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General Moly Announces Third Quarter 2014 Results

LAKEWOOD, Colo.--(BUSINESS WIRE)--Nov. 3, 2014-- General Moly, Inc. (the "Company" or “General Moly”) (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, 2014. Net loss for the three months ended September 30, 2014 was $3.2 million ($0.04 per share), compared to net income of $2.6 million ($0.03 per share) for the year ago period. The primary reason for the $2.6 million net income during the third quarter of 2013 was the non-cash accounting treatment associated with the termination of the Securities Purchase Agreement between the Company and Hanlong (USA) Mining.

Excluding restricted cash, the Company’s cash balance at September 30, 2014 was approximately $8 million compared to $22 million at December 31, 2013 and $12 million at June 30, 2014. During the third quarter, cash use of $4 million was the result of $2 million spent on Mt. Hope Project development costs (process equipment, engineering, procurement, owner’s cost, and reclamation bond premiums), $1 million in Liberty Project Pre-Feasibility Study related expenditures and $1 million in general and administrative expenses. In December 2012, the Company and POS-Minerals, as the members of Eureka Moly, LLC (“EMLLC”), agreed to hold, as restricted cash, $36 million due to the Company, of the approximately $100 million received from POS-Minerals’ December 2012 contributions. These funds will be held in a reserve account until the Company arranges full project financing for its 80% share of Mt. Hope Project construction cost, or until the EMLLC management committee agrees to release the funds.

To maintain liquidity the Company has engaged in discussions with POS-Minerals to examine the possibility of a potential utilization of the $36 million of restricted cash to fund ongoing Mt. Hope related expenditures. In addition, the Company is evaluating other reasonable funding options, incremental non-core asset sales and further cost reductions.

Bruce D. Hansen, Chief Executive Officer of General Moly, said "We are focused on Mt. Hope financing and encouraged by the advances we have made in negotiations on investment agreement terms, sponsorship requirements, and indicative loan terms associated with a $700 to $750 million debt and equity package. We continue to see strong interest from multiple private Chinese industrial companies and a large Chinese financial institution in advancing the fully permitted, construction-ready project.”

Mr. Hansen added, “As we continue to drive the Mt. Hope Project forward, we are also developing the scope to support a Full Feasibility Study for our Liberty Project. As we proceed, the Company will continue to prudently manage its liquidity position.”

MT. HOPE PROJECT WATER RIGHTS AND PERMIT APPEALS UPDATE

Two challenges of the Mt. Hope Project’s water permits and Management, Monitoring & Mitigation (“3M”) Plan were separately appealed to the Nevada Supreme Court (“Supreme Court”) and consolidated by the Supreme Court into one appeal. Briefing has been completed, and oral argument challenging the water permits and 3M Plan was heard on June 30, 2014 by the Supreme Court. A ruling is expected in late 2014.

In February 2013, two parties (“Plaintiffs”) filed a Complaint challenging issuance of the Record of Decision (“ROD”) for the Mt. Hope Project. The federal District Court in Nevada (“District Court”) approved EMLLC’s request to intervene in the matter. Following briefing by the parties the District Court denied the Plaintiffs’ motion for summary judgment, and on August 1, 2014 entered judgment against the Plaintiffs regarding all claims raised in the Complaint. As anticipated, on September 22nd the Plaintiffs filed their notice of appeal to the U.S. Court of Appeals for the Ninth Circuit. Briefing by the parties will likely commence in the first quarter of 2015.

All permits remain in effect. The Company will continue to vigorously defend the legal challenges to the ROD, and we believe the Mt. Hope Project's permits and ROD will be upheld after judicial review.

MT. HOPE PROJECT ENGINEERING AND EQUIPMENT PROCUREMENT UPDATE

Engineering is approximately 65% complete at the Mt. Hope Project. Through September 30, 2014, EMLLC has made deposits of $74.1 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 has a letter of intent for the purchase of two electric shovels.

Approximately 70% of the planned spend on process equipment has been defined through hard bids and purchase orders and the cost for this equipment is estimated to remain on budget. Further, approximately 80% of planned spend on mining equipment has been committed with cancelable purchase orders, the cost for which is also estimated to remain on budget. Some of the mining equipment committed spend is subject to Producer Price Index-based escalation and additional holding costs if there are extended delays, and some agreements would be subject to cancellation. The Mt. Hope Project remains in a construction-ready status pending full project financing.

