General Moly Announces First Quarter 2013 Results

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General Moly Announces First Quarter 2013 Results

LAKEWOOD, Colo.--(BUSINESS WIRE)-- 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 first quarter ended March 31, 2013. Net loss for the three months ended March 31, 2013 was $3.0 million ($0.03 per share), compared to a loss of $3.2 million ($0.03 per share) for the year ago period.

Excluding restricted cash, the Company's cash balance at March 31, 2013 was approximately $57 million compared to $68 million at December 31, 2012. During the first quarter, cash use of $16 million was the result of Mt. Hope Project development, engineering, and procurement costs as well as general and administrative expenses partially offset by the receipt of $5 million in contribution payments from POS-Minerals Corporation. In December, the Company and POS-Minerals, as members of Eureka Moly, LLC ("EMLLC"), agreed to hold $36 million of the approximately $100 million received from POS-Minerals' December 2012 contributions in a reserve account to maintain additional liquidity until the Company arranges full project financing.


In a previous project financing update, the Company reported that on March 20, 2013, the Company was notified that China Development Bank had provided instructions to its legal counsel to suspend work on the $665 million Term Loan. This suspension relates to reports that Mr. Liu Han, Chairman of Sichuan Hanlong Group has been detained by Chinese authorities. The Company is continuing efforts with Hanlong (USA) Mining ("Hanlong") to secure another strategic partner to help advance the full financing of the Mt. Hope Project.

Bruce D. Hansen, Chief Executive Officer of General Moly, said "The Company made substantial progress with regards to our preliminary construction activities at Mt. Hope during the first quarter including early well field development, clearing and grubbing of terrain and cultural clearance."

Mr. Hansen added, "We are working with Hanlong to secure another Chinese strategic partner to help advance the full financing of the Mt. Hope Project and reinvigorate advanced stage loan negotiations with China Development Bank. Our efforts to secure such a strategic partner are enhanced, given that we are advancing a fully permitted, construction-ready, high grade / lower cost molybdenum deposit along with our EMLLC partner POS-Minerals."

Mr. Hansen concluded, "As we continue our efforts towards full financing at Mt. Hope, the Company will continue to prudently manage our unrestricted cash position of $57 million at the end of the first quarter with an additional $36 million in restricted cash."

MT. HOPE PROJECT CONSTRUCTION UPDATE

Early construction activities progressed as planned at the Mt. Hope Project site including cultural clearance, clearing and grubbing, wood harvesting, and the development of early construction water. Kautz Environmental Consultants completed field mitigation activities for all 29 cultural sites identified in the Phase I Cultural Mitigation of the initial construction program. Official releases from the Bureau of Land Management ("BLM") and the State Historical Preservation Office have been obtained for all 29 cultural sites and the Company has advanced into Phase II Cultural Mitigation activities. Ames Construction has cleared and grubbed approximately 1,800 acres in preparation for starting major earthworks. The mine, process plant, and tailings dam areas and associated roads have been substantially cleared. Ames Construction also has completed four miles of water pipeline (approximately 50% of total planned) to supply construction water from the permitted well field to the plant site.

MT. HOPE PROJECT WATER RIGHTS AND PERMIT APPEALS UPDATE

The Nevada State Engineer ("State Engineer") completed issuance of all water permits for the Mt. Hope Project in January 2012, and the water became available for use following the State Engineer's approval of the Company's Monitoring, Management and Mitigation Plan ("3M Plan") in June 2012, subject to a subsequent appeal of the 3M Plan to the Nevada State District Court ("District Court"). Following oral argument on April 15, 2013, the District Court denied the appeal petition favorably upholding the State Engineer's approval of the 3M Plan. The District Court's written Order is pending.

The water permits arising from the State Engineer's July 2011 Ruling were appealed to the Nevada Supreme Court by Eureka County and two parties of water rights holders in Diamond and Kobeh Valley, following the District Court's June 2012 denial of an appeal petition, affirming the State Engineer's Ruling. Briefing has recently been completed in the Supreme Court. Presently, the Supreme Court has not issued a ruling or set a hearing date for the appeal. Notwithstanding, the water remains available to the Company for use at the Mt. Hope Project.

In February 2013, Great Basin Resource Watch and the Western Shoshone Defense Project filed a Complaint, and a Motion for Preliminary Injunction, against the U.S. Department of Interior and BLM in the U.S. District Court in Nevada, seeking relief under the National Environmental Protection Act and other federal laws challenging issuance of the Record of Decision ("ROD") for the Mt. Hope Project. EMLLC has filed to intervene and its opposition to the Motion for a Preliminary Injunction. Presently the Court has not ruled or set a hearing date set for the motion. The process for issuing the ROD involved an exhaustive environmental analysis and review that lasted more than 6 years, and included extensive public and cooperating agency input. The Company supports the very robust and legally and technically defensible work completed by the BLM and believes that the ROD complies with all federal statutes and rules.

MT. HOPE PROJECT ENGINEERING AND EQUIPMENT PROCUREMENT UPDATE

Engineering efforts, which were paused in March 2009, were restarted in 2012 by M3 Engineering & Technology. Currently, engineering is approximately 64% complete at the Mt. Hope Project. Through March 31, 2013, EMLLC has made deposits of $71.0 million on equipment orders and has paid $12.0 million into an escrow arrangement for electricity transmission services.

EMLLC has now ordered or purchased most of the long-lead milling equipment, haul trucks, mine production drills and entered into a letter of intent for the purchase of electric shovels.

EMLLC is planning firm orders for other mining and process equipment pending timing of full financing.

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. In the first quarter of 2013, molybdenum prices traded between $10.75 and $11.95 per pound, and are currently trading at $11.15 per pound.

Additional information on the Company's first quarter 2013 results will be available in General Moly's 2013 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
(In thousands, except par value amounts)

 

March 31,
2013
(Unaudited)

December 31,
2012

ASSETS:
CURRENT ASSETS
Cash and cash equivalents$56,882$68,331
Deposits, prepaid expenses and other current assets1,170 136 
Total Current Assets58,052 68,467 
Mining properties, land and water rights — Note 4190,165170,967
Deposits on project property, plant and equipment70,96769,691
Restricted cash held at EMLLC36,00036,000
Restricted cash held for electricity transmission12,01512,013
Restricted cash held for reclamation bonds6,9916,991
Non-mining property and equipment, net746605
Capitalized debt issuance costs18,08717,794
Other assets2,994 2,994 
TOTAL ASSETS$396,017 $385,522 

LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST AND EQUITY:

CURRENT LIABILITIES
Accounts payable and accrued liabilities$16,326$10,133
Accrued advance royalties500500
Accrued payments to Agricultural Sustainability Trust and Hanlong4,0004,000
Current portion of long term debt11,014 10,906 
Total Current Liabilities31,840 25,539 
Provision for post closure reclamation and remediation costs1,751627
Deferred gain1,0001,100
Accrued advance royalties5,2004,700
Accrued payments to Agricultural Sustainability Trust2,0002,000
Long term debt, net of current portion741661
Other accrued liabilities875 875 
Total Liabilities43,407 35,502 
 
COMMITMENTS AND CONTINGENCIES — Note 11  
CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST206,336 201,880 
 
EQUITY

Common stock, $0.001 par value; 200,000,000 shares authorized, 91,545,084 and 91,333,092
   shares issued and outstanding, respectively

9291
Additional paid-in capital272,035270,902
Accumulated deficit before exploration stage(213)(213)
Accumulated deficit during exploration and development stage(125,640)(122,640)
Total Equity146,274 148,140 

TOTAL LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST AND EQUITY

$396,017 $385,522 
 

GENERAL MOLY, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited - In thousands, except per share amounts)

   
January 1, 2002
Three Months Ended(Inception of

March 31,
2013

 

March 31,
2012

Exploration Stage)
to March 31, 2013

 
REVENUES$$$
OPERATING EXPENSES:
Exploration and evaluation11716840,596
Write downs of development and deposits8,819
General and administrative expense2,522 2,925 82,897 
TOTAL OPERATING EXPENSES2,639 3,093 132,312 
LOSS FROM OPERATIONS(2,639)(3,093)(132,312)
OTHER INCOME / (EXPENSE)
Interest and dividend income4,068
Interest expense(461)(64)(1,423)
Realized gain from sale of mining properties100  2,100 
TOTAL OTHER INCOME / (EXPENSE), NET(361)(64)4,745 
LOSS BEFORE INCOME TAXES(3,000)(3,157)(127,567)
Income Taxes   
CONSOLIDATED NET LOSS$(3,000)$(3,157)$(127,567)
Less: Net loss attributable to contingently redeemable noncontrolling interest  1,927 
NET LOSS ATTRIBUTABLE TO GENERAL MOLY, INC.$(3,000)$(3,157)$(125,640)
Basic and diluted net loss attributable to General Moly per share of common stock$(0.03)$(0.03)
Weighted average number of shares outstanding — basic and diluted91,52991,175
 
COMPREHENSIVE LOSS$(3,000)$(3,157)$(125,640)
 

GENERAL MOLY, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited - In thousands)

   

January 1, 2002
(Inception of

Three Months Ended

Exploration
Stage) to

March 31,
2013
 March 31,
2012

March 31,
2013

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss$(3,000)$(3,157)$(127,567)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization971072,051
Interest expense461641,423
Equity compensation for employees and directors84881019,074
(Increase) in deposits, prepaid expenses and other(1,034)(4)(1,078)
(Decrease) increase in accounts payable and accrued liabilities(1,846)18(12,718)
Increase (decrease) in post closure reclamation and remediation costs1,124(4)1,542
Services and expenses paid with common stock1,990
Repricing of warrants965
Write downs of development and deposits8,819
Recognition of income related to option to purchase agreement(100)(2,100)
(Increase) in restricted cash held for electricity transmission(2) (12,015)
Net cash used by operating activities(3,452)(2,166)(119,614)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase and development of mining properties, land and water rights(11,374)(3,330)(152,958)
Deposits on property, plant and equipment(1,067)(630)(71,132)
Proceeds from option to purchase agreement3,100
Purchase of securities(137)
(Increase) in Restricted Cash - Eureka Moly(36,000)
(Increase) in restricted cash held for reclamation bonds(6,500)
Cash provided by sale of marketable securities  246 
Net cash used by investing activities(12,441)(3,960)(263,381)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of stock, net of issuance costs49558228,351
Net increase (decrease) in leased assets130(38)120
Decrease (increase) in capitalized debt issuance costs(191)(3,909)
Proceeds from debt10,000
Cash proceeds from POS-Minerals Corporation4,456208,263
Cash paid to POS-Minerals Corporation for purchase price adjustment  (2,994)
Net cash provided by financing activities4,444  Read Full Story

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