||
Deposits on project property, plant and equipment | 67,400 | 42,648 | ||||||
Restricted cash held for electricity transmission | 12,286 | 12,286 | ||||||
Restricted cash held for reclamation bonds | 1,133 | 1,133 | ||||||
Non-mining property and equipment, net | 452 | 553 | ||||||
Other assets | 2,994 | 2,994 | ||||||
| TOTAL ASSETS | $ | 214,320 | $ | 209,597 | ||||
| LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST AND EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable and accrued liabilities | $ | 2,952 | $ | 3,799 | ||||
Current portion of long term debt | 144 | 163 | ||||||
Total Current Liabilities | 3,096 | 3,962 | ||||||
Provision for post closure reclamation and remediation costs | 561 | 586 | ||||||
Deferred gain | 200 | 100 | ||||||
Long term debt, net of current portion | 10,239 | 268 | ||||||
Total Liabilities | 14,096 | 4,916 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
| 99,761 | 99,761 | ||||||
EQUITY | ||||||||
Common stock, $0.001 par value; 200,000,000 shares authorized, 72,567,538 and 72,437,538 shares issued and outstanding, respectively | 73 | 72 | ||||||
Additional paid-in capital | 188,878 | 187,290 | ||||||
Accumulated deficit before exploration stage | (213 | ) | (213 | ) | ||||
Accumulated deficit during exploration and development stage | (88,275 | ) | (82,229 | ) | ||||
Total Equity | 100,463 | 104,920 | ||||||
| TOTAL LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST AND EQUITY | $ | 214,320 | $ | 209,597 | ||||
| GENERAL MOLY, INC. | ||||||||||||||||||||
| (A DEVELOPMENT STAGE COMPANY) | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
| (Unaudited - In thousands, except per share amounts) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | January 1, 2002 | ||||||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||||||
REVENUES | $ | ? | $ | ? | $ | ? | $ | ? | $ | ? | ||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||
Exploration and evaluation | 53 | 166 | 180 | 364 | 37,690 | |||||||||||||||
General and
| 3,112 | 2,724 | 5,831 | 5,637 | 54,817 | |||||||||||||||
TOTAL OPERATING EXPENSES | 3,165 | 2,890 | 6,011 | 6,001 | 92,507 | |||||||||||||||
LOSS FROM OPERATIONS | (3,165 | ) | (2,890 | ) | (6,011 | ) | (6,001 | ) | (92,507 | ) | ||||||||||
OTHER INCOME | ||||||||||||||||||||
Interest and dividend income | 5 | ? | 6 | 8 | 3,969 | |||||||||||||||
Interest expense | (41 | ) | ? | (41 | ) | ? | (41 | ) | ||||||||||||
Other income | ? | ? | ? | ? | 65 | |||||||||||||||
TOTAL OTHER INCOME | (36 | ) | ? | (35 | ) | 8 | 3,993 | |||||||||||||
LOSS BEFORE TAXES | (3,201 | ) | (2,890 | ) | (6,046 | ) | (5,993 | ) | (88,514 | ) | ||||||||||
Income Taxes | ? | ? | ? | ? | ? | |||||||||||||||
NET LOSS | $ | (3,201 | ) | $ | (2,890 | ) | $ | (6,046 | ) | $ | (5,993 | ) | $ | (88,514 | ) | |||||
Less: Net loss attributable to contingently redeemable noncontrolling interest | ? | 136 | ? | 239 | 239 | |||||||||||||||
NET LOSS ATTRIBUTABLE TO GENERAL MOLY, INC. | $ | (3,201 | ) | $ | (2,754 | ) | $ | (6,046 | ) | $ | (5,754 | ) | $ | (88,275 | ) | |||||
Basic and diluted net loss attributable to General Moly per share of common stock | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.08 | ) | $ | (0.08 | ) | ||||||||
Weighted average number of shares outstanding ? basic and diluted | 72,568 | 72,104 | 72,557 | 72,034 | ||||||||||||||||
| GENERAL MOLY, INC. | ||||||||||||||||||
| (A DEVELOPMENT STAGE COMPANY) | ||||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||
| (Unaudited - In thousands) | ||||||||||||||||||
Six Months Ended | January 1, 2002 | |||||||||||||||||
June 30, | June 30,
| |||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||