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General Moly Announces Fourth Quarter and Full Year 2012 Results

LAKEWOOD, Colo.--(BUSINESS WIRE)--Mar. 8, 2013-- General Moly, Inc. (the "Company") (NYSE MKT:GMO) (TSX:GMO), a U.S.-based molybdenum mineral development, exploration and mining company, announced its audited financial results for the fourth quarter and full year ended December 31, 2012. Net loss for the three months ended December 31, 2012 was $2.0 million ($0.03 per share), compared to a loss of $2.9 million ($0.03 per share) for the year ago period. Net loss for the full year ended December 31, 2012 was $9.9 million ($0.11 per share), compared to a loss of $14.8 million ($0.16 per share) for the year ago period.

The Company’s cash balance at December 31, 2012 was $68.3 million not including restricted cash compared to $22.4 million at September 30, 2012. During the fourth quarter, cash use of $22 million was the result of $18 million in Mt. Hope Project development, engineering and procurement costs and $4 million in General and Administrative expenses. This cash use was more than offset by the receipt of $104 million in contribution payments from POS-Minerals Corporation, a 20% joint venture partner on the Mt. Hope Project. The members of Eureka Moly, General Moly and POS-Minerals, agreed that $36 million of the contribution be held in a reserve account to maintain additional liquidity pending confirmation of a previously announced $665 million Chinese sourced Term Loan that is being negotiated with China Development Bank (“CDB”).

Bruce D. Hansen, Chief Executive Officer of General Moly, said "We achieved a number of significant milestones in 2012, including receipt of all major federal and state operating permits for the Mt. Hope Project and the initiation of preliminary construction activities at the site. We also received more than $100 million in additional financing from POS-Minerals. Looking into 2013, we are moving aggressively to conclude our financing and start heavy construction at Mt. Hope in the spring. We will also push forward with feasibility work and permitting on Liberty, our second world-class molybdenum project, after Mt. Hope has commenced heavy construction."

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 ended on November 13, 2012. On November 16, 2012 the U.S. Bureau of Land Management issued a Record of Decision (“ROD”) authorizing development of the Mt. Hope Project.

In addition to the ROD, three Nevada state-issued permits, the Air Quality Permit, the Reclamation Permit and the Water Pollution Control Permit were viewed as major environmental permits for the Mt. Hope Project. The Air Quality Permit was received on May 30, 2012, the Reclamation Permit was received on November 20, 2012 and the Water Pollution Control Permit was received on November 21, 2012.

Additionally, the State Archeologist at the Nevada State Office of the Bureau of Land Management issued an Archaeological Resource Protection Act Permit for the Mt. Hope Project treatment plan on November 29, 2012. On December 26, 2012, the Public Utilities Commission of Nevada granted a permit to construct a 230 kV power line that interconnects with Nevada Energy’s transmission system at the existing Machacek Substation located near the town of Eureka, NV and extend it approximately 25 miles to the planned Mt. Hope Substation.

MT. HOPE PROJECT FINANCING UPDATE

After the ROD and three major Nevada state-issued permits were received, POS-Minerals Corporation pursuant to the terms of the LLC agreement for the development and operation of the Mt. Hope Project funded its final $56 million initial contribution, plus 20% of all costs the Company has spent on the Mt. Hope Project to date for a combined total payment of approximately $104 million. Hereafter, the Mt. Hope Project will be funded 80% by the Company and 20% by POS-Minerals Corporation. The members of Eureka Moly, General Moly and POS-Minerals, agreed that $36 million of the contribution be held in a reserve account to maintain additional liquidity pending confirmation of a previously announced $665 million Chinese sourced Term Loan that is being negotiated with China Development Bank.

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 up to $125 million subject to certain conditions 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. 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 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 CONSTRUCTION UPDATE

Early construction activities are progressing as planned at the Mt. Hope Project site including cultural clearance, clearing and grubbing, wood harvesting, and the development of wells and water pipelines. Kautz Environmental Consultants has completed field mitigation activities for all 32 cultural sites identified in the Phase I Cultural Mitigation of the initial construction program. Official releases from the Bureau of Land Management and the State Historical Preservation Office have been obtained for 27 of the 32 cultural sites. Ames Construction mobilized in early January and has since cleared and grubbed approximately 1,000 acres in preparation for starting major earthworks. The mine, process plant, and tailings dam areas and associated roads have been substantially cleared. Ames has also commenced work on eight miles of water pipeline to supply construction water from the permitted well field to the plant site and will next establish site construction offices and communication systems. Additionally, TIC will soon begin the installation of seven miles of electrical power lines and will install the pumping stations to support the approximately 2,000 gallons per minute of construction water in preparation for heavy earthworks in the spring.

