General Moly Announces Third Quarter Results
General Moly (NYSE Amex: GMO) (TSX: GMO) announced its unaudited
financial results for the third quarter ended September 30, 2010. Net
loss for the three month period ended September 30, 2010 was
approximately $6.3 million ($0.09 per share), compared to a loss of $2.4
million ($0.03 per share) for the year ago period. Net loss for the nine
month period ended September 30, 2010 was approximately $12.4 million
($0.17 per share), compared to a loss of $8.1 million ($0.11 per share)
for the year ago period. Net loss for the third quarter was impacted by
the previously-announced $5 million ($4 million attributable to General
Moly) write down associated with the release of the Eureka Canyon
Subdivision Lease.
Consolidated cash balance at the end of the third quarter was
approximately $17 million compared to approximately $23 million at the
end of the second quarter and approximately $49 million at the end of
2009. During the third quarter, cash use of approximately $6 million was
the result of $4 million in development and milling equipment deposit
costs and approximately $2 million in General and Administrative costs.
The Company anticipates receiving $40 million from the closing of
Tranche 1 of the Hanlong equity financing on December 20, 2010, as
announced in a separate release on October 26, 2010.
The Company anticipates spending approximately $2 million on previously
contracted long-lead milling equipment and associated freight and tax
payments in the fourth quarter, in addition to ongoing administrative
costs of approximately $3 million. Financial information is included at
the end of this release.
FINANCING UPDATE
As announced on October 8, Hanlong received formal approval for the
equity investment from the Chinese National Development and Reform
Commission. On October 12, Hanlong received the Certificate of Overseas
Investment as approval from the Chinese Ministry of Commerce and has
filed that Certificate with the State Administration of Foreign
Exchange, thus substantially satisfying Hanlong′s Tranche 1 investment
conditions. As previously announced, Hanlong will close its purchase of
the first $40 million equity tranche in General Moly, representing a
12.5% fully diluted stake and approximately 12 million shares, on
December 20, 2010.
PERMITTING UPDATE
The Preliminary Draft Environmental Impact Statement (PDEIS) was
completed and provided to Cooperating Agencies on August 18, 2010. These
Agencies, in addition to the Company and the Environmental Protection
Agency, provided comments on the PDEIS to the Bureau of Land Management
(BLM) on September 23, 2010. The BLM and its independent EIS contractor
are currently in the process of reviewing and incorporating the comments
into a Draft EIS (DEIS). Once the DEIS is complete, the BLM will advance
the DEIS through the Notice of Availability process, which is the
procedural step to publishing the document in the Federal Register. The
Company continues to expect the DEIS to be published later this year,
but the time requirement for the BLM to assess comments and to revise
the PDEIS, which the Company does not control, could push DEIS
publication into early-2011. Following publication of the DEIS, the
general public will review and comment on the DEIS and these comments
will be considered by the BLM in preparing a Final EIS prior to the
issuance of the Record of Decision, which the Company continues to
anticipate receiving in 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 went through a
publication and protest period, which ended August 23, 2010. The State
Engineer has set a hearing date for December 6, 2010, where protests to
the Company′s water applications will be heard. Following the hearing,
the State Engineer will issue a ruling with respect to the Company′s
water applications. The Company remains confident that the State
Engineer will rule favorably, and it will be granted required water
permits for the Mt. Hope Project in sufficient time to maintain the
Company′s current project development timeline.
Following the creation of the Agricultural Sustainability Trust and the
Eureka Producer′s Cooperative′s withdrawal of all protests and appeals
with respect to the Company′s water applications, the Company has
focused on working with the Commissioners of Eureka County to find a
solution to the County′s 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 and other process equipment must still be
placed.
MOLYBDENUM MARKET UPDATE
Over the third quarter of 2010, according to Platts Metals Week, spot
molybdenum prices peaked at $16.03 per pound at the beginning of
September after trading up from a low of $13.88 per pound in mid-July.
The market ended the third quarter with a price of $15.35. Price
weakness in July was attributed to seasonal summer slowdown due to the
European holiday season while higher prices later in the quarter were
attributed to a resumption of normal market activities after the summer
slowdown. At present, the market seems relatively balanced with prices
hovering around the $15 per pound level.
China remains a net importer of molybdenum through August, importing
approximately 5.5 million net pounds year-to-date. Low levels of raw
exports from China continue to force Korean and Japanese steel producers
to source molybdenum from the West.
Additional information on the Company′s third 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) | ||||||||
September 30, | December 31, 2009 | |||||||
| ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 17,275 | $ | 48,614 | ||||
Deposits, prepaid expenses and other current assets | 72 | 179 | ||||||
| 17,347 | 48,793 | ||||||
Mining properties, land and water rights | 107,279 | 101,190 | ||||||
Deposits on project property, plant and equipment | 67,553 | 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 | 401 | 553 | ||||||
Other assets | 2,994 | 2,994 | ||||||
| TOTAL ASSETS | $ | 208,993 | $ | 209,597 | ||||
LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable and accrued liabilities | $ | 4,475 | $ | 3,799 | ||||
Current portion of long term debt | 139 | 163 | ||||||
Total Current Liabilities | 4,614 | 3,962 | ||||||
Provision for post closure reclamation and remediation costs | 561 | 586 | ||||||
Deferred gain | 200 | 100 | ||||||
Long term debt, net of current portion | 10,267 | 268 | ||||||
Total Liabilities | 15,642 | 4,916 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
| 98,754 | 99,761 | ||||||
EQUITY | ||||||||
| 73 | 72 | ||||||
Additional paid-in capital | 189,332 | 187,290 | ||||||
Accumulated deficit before exploration stage | (213 | ) | (213 | ) | ||||
Accumulated deficit during exploration and development stage | (94,595 | ) | (82,229 | ) | ||||
Total Equity | 94,597 | 104,920 | ||||||
TOTAL LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING | $ | 208,993 | $ | 209,597 | ||||
GENERAL MOLY, INC. (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited - In thousands, except per share amounts) | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | January 1, 2002 | |||||||||||||||||||
September 30, 2010 | September 30, 2009 | September 30, 2010 | September 30, 2009 | ||||||||||||||||||
REVENUES | $ | ? | $ | ? | $ | ? | $ | ? | $ | ? | |||||||||||
OPERATING EXPENSES: | |||||||||||||||||||||
Exploration and evaluation | 191 | 273 | 499 | 638 | 38,009 | ||||||||||||||||
| 5,038 | 378 | 5,038 | 378 | 5,416 | ||||||||||||||||
| 2,037 | 1,705 | 7,741 | 7,341 |
| 56,349 | |||||||||||||||
| 7,266 | 2,356 | 13,278 | 8,357 | 99,774 | ||||||||||||||||
LOSS FROM OPERATIONS | (7,266 | ) | (2,356 | ) | (13,278 | ) | (8,357 | ) | (99,774 | ) | |||||||||||
| |||||||||||||||||||||
Interest and dividend income | 3 | 6 | 9 | 15 | 3,972 | ||||||||||||||||
| (63 | ) | ? | (104 | ) | ? | (104 | ) | |||||||||||||
Other income | ? | ? | ? | ? | 65 | ||||||||||||||||
| (60 | ) | 6 | (95 | ) | 15 | 3,933 | ||||||||||||||
LOSS BEFORE TAXES | (7,326 | ) | (2,350 | ) | (13,373 | ) | (8,342 | ) | (95,841 | ) | |||||||||||
| ? | ? | ? | ? | ? | ||||||||||||||||
NET LOSS | $ | (7,326 | ) | $ | (2,350 | ) | $ | (13,373 | ) | $ | (8,342 | ) | $ | (95,841 | ) | ||||||
| 1,007 | ? | 1,007 | 239 | 1,246 | ||||||||||||||||
| $ | (6,319 | ) | $ | (2,350 | ) | $ | (12,366 | ) | $ | (8,103 | ) | $ | (94,595 | ) | ||||||
Basic and diluted net loss attributable to General Moly per share of common stock | $ | (0.09 | ) | $ | (0.03 | ) | $ | (0.17 | ) | $ | (0.11 | ) | |||||||||
Weighted average number of shares outstanding ? basic and diluted | 72,571 | 72,393 | 72,562 | 72,154 | |||||||||||||||||
GENERAL MOLY, INC. (Unaudited - In thousands) | |||||||||||
Nine Months Ended | January 1, 2002 | ||||||||||
September 30, | September 30, 2009 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net Loss | $ | (13,373 | ) | $ | (8,342 | ) | $ | (95,841 | ) | ||
Adjustments to reconcile net loss to net cash used by operating activities: | |||||||||||
Services and expenses paid with common stock | ? | ? | 1,990 | ||||||||
Repricing of warrants | 585 | ? | 585 | ||||||||
Writedowns of development and deposits | 5,038 | 378 | 5,416 | ||||||||
Depreciation and amortization | 273 | 259 | 1,170 | ||||||||
Interest expense | 104 | ? | 104 | ||||||||
Equity compensation for employees and directors | 940 | 1,330 | 14,398 | ||||||||
Decrease in deposits, prepaid expenses and other | 107 | 112 | 20 | ||||||||
Decrease in restricted cash held for electricity transmission | ? | 259 | (12,286 | ) | |||||||
Increase (decrease) in accounts payable and accrued liabilities | 424 | (1,027 | ) | 3,789 | |||||||
(Decrease) increase in post closure reclamation and remediation costs | (25 | ) | (145 | ) | 352 | ||||||
Net cash used by operating activities | (5,927 | ) | (7,176 | ) | (80,303 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Payments for the purchase of equipment | ? | (7 | ) | (1,424 | ) | ||||||
Purchase of securities | ? | ? | (137 | ) | |||||||
Purchase and development of mining properties, land and water rights | (10,534 | ) | (17,520 | ) | (105,167 | ) | |||||
Deposits on property, plant and equipment | (24,905 | ) | (9,093 | ) | (67,931 | ) | |||||
Proceeds from option to purchase agreement | 100 | 100 | 200 | ||||||||
Increase in restricted cash held for reclamation bonds | ? | ? | (642 | ) | |||||||
Cash provided by sale of marketable securities | ? | ? | 246 | ||||||||
Net cash used by investing activities | (35,339 | ) | (26,520 | ) | (174,855 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Proceeds from issuance of stock, net of issuance costs | 56 | 99 | 165,260 | ||||||||
Proceeds from debt | 10,000 | ? | 10,000 | ||||||||
Cash proceeds from POS-Minerals Corporation | ? | ? | 100,000 | ||||||||
Cash paid to POS-Minerals Corporation for purchase price adjustment | ? | ? | (2,994 | ) | |||||||
Decrease in restricted cash ? Eureka Moly, LLC | ? | 13,878 | ? | ||||||||
Net (decrease) increase in leased assets | (129 | ) | (97 | ) | 121 | ||||||
Net cash provided by financing activities | 9,927 | 13,880 | 272,387 | ||||||||
Net (decrease) increase in cash and cash equivalents | (31,339 | ) | (19,816 | ) | 17,229 | ||||||
Cash and cash equivalents, beginning of period | 48,614 | 78,462 | 46 | ||||||||
Cash and cash equivalents, end of period | $ | 17,275 | $ | 58,646 | |||||||