General Moly Announces Third Quarter 2012 Results
General
Moly, Inc. (the 'Company') (NYSE MKT and TSX: GMO), a U.S.-based
molybdenum mineral development, exploration and mining company,
announced its unaudited financial results for the third quarter ended
September 30, 2012. Net loss for the three months ended September 30,
2012 was $2.1 million ($0.02 per share), compared to a loss of $2.4
million ($0.03 per share) for the year ago period. Net loss for the nine
months ended September 30, 2012 was $8.0 million ($0.09 per share),
compared to a loss of $11.9 million ($0.13 per share) for the year ago
period.
The Company′s cash balance at September 30, 2012 was $22.4 million
compared to $28.2 million at June 30, 2012. During the third quarter,
cash use of $5.8 million was the result of $3.3 million in Mt. Hope
Project development, engineering and procurement costs and $2.5 million
in General and Administrative expenses.
Bruce D. Hansen, Chief Executive Officer of General Moly, said, 'The
Company is close to entering its next stage of development, pivoting
aggressively from a successful permitting and financing process which is
rapidly concluding, to the construction and development of the
world-class Mt. Hope Project. We are prudently investing in the
necessary people, processes and equipment as we pursue our goal of
becoming the largest pure play primary molybdenum producer in the world.'
MT. HOPE PROJECT PERMITTING UPDATE
As announced on October 12, 2012, the Mt. Hope Final Environmental
Impact Statement ('EIS?) Notice of Availability was published in the
Federal Register. The public review period for the Final EIS ends on
November 13, 2012. Following the close of this period, we anticipate the
BLM to issue a Record of Decision ('ROD?) allowing the Company to
initiate construction activities. The Company continues to anticipate
the ROD to be issued by the end of 2012.
In addition to the ROD, three Nevada state-issued permits are viewed as
major environmental permits. These are the Air Quality Permit, Water
Pollution Control Permit, and the Reclamation Permit. The Air Quality
Permit was received on May 30, 2012. The State of Nevada Division of
Environmental Protection (NDEP) published Notices of Proposed Action on
October 1, 2012 stating their tentative decision to issue a Water
Pollution Control Permit and a Reclamation Permit for the Mt. Hope
Project. Following the 30-day public review and comment period, the
hearing for both permits took place on October 30, 2012. The Company
anticipates receiving the Water Pollution Control Permit and Reclamation
Permit in the same timeframe as the issuance of the ROD.
MT. HOPE PROJECT FINANCING UPDATE
When final permits are received, POS-Minerals Corporation (a 20% owner
of the Mt. Hope Project) pursuant to the terms of the LLC agreement for
the development and operation of the Mt. Hope Project is anticipated to
fund its final $56 million initial contribution, plus 20% of all costs
the Company has spent on the Mt. Hope Project to date. The Company
estimates this combined payment will be approximately $100 million.
Thereafter, the Mt. Hope Project will be funded 80% by the Company and
20% by POS-Minerals Corporation.
As previously announced, the Company and Hanlong (USA) Mining
('Hanlong?) on October 26, 2012, signed a Subordinated Loan Agreement
('Sub Debt Facility?) under which Hanlong agreed to provide, with a six
month option to arrange a third-party credit facility, up to $125
million to assist the Company in financing capital cost increases. The
Sub Debt Facility supplements a previously announced $665 million
Chinese sourced Term Loan that is being negotiated with China
Development Bank ('CDB?). The Company had previously announced a letter
of intent related to this facility with Hanlong on August 1, 2012. Under
the Sub Debt Facility, Hanlong will lend in two tranches. Tranche A in
the amount of $75 million will be available to the Company during the
Mt. Hope Project′s construction period. Tranche B, in the amount of $50
million, will be available during the six-month period following the
commencement of commercial production. Tranche A of the Sub Debt
Facility can be reduced to the extent equipment is leased for the Mt.
Hope Project by the Eureka Moly, LLC. Both tranches of the Sub Debt
Facility will mature 5 years after the achievement of commercial
production at the Mt. Hope Project and will have mandatory payments of
50% of the Company′s semi-annual net free cash flow after debt service
payments on the CDB term loan and any other Mt. Hope Project funding
requirements. The Sub Debt Facility will be subordinated to the CDB term
loan, with covenants to follow the Term Loan, and will bear interest at
6-month LIBOR plus 4%, with interest paid semi-annually.
MT. HOPE PROJECT ENGINEERING AND EQUIPMENT PROCUREMENT UPDATE
Engineering efforts, which were paused in March 2009, were restarted
earlier this year by M3 Engineering & Technology following the
publication of the Draft EIS. The Company has now ordered or purchased
most of the long-lead milling equipment, haul trucks, mine production
drills, and has entered into a non-firm agreement for the purchase of
electric shovels. While equipment procurement has restarted, firm orders
for some loading equipment and other process equipment must still be
placed.
MOLYBDENUM MARKET UPDATE
During 2012, molybdenum prices traded in a relatively narrow dollar
range between $10.83 and $14.95 per pound, according to Ryan′s Notes,
a ferro-alloy industry news and pricing publication. Prices are
currently trading at $10.90 per pound.
Additional information on the Company′s third quarter 2012 results will
be available in General Moly′s 2012 Form 10-Q, which will be filed with
the Securities and Exchange Commission and posted on the Company′s
website.
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GENERAL MOLY, INC. | ||||||||
(A DEVELOPMENT STAGE COMPANY) | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands except per share amounts) | ||||||||
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? | September 30, | ? | December 31, | |||||
| ASSETS: | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 22,353 | $ | 40,709 | ||||
Deposits, prepaid expenses and other current assets | 102 | 105 | ||||||
Total Current Assets | 22,455 | 40,814 | ||||||
Mining properties, land and water rights ? Note 4 | 161,054 | 143,732 | ||||||
Deposits on project property, plant and equipment | 67,434 | 66,474 | ||||||
Restricted cash held for electricity transmission | 12,010 | 12,005 | ||||||
Restricted cash held for reclamation bonds | 1,133 | 1,133 | ||||||
Non-mining property and equipment, net | 653 | 819 | ||||||
Capitalized debt issuance costs | 5,462 | 3,136 | ||||||
Other assets | 2,994 | 2,994 | ||||||
TOTAL ASSETS | $ | 273,195 | $ | 271,107 | ||||
| LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST AND EQUITY: | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable and accrued liabilities | $ | 4,815 | $ | 4,568 | ||||
Accrued advance royalties | 8,950 | 8,950 | ||||||
Accrued payments to Agricultural Sustainability Trust and Hanlong | 4,000 | 2,000 | ||||||
Current portion of long term debt | 10,733 | 10,596 | ||||||
Total Current Liabilities | 28,498 | 26,114 | ||||||
Provision for post closure reclamation and remediation costs | 631 | 587 | ||||||
Deferred gain | 1,450 | 1,150 | ||||||
Accrued advance royalties | 5,200 | ? | ||||||
Accrued payments to Agricultural Sustainability Trust | 2,000 | 2,000 | ||||||
Long term debt, net of current portion | 76 | 131 | ||||||
Total Liabilities | 37,855 | 29,982 | ||||||
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COMMITMENTS AND CONTINGENCIES ? Note 10 | ? | ? | ||||||
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CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST | 98,073 | 98,073 | ||||||
? | ||||||||
EQUITY | ||||||||
| 91 | 91 | ||||||
Additional paid-in capital | 258,069 | 255,894 | ||||||
Accumulated deficit before exploration stage | (213 | ) | (213 | ) | ||||
Accumulated deficit during exploration and development stage | (120,680 | ) | (112,720 | ) | ||||
Total Equity | 137,267 | 143,052 | ||||||
| TOTAL LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST AND EQUITY | $ | 273,195 | $ | 271,107 | ||||
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GENERAL MOLY, INC. | ||||||||||||||||||||
(A DEVELOPMENT STAGE COMPANY) | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||||||||||||||
(Unaudited - In thousands, except per share amounts) | ||||||||||||||||||||
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? | Three Months Ended | ? | Nine Months Ended | ? | January 1, 2002 | |||||||||||||||
September 30, | ? | September 30, | September 30, | ? | September 30, | Stage) to | ||||||||||||||
? | ||||||||||||||||||||
REVENUES | $ | ? | $ | ? | $ | ? | $ | ? | $ | ? | ||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||
Exploration and evaluation | 255 | 793 | 582 | 1,249 | 40,283 | |||||||||||||||
Write downs of development and deposits | ? | ? | ? | 3,403 | 8,819 | |||||||||||||||
General and administrative expenses | 1,808 | 1,526 | 7,187 | 7,754 | 76,962 | |||||||||||||||
TOTAL OPERATING EXPENSES | 2,063 | 2,319 | 7,769 | 12,406 | 126,064 | |||||||||||||||
LOSS FROM OPERATIONS | (2,063 | ) | (2,319 | ) | (7,769 | ) | (12,406 | ) | (126,064 | ) | ||||||||||
OTHER INCOME / (EXPENSE) | ||||||||||||||||||||
Interest and dividend income | ? | ? | ? | 19 |
| |||||||||||||||
Interest expense | (63 | ) | (61 | ) | (191 | ) | (187 | ) | (605 | ) | ||||||||||
TOTAL OTHER (EXPENSE) / INCOME, NET | (63 | ) | (61 | ) | (191 | ) | (168 | ) | 3,457 | |||||||||||
LOSS BEFORE INCOME TAXES | (2,126 | ) | (2,380 | ) | (7,960 | ) | (12,574 | ) | (122,607 | ) | ||||||||||
Income Taxes | ? | ? | ? | ? | ? | |||||||||||||||
CONSOLIDATED NET LOSS | $ | (2,126 | ) | $ | (2,380 | ) | $ | (7,960 | ) | $ | (12,574 | ) | $ | (122,607 | ) | |||||
| ? | ? | ? | 680 | 1,927 | |||||||||||||||
| $ | (2,126 | ) | $ | (2,380 | ) | $ | (7,960 | ) | $ | (11,894 | ) | $ | (120,680 | ) | |||||
| $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.09 | ) | $ | (0.13 | ) | ||||||||
Weighted average number of shares outstanding ? basic and diluted | 91,238 | 90,778 | 91,212 | 90,518 | ||||||||||||||||
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COMPREHENSIVE LOSS | $ | (2,126 | ) | $ | (2,380 | ) | $ | (7,960 | ) | $ | (11,894 | ) | $ | (120,680 | ) | |||||
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GENERAL MOLY, INC. | ||||||||||||
(A DEVELOPMENT STAGE COMPANY) | ||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| ||||||||||||
? | Nine Months Ended | ? | January 1, 2002 | |||||||||
September 30, | ? | September 30, | September 30, | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net Loss | $ | (7,960 | ) | $ | (12,574 | ) | $ | (122,607 | ) | |||
Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||||||
Depreciation and amortization | 212 | 306 | 1,856 | |||||||||
Interest expense | 191 | 187 | 605 | |||||||||
Equity compensation for employees and directors | 1,172 | 1,556 | 17,984 | |||||||||
Decrease (Increase) in deposits, prepaid expenses and other assets | 3 | (313 | ) | (10 | ) | |||||||
Increase (Decrease) in accounts payable and accrued liabilities | 103 | (2,703 | ) | (7,200 | ) | |||||||
Increase (Decrease) in post closure reclamation and remediation costs | 44 | (9 | ) | 422 | ||||||||
(Increase) in restricted cash held for electricity transmission | (5 | ) | ? | (12,010 | ) | |||||||
Write downs of development and deposits | ? | 3,403 | 8,819 | |||||||||
Services and expenses paid with common stock | ? | ? | 1,990 | |||||||||
Repricing of warrants | ? | ? | 965 | |||||||||
Net cash used by operating activities | (6,240 | ) | (10,147 | ) | (109,186 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Purchase and development of mining properties, land and water rights | (11,742 | ) | (7,297 | ) | (132,564 | ) | ||||||
Deposits (Refunds) on property, plant and equipment | (816 | ) | 177 | (68,723 | ) | |||||||
Proceeds from option to purchase agreements | 300 | 585 | 1,450 | |||||||||
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 | (12,258 | ) | (6,535 | ) | (200,370 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Proceeds from issuance of stock, net of issuance costs | 577 | 19,415 | 228,296 | |||||||||
Net (decrease) increase in leased assets | (109 | ) | (149 | ) | 23 | |||||||
Payments for debt issuance costs | (326 | ) | (1,795 | ) | (3,462 | ) | ||||||
Proceeds from debt | ? | ? | 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 | 142 | 17,471 | 331,863 | |||||||||
Net increase (decrease) in cash and cash equivalents | (18,356 | ) | 789 | 22,307 | ||||||||
Cash and cash equivalents, beginning of period | 40,709 | 53,571 | 46 | |||||||||
Cash and cash equivalents, end of period | $ | 22,353 | $ | 54,360 | $ | 22,353 | ||||||
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||||||
Equity compensation capitalized as development | $ | 426 | $ | 165 | $ | 6,884 | ||||||
Accrued portion of advance royalties | 5,200 | ? | 14,150 | |||||||||
Accrued portion of capitalized debt issuance costs | 2,000 | ? | 2,000 | |||||||||
Restricted cash held for reclamation bond acquired in an acquisition | ? | ? | 491 | |||||||||
Post closure reclamation and remediation costs and accounts payable assumed in an acquisition | ? | ? | 263 | |||||||||
Common stock and warrants issued for property and equipment | ? | ? | 1,586 | |||||||||
Accrued portion of payments to the Agricultural Sustainability Trust | ? | ? | 4,000 | |||||||||
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General Moly is a U.S.-based molybdenum mineral development, exploration
and mining company listed on the NYSE MKT (formerly the NYSE AMEX) 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 pure play primary molybdenum producer in the world. 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. The bank financing and subordinated
loans are subject to final negotiation and satisfaction of conditions
precedent. 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:
Scott Kozak, 303-928-8591
skozak@generalmoly.com
or
Media:
Zach
Spencer, 775-748-6059
zspencer@generalmoly.com
or
info@generalmoly.com
http://www.generalmoly.com