Additional information on the Company’s third quarter 2014 results will be available in General Moly’s 2014 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)

 

September 30,
2014
(Unaudited)

December 31,
2013
ASSETS:
CURRENT ASSETS
Cash and cash equivalents $ 8,020 $ 21,685
Deposits, prepaid expenses and other current assets 315 625
Total Current Assets 8,335 22,310
Mining properties, land and water rights 214,277 206,251
Deposits on project property, plant and equipment 74,137 74,108
Restricted cash held at EMLLC 36,000 36,000
Restricted cash held for electricity transmission 12,021 12,020
Restricted cash held for reclamation bonds 6,342 6,332
Non-mining property and equipment, net 556 669
Other assets 2,994 2,994
TOTAL ASSETS $ 354,662 $ 360,684
LIABILITIES, CRNCI, AND EQUITY:
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 4,637 $ 4,691
Accrued advance royalties 500 500
Accrued payments to Agricultural Sustainability Trust 2,000 2,000
Current portion of long term debt 224 263
Total Current Liabilities 7,361 7,454
Provision for post closure reclamation and remediation costs 1,045 1,318
Accrued advance royalties 5,200 4,700
Accrued payments to Agricultural Sustainability Trust 2,000 2,000
Long term debt, net of current portion 382 538
Other accrued liabilities 875 875
Total Liabilities 16,863 16,885
 
COMMITMENTS AND CONTINGENCIES
 
CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST (“CRNCI”) 209,447 209,007
 
EQUITY

Common stock, $0.001 par value; 200,000,000 shares authorized, 91,911,607 and
  91,761,249 shares issued and outstanding, respectively

92 92
Additional paid-in capital 275,841 273,857
Accumulated deficit before exploration stage (213 ) (213 )
Accumulated deficit during exploration and development stage (147,368 ) (138,944 )
Total Equity 128,352 134,792
TOTAL LIABILITIES, CRNCI, AND EQUITY $ 354,662 $ 360,684
 
       

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

(Unaudited — In thousands, except per share amounts)

 
Three Months Ended Nine Months Ended January 1, 2002
(Inception of
Exploration
September 30,
2014
  September 30,
2013
September 30,
2014
  September 30,
2013
Stage) to September
30, 2014
REVENUES $ $ $ $ $
OPERATING EXPENSES:
Exploration and evaluation 653 366 1,773 699 43,024
General and administrative expense 2,585 1,429 6,651 6,303 96,011
Write-downs of development and deposits 8,819
TOTAL OPERATING EXPENSES 3,238 1,795 8,424 7,002 147,854
LOSS FROM OPERATIONS (3,238 ) (1,795 ) (8,424 ) (7,002 ) (147,854 )
OTHER INCOME / (EXPENSE):
Interest and dividend income 1 4,070
Interest expense (32 ) (753 ) (1,715 )
Realized gain from sale of mining properties 100 3,292
Write off of loan commitment fees (warrant) (11,472 ) (11,472 )
Gain on forgiveness of debt (interest on bridge loan) 804 804 804
Constructive receipt of break fee 10,000 10,000 10,000
Write-off of debt issuance costs (6,420 ) (6,420 ) (6,420 )
TOTAL OTHER (EXPENSE) / INCOME , NET 4,352 (7,740 ) (1,441 )
(LOSS)/INCOME BEFORE INCOME TAXES (3,238 ) 2,557 (8,424 ) (7,740 ) (149,295 )
Income Taxes
CONSOLIDATED NET (LOSS)/INCOME $ (3,238 ) $ 2,557 $ (8,424 ) $ (14,742 ) $ (149,295 )
Less: Net loss attributable to CRNCI 1,927
NET (LOSS)/INCOME ATTRIBUTABLE TO GMI $ (3,238 ) $ 2,557 $ (8,424 ) $ (14,742 ) $ (147,368 )
Basic net (loss)/income attributable to GMI per share of common stock $ (0.04 ) $ 0.03 $ (0.09 ) $ (0.16 )
Weighted average number of shares outstanding — basic 91,884 91,562 91,873 91,546
Diluted net (loss)/income attributable to GMI per share of common stock (0.04 ) 0.03 (0.09 ) (0.16 )
Weighted average number of shares outstanding —diluted 91,884 92,054 91,873 91,546
 
COMPREHENSIVE (LOSS)/INCOME $ (3,238 ) $ 2,557 $ (8,424 ) $ (14,742 ) $ (147,368 )
 
     

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

(Unaudited — In thousands)

 
Nine Months Ended

January 1, 2002
(Inception of
Exploration
Stage) to

September 30,
2014
  September 30,
2013
September 30,
2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated Net Loss $ (8,424 ) $ (14,742 ) $ (149,295 )
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization 219 290 2,514
Interest expense 751 1,715
Stock-based compensation for employees and directors 1,405 1,425 21,460
Decrease (increase) in deposits, prepaid expenses and other 310 (325 ) (223 )
Increase (decrease) in accounts payable and accrued liabilities 663 (8,435 ) (18,379 )
(Increase) in restricted cash held for electricity transmission (1 ) (7 ) (12,021 )
(Decrease) increase in post closure reclamation and remediation costs (273 ) 1,027 836
Realized gain related to sale of mining properties (100 ) (3,292 )
Write off of loan commitment fees (warrant) 11,472 11,472
Gain on forgiveness of debt (interest on bridge loan) (804 ) (804 )
Constructive receipt of break fee (10,000 ) (10,000 )
Write-off of debt issuance costs 6,420 6,420
Write downs of development and deposits 8,819
Services and expenses paid with common stock 1,990
Warrant repricing 965
Net cash used by operating activities (6,101 ) (13,028 ) (137,823 