MT. HOPE PROJECT ENGINEERING AND EQUIPMENT PROCUREMENT UPDATE

Engineering efforts, which were paused in March 2009, were restarted in 2012 by M3 Engineering & Technology. Through December 31, 2012, Eureka Moly LLC has made deposits of $69.7 million on equipment orders and has paid $12.0 million into an escrow arrangement for electricity transmission services.

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 will be placed shortly after completion of project financing expected before mid year 2013.

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 $11.25 per pound.

Additional information on the Company’s fourth quarter 2012 results will be available in General Moly’s 2012 Form 10-K, 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 per share amounts)

 

December 31,

2012

December 31,

2011

ASSETS:
CURRENT ASSETS
Cash and cash equivalents $ 68,331 $ 40,709
Deposits, prepaid expenses and other current assets 136 105
Total Current Assets 68,467 40,814
Mining properties, land and water rights — Note 4 170,967 143,732
Deposits on project property, plant and equipment 69,691 66,474
Restricted cash held at EMLLC 36,000
Restricted cash held for electricity transmission 12,013 12,005
Restricted cash held for reclamation bonds 6,991 1,133
Non-mining property and equipment, net 605 819
Capitalized debt issuance and loan commitment costs 17,794 3,136
Other assets 2,994 2,994
TOTAL ASSETS $ 385,522 $ 271,107
LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST AND EQUITY:
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 10,133 $ 4,568
Accrued advance royalties 500 8,950
Accrued payments to Agricultural Sustainability Trust and Hanlong 4,000 2,000
Current portion of long term debt 10,906 10,596
Total Current Liabilities 25,539 26,114
Provision for post closure reclamation and remediation costs 627 587
Deferred gain 1,100 1,150
Accrued advance royalties 4,700
Accrued payments to Agricultural Sustainability Trust 2,000 2,000
Long term debt, net of current portion 661 131
Other accrued liabilities 875
Total Liabilities 35,502 29,982
 
COMMITMENTS AND CONTINGENCIES — Note 10
 
CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST 201,880 98,073
 
EQUITY
Common stock, $0.001 par value; 200,000,000 shares authorized, 91,333,092 and 90,818,248 shares issued and outstanding, respectively 91 91
Additional paid-in capital 270,902 255,894
Accumulated deficit before exploration stage (213 ) (213 )
Accumulated deficit during exploration and development stage (122,640 ) (112,720 )
Total Equity 148,140 143,052
TOTAL LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST AND EQUITY $ 385,522 $ 271,107
 
 
         

GENERAL MOLY, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except per share amounts)

 
Years Ended

January 1, 2002

(Inception of

Exploration Stage)

December 31,

2012

   

December 31,

2011

   

December 31,

2010

to

December 31,

2012

REVENUES $ $ $ $
 
OPERATING EXPENSES:
Exploration and evaluation 778 1,568 623

 

40,479

Writedowns of development and deposits 3,403 5,038

 

8,819

General and administrative expense 10,600 10,248 10,919

 

80,375

TOTAL OPERATING EXPENSES 11,378 15,219 16,580

 

129,673

 
LOSS FROM OPERATIONS (11,378 ) (15,219 ) (16,580 )

 

(129,673

)
 
OTHER INCOME/(EXPENSE):
Interest and dividend income 6 21 13

 

4,068

Interest expense (548 ) (250 ) (164 )

 

(962

)
Realized gain from sale of mining properties 2,000

 

2,000

TOTAL OTHER (EXPENSE)/INCOME, NET 1,458 (229 ) (151 )

 

5,106

 
LOSS BEFORE INCOME TAXES (9,920 ) (15,448 ) (16,731 )

 

(124,567

)
 
Income Taxes

 

 
CONSOLIDATED NET LOSS $ (9,920 ) $ (15,448 ) $ (16,731 )

$

(124,567 )
Less: Net loss attributable to contingently redeemable noncontrolling interest 680 1,008

 

1,927

NET LOSS ATTRIBUTABLE TO GENERAL MOLY, INC. $ (9,920 ) $ (14,768 ) $ (15,723 ) $ (122,640 )
Basic and diluted net loss attributable to General Moly per share of common stock $ (0.11 ) $ (0.16 ) $ (0.22 )

Weighted average number of shares outstanding — basic and diluted

91,230

90,588

72,987

 

COMPREHENSIVE LOSS

$

(9,920

)

$

(14,768

)

$

(15,723

)

$

(122,640

)

 

 

 

 

 

 

 

 

 

 
         

GENERAL MOLY, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 
Years Ended

January 1, 2002

(Inception of

Exploration Stage)

December 31,

2012

   

December 31,

2011

   

December 31,

2010

to

December 31,

2012

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (9,920 ) $ (15,448 ) $ (16,731 )   (124,567 )
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization 310 412 335 1,954
Interest expense 548 250 164 962
Warrant repricing 965 965

Stock-based compensation for employees and directors

1,414 1,713 1,641 18,226

(Increase) Decrease in deposits, prepaid expenses and other

(31 ) 43 31 (44 )
(Increase) Decrease in restricted cash held for electricity transmission (8 ) 281 (12,013 )

(Decrease) increase in accounts payable and accrued liabilities

(3,569 ) (10,761 ) 93 (10,872 )
Increase (decrease) in post closure reclamation and remediation costs 40 16 (15 ) 418
Recognition of income related to option to purchase agreement (2,000 ) (2,000 )
Writedowns of development and deposits 3,403 5,038 8,819
Services and expenses paid with common stock 1,990
Net cash used by operating activities (13,216 ) (20,372 ) (8,198 ) (116,162 )
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for the purchase of equipment 98 (124 ) (1,450 )
Purchase and development of mining properties, land and water rights (20,860 ) (10,567 ) (14,074 ) (140,134 )

(Deposits)/refunds on property, plant and equipment

(2,158 ) 177 (25,058 ) (70,065 )
Proceeds from option to purchase agreement 1,950 935 115 3,100
Increase in restricted cash held for reclamation bonds (5,858 ) (6,500 )
Increase in restricted cash — EMLLC (36,000 ) (36,000 )
Purchase of securities (137 )
Cash provided by sale of marketable securities 246
Net cash used by investing activities (62,828 ) (9,455 ) (39,141 ) (250,940 )
 
 
         

GENERAL MOLY, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 
Years Ended

January 1, 2002

(Inception of

Exploration Stage)

December 31,

2012

   

December 31,

2011

   

December 31,

2010

to

December 31,

2012

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of stock, net of issuance costs 583 19,412 43,103 228,302
Cash proceeds from POS-Minerals Corp. 103,807 203,807
Increase (decrease) in leased assets, net (142 ) (198 ) 80 (10 )
(Increase) in capitalized debt issuance costs (582 ) (2,249 ) (887 ) (3,718 )
Proceeds from debt 10,000 10,000
Cash paid to POS-Minerals Corp. for purchase price adjustment (2,994 )
Net cash provided by financing activities: 103,666 16,965 52,296 435,387

Increase (decrease) in cash and cash equivalents, net

27,622 (12,862 ) (4,958 ) 68,285
Cash and cash equivalents, beginning of period 40,709 53,571 48,614 46
Cash and cash equivalents, end of period $ 68,331 $ 40,709 $ 53,571   68,331
 
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Equity compensation capitalized as development $ 639 $ 258 $ 1,121   7,097
Accrued portion of advance royalties 5,200 18,450 5,200
Accrued portion of payments to the Agricultural Sustainability Trust and Hanlong 2,000 4,000 6,000
Accrued portion of deposits on property, plant and equipment 1,059 1,691 657 1,059
Loan commitment costs 12,076 12,076
Installment purchase of land 730 730

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
 
 

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, including recent request for preliminary injunction and appeal of the ROD. 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.

Source: General Moly, Inc.

General Moly:
Investors - Scott Kozak, (303) 928-8591
skozak@generalmoly.com
or
Media – Zach Spencer, (775) 748-6059
zspencer@generalmoly.com
info@generalmoly.com
Website: http://www.generalmoly.com