General Moly Announces First Quarter 2013 Results

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 assets

1,170

136

Total Current Assets

58,052

68,467

Mining properties, land and water rights — Note 4

190,165

170,967

Deposits on project property, plant and equipment

70,967

69,691

Restricted cash held at EMLLC

36,000

36,000

Restricted cash held for electricity transmission

12,015

12,013

Restricted cash held for reclamation bonds

6,991

6,991

Non-mining property and equipment, net

746

605

Capitalized debt issuance costs

18,087

17,794

Other assets

2,994

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 royalties

500

500

Accrued payments to Agricultural Sustainability Trust and Hanlong

4,000

4,000

Current portion of long term debt

11,014

10,906

Total Current Liabilities

31,840

25,539

Provision for post closure reclamation and remediation costs

1,751

627

Deferred gain

1,000

1,100

Accrued advance royalties

5,200

4,700

Accrued payments to Agricultural Sustainability Trust

2,000

2,000

Long term debt, net of current portion

741

661

Other accrued liabilities

875

875

Total Liabilities

43,407

35,502

COMMITMENTS AND CONTINGENCIES — Note 11

CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST

206,336

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

92

91

Additional paid-in capital

272,035

270,902

Accumulated deficit before exploration stage

(213

)

(213

)

Accumulated deficit during exploration and development stage

(125,640

)

(122,640

)

Total Equity

146,274

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 evaluation

117

168

40,596

Write downs of development and deposits

8,819

General and administrative expense

2,522

2,925

82,897

TOTAL OPERATING EXPENSES

2,639

3,093

132,312

LOSS FROM OPERATIONS

(2,639

)

(3,093

)

(132,312

)

OTHER INCOME / (EXPENSE)

Interest and dividend income

4,068

Interest expense

(461

)

(64

)

(1,423

)

Realized gain from sale of mining properties

100

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 diluted

91,529

91,175

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 amortization

97

107

2,051

Interest expense

461

64

1,423

Equity compensation for employees and directors

848

810

19,074

(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 costs

1,124

(4

)

1,542

Services and expenses paid with common stock

1,990

Repricing of warrants

965

Write downs of development and deposits

8,819

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 agreement

3,100

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 costs

49

558

228,351

Net increase (decrease) in leased assets

130

(38

)

120

Decrease (increase) in capitalized debt issuance costs

(191

)

(3,909

)

Proceeds from debt

10,000

Cash proceeds from POS-Minerals Corporation

4,456

208,263

Cash paid to POS-Minerals Corporation for purchase price adjustment

(2,994

)

Net cash provided by financing activities

4,444