General Moly Announces Second Quarter 2011 Results
General Moly, Inc. (the 'Company') (NYSE Amex and TSX: GMO) announced
its unaudited financial results for the second quarter ended June 30,
2011. Net loss for the three months ended June 30, 2011 was
approximately $5.4 million ($0.06 per share), compared to a loss of $3.2
million ($0.04 per share) for the year ago period. Net loss for the six
months ended June 30, 2011 was approximately $9.5 million ($0.10 per
share), compared to a loss of $6.0 million ($0.08 per share) for the
year ago period.
Our cash balance at the end of the second quarter was approximately $59
million compared to approximately $54 million at the end of 2010. During
the second quarter, cash use of approximately $5 million was the result
of approximately $2.1 million in development, engineering, and equipment
deposit costs, approximately $2 million in General and Administrative
costs, and approximately $0.9 million in debt issuance costs related to
procurement of the Hanlong-sourced Chinese Bank Loan. Additionally, at
June 30, 2011, the Company took a $3.4 million non-cash write down
representing approximately 50% of a long-term deposit on mining
equipment with the passage of a June 30, 2011 deadline for a firm
purchase order. During the remainder of 2011, spending levels will
largely be tied to progress toward receipt of the Mt. Hope project's
permits, not including a $9 million advanced royalty payment due in the
fourth quarter of 2011 under the Company's Mt. Hope lease.
Financial information is included at the end of this release.
MT. HOPE PROJECT FINANCING UPDATE
When final permits are received, POS-Minerals Corporation (a 20% owner
of the Mt. Hope project) is anticipated to fund its final $56 million
initial contribution, plus 20% of all the funds the Company has spent on
the Mt. Hope project at that point. The Company estimates this combined
payment will be approximately $100 million. From that point forward, the
project will be funded 80% by the Company and 20% by POS-Minerals
Corporation.
Also, within nine months after the Mt. Hope project′s permits are
received, pursuant to the amended Securities Purchase Agreement between
the Company and Hanlong (USA) Mining Investment, Inc. ('Hanlong?),
Hanlong is obligated to procure a drawable loan from a Chinese bank of
not less than $665 million. Despite the increased timing and flexibility
provided to Hanlong, both parties remain committed to the availability
of a drawable loan as expeditiously as possible following receipt of Mt.
Hope′s permits and continue to work toward a two or three month
availability timeframe.
During the quarter, the Company completed work with a Chinese
engineering firm to reformat and translate its Bankable Feasibility
Study for the Chinese banks at a cost of approximately $0.9 million.
Work is now focused on drafting and negotiating a specific term sheet
for the Mt. Hope debt facility. When the bank loan is in place and
required permits are received, the Company intends to close on Hanlong′s
Tranche 2 equity sale for $40 million, bringing Hanlong′s share position
in the Company to 25% on a fully-diluted basis.
MT. HOPE PROJECT PERMITTING UPDATE
The Bureau of Land Management ('BLM?) and its independent Environmental
Impact Statement ('EIS?) contractor are continuing work to complete the
Draft Environmental Impact Statement ('DEIS?) by incorporating and
responding to comments received on May 6, 2011 from the second draft of
the Mt. Hope project′s Preliminary DEIS. The DEIS is currently
anticipated to be completed in the third quarter and published in the
Federal Register in the third or fourth quarter. Following publication
of the DEIS, full permits are anticipated within six to nine months.
MT. HOPE PROJECT WATER RIGHTS UPDATE
On July 15, 2011, the Nevada State Engineer issued ruling 6127 granting
the Company′s water right applications for the use of 11,300 acre-feet
annually of water for mining purposes, which will facilitate the pumping
of water necessary for the Mt. Hope project′s planned operations. The
specific permits are anticipated to be issued following payment of
statutory fees, and, following the State Engineer′s approval of a
Monitoring, Management, and Mitigation Plan (3M Plan), prepared in
cooperation with Eureka County, the water will be available for
consumptive use.
The Company continues to hold discussions with area stakeholders,
including Eureka County, to cooperatively develop a long-term 3M Plan.
Participation, transparency and input of area stakeholders is a major
goal of the 3M Plan. On July 28, 2011, Eureka County issued a press
release announcing that it is considering appealing the State Engineer′s
decision on water rights for the Mt. Hope project. The deadline to
appeal is August 15, 2011.
MT. HOPE PROJECT ENGINEERING AND EQUIPMENT PROCUREMENT UPDATE
The Company will restart engineering and procurement efforts following
the publication of the DEIS. Although the Company has purchased and
ordered most of the long-lead milling equipment, firm orders for much of
the mobile mine fleet and other process equipment must still be placed.
The Company had remitted $6.8 million against a contract to purchase two
electric shovels in 2008. The Company took a non-cash write down of $3.4
million with the passage of the first order deadline of June 30, 2011.
The Company continues discussions concerning applying previous payments
to future orders, including the remaining $3.4 million tied to an order
deadline of June 30, 2012.
LIBERTY PROJECT UPDATE
During the second quarter, the Company announced the results of 33 core
holes that were not previously included in the Liberty project 2008
pre-feasibility study. These core holes are being incorporated into a
revised resource estimate, which is anticipated to be released in the
third quarter of 2011. The revised resource estimate will form the basis
for an updated pre-feasibility study that is anticipated to be completed
early next year.
The Company is also initiating discussions with a variety of parties
regarding investment and off-take opportunities with respect to the
Liberty project.
MOLYBDENUM MARKET UPDATE
During the second quarter of 2011, molybdenum prices traded slightly
lower and finished the quarter at $14.90 per pound, compared to $16.40
per pound at the end of last year, according to Ryan′s Notes, an
industry publication. Since the end of the second quarter, prices have
continued to decline and are currently at approximately $14.70 per
pound. The Company believes that current price declines are primarily
related to seasonal steel production trends and that molybdenum demand
and prices will strengthen later in the year.
Additional information on the Company′s second quarter 2011 results will
be available in General Moly′s 2011 Form 10-Q, which will be filed with
the Securities and Exchange Commission and posted on the Company′s
website.
GENERAL MOLY, INC. | ||||||||
June 30, | December 31, | |||||||
| ASSETS: | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 59,267 | $ | 53,571 | ||||
Deposits, prepaid expenses and other current assets | 660 | 148 | ||||||
Total Current Assets | 59,927 | 53,719 | ||||||
Mining properties, land and water rights | 137,882 | 133,093 | ||||||
Deposits on project property, plant and equipment | 64,783 | 68,363 | ||||||
Restricted cash held for electricity transmission | 12,005 | 12,005 | ||||||
Restricted cash held for reclamation bonds | 1,133 | 1,133 | ||||||
Non-mining property and equipment, net | 914 | 1,045 | ||||||
Debt issuance costs | 2,197 | 887 | ||||||
Other assets | 2,994 | 2,994 | ||||||
TOTAL ASSETS | $ | 281,835 | $ | 273,239 | ||||
LIABILITIES, CONTINGENTLY REDEEMABLE | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable and accrued liabilities | $ | 2,071 | $ | 4,138 | ||||
Accrued advance royalties | 8,950 | 9,500 | ||||||
Current portion of long term debt | 10,484 | 194 | ||||||
Total Current Liabilities | 21,505 | 13,832 | ||||||
Provision for post closure reclamation and remediation costs | 559 | 571 | ||||||
Deferred gain | 800 | 215 | ||||||
Accrued advance royalties | 8,950 | 8,950 | ||||||
Accrued payments to Agricultural Sustainability Trust | 4,000 | 4,000 | ||||||
Long term debt, net of current portion | 218 | 10,481 | ||||||
Total Liabilities | 36,032 | 38,049 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
| 98,073 | 98,753 | ||||||
EQUITY | ||||||||
| 91 | 85 | ||||||
Additional paid-in capital | 255,318 | 234,517 | ||||||
Accumulated deficit before exploration stage | (213 | ) | (213 | ) | ||||
Accumulated deficit during exploration and development stage | (107,466 | ) | (97,952 | ) | ||||
Total Equity | 147,730 | 136,437 | ||||||
TOTAL LIABILITIES, CONTINGENTLY REDEEMABLE | $ | 281,835 | $ | 273,239 | ||||
GENERAL MOLY, INC. | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | January 1, 2002 | ||||||||||||||||||
June 30, | June 30, |
June 30, |
June 30, | |||||||||||||||||
REVENUES | $ | ? | $ | ? | $ | ? | $ | ? | $ | ? | ||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||
Exploration and evaluation | 288 | 180 | 456 | 308 | 38,589 | |||||||||||||||
Write downs of development and deposits | 3,403 | ? | 3,403 | ? | 8,819 | |||||||||||||||
General and administrative expenses | 2,291 | 2,985 | 6,228 | 5,703 | 65,755 | |||||||||||||||
TOTAL OPERATING EXPENSES | 5,982 | 3,165 | 10,087 | 6,011 | 113,163 | |||||||||||||||
LOSS FROM OPERATIONS | (5,982 | ) | (3,165 | ) | (10,087 | ) | (6,011 | ) | (113,163 | ) | ||||||||||
OTHER INCOME / (EXPENSE) | ||||||||||||||||||||
Interest and dividend income | 8 | 5 | 19 | 6 | 4,060 | |||||||||||||||
Interest expense | (66 | ) | (41 | ) | (126 | ) | (41 | ) | (290 | ) | ||||||||||
TOTAL OTHER (EXPENSE) / INCOME , NET | (58 | ) | (36 | ) | (107 | ) | (35 | ) | 3,770 | |||||||||||
LOSS BEFORE INCOME TAXES | (6,040 | ) | (3,201 | ) | (10,194 | ) | (6,046 | ) | (109,393 | ) | ||||||||||
Income Taxes | ? | ? | ? | ? | ? | |||||||||||||||
CONSOLIDATED NET LOSS | $ | (6,040 | ) | $ | (3,201 | ) | $ | (10,194 | ) | $ | (6,046 | ) | $ | (109,393 | ) | |||||
| 680 | ? |
|
| 1,927 | |||||||||||||||
NET LOSS ATTRIBUTABLE TO GENERAL MOLY, INC. | $ | (5,360 | ) | $ | (3,201 | ) |
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| $ | (107,466 | ) | |||||
| $ | (0.06 | ) | $ | (0.04 | ) |
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| $ | |||||||
| 90,750 | 72,568 | 90,749 |
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GENERAL MOLY, INC. | |||||||||||||
Six Months Ended | January 1, 2002 | ||||||||||||
June 30, | June 30, | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||
Net Loss | $ | (10,194 | ) | $ | (6,046 | ) | $ | (109,393 | ) | ||||
Adjustments to reconcile net loss to net cash used by operating activities: | |||||||||||||
Depreciation and amortization | 198 | 184 | 1,430 | ||||||||||
Interest expense | 126 | 41 | 290 | ||||||||||
Equity compensation for employees and directors | 1,282 | 604 | 16,381 | ||||||||||
(Increase) in deposits, prepaid expenses and other | (291 | ) | (4 | ) | (347 | ) | |||||||
(Decrease) increase in accounts payable and accrued liabilities | (2,655 | ) | (975 | ) | 803 | ||||||||
(Decrease) increase in post closure reclamation and remediation costs | (12 | ) | (25 | ) | 350 | ||||||||
Write downs of development and deposits | 3,403 | ? | 8,819 | ||||||||||
Services and expenses paid with common stock | ? | ? | 1,990 | ||||||||||
Repricing of warrants | ? | 585 | 965 | ||||||||||
(Increase) in restricted cash held for electricity transmission | ? | ? | (12,005 | ) | |||||||||
Net cash used by operating activities | (8,143 | ) | (5,636 | ) | (90,717 | ) | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||
Payments for the purchase of equipment | ? | ? | (1,548 | ) | |||||||||
Purchase and development of mining properties, land and water rights | (4,743 | ) | (5,819 | ) | (113,450 | ) | |||||||
Deposits on property, plant and equipment | (6 | ) | (24,331 | ) | (68,090 | ) | |||||||
Proceeds from option to purchase agreements | 585 | 100 | 800 | ||||||||||
Purchase of securities | ? | ? | (137 | ) | |||||||||
Increase in restricted cash held for reclamation bonds | ? | ? | (642 | ) | |||||||||
Cash provided by sale of marketable securities | ? | ? | 246 | ||||||||||
Net cash used by investing activities | (4,164 | ) | (30,050 | ) | (182,821 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||
Proceeds from issuance of stock, net of issuance costs | 19,412 | 56 | 227,719 | ||||||||||
Net (decrease) increase in leased assets | (99 | ) | (89 | ) | 231 | ||||||||
Payments for debt issuance costs | (1,310 | ) | ? | (2,197 | ) | ||||||||
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 | ) | |||||||||
Net cash provided by financing activities | 18,003 | 9,967 | 332,759 | ||||||||||
Net increase (decrease) in cash and cash equivalents | 5,696 | (25,719 | ) | 59,221 | |||||||||
Cash and cash equivalents, beginning of period | 53,571 | 48,614 | 46 | ||||||||||
Cash and cash equivalents, end of period | $ | 59,267 | $ | 22,895 | $ | 59,267 | |||||||
NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||||||||||||
Equity compensation capitalized as development | $ | 112 | $ | 472 | $ | 6,312 | |||||||
Restricted cash held for reclamation bond acquired in an acquisition | ? | 491 | |||||||||||
| ? | ? | 263 | ||||||||||
Common stock and warrants issued for property and equipment | ? | ? | 1,586 | ||||||||||
Accrued portion of deposits on property, plant and equipment | 183 | ? | 183 | ||||||||||
Accrued portion of advance royalties | ? | ? | 17,900 | ||||||||||
Accrued portion of payments to the Agricultural Sustainability Trust | ? | ? | 4,000 | ||||||||||
General Moly is a U.S.-based molybdenum mineral development, exploration
and mining company listed on the NYSE Amex (formerly the American Stock
Exchange) and the Toronto Stock Exchange under the symbol GMO. Our
primary asset, our interest in the Mt. Hope project located in central
Nevada, is considered one of the world's largest and highest grade
molybdenum deposits. Combined with our second molybdenum property, the
Liberty project that is also located in central Nevada, our goal is to
become the largest primary molybdenum producer by the middle of the
decade. For more information on the Company, please visit our website at http://www.generalmoly.com.
Forward-Looking Statements
Statements herein that are not historical facts are 'forward-looking
statements? within the meaning of Section 27A of the Securities Act, as
amended and Section 21E of the Securities Exchange Act of 1934, as
amended and are intended to be covered by the safe harbor created by
such sections. Such forward-looking statements involve a number of risks
and uncertainties that could cause actual results to differ materially
from those projected, anticipated, expected, or implied by the Company.
These risks and uncertainties include, but are not limited to, metals
price and production volatility, global economic conditions, currency
fluctuations, increased production costs and variances in ore grade or
recovery rates from those assumed in mining plans, exploration risks and
results, political, operational and project development risks, including
the Company′s ability to obtain required permits to commence production
and its ability to raise required financing, adverse governmental
regulation and judicial outcomes. The closing of the Hanlong transaction
and obtaining bank financing are subject to a number of conditions
precedent that may not be fulfilled. For a detailed discussion of risks
and other factors that may impact these forward looking statements,
please refer to the Risk Factors and other discussion contained in the
Company′s quarterly and annual periodic reports on Forms 10-Q and 10-K,
on file with the SEC. The Company undertakes no obligation to update
forward-looking statements.
General Moly
Investors and Business Development
Seth
Foreman, 303-928-8591
sforeman@generalmoly.com
or
Media
Zach
Spencer, 775-748-6059
zspencer@generalmoly.com
http://www.generalmoly.com
info@generalmoly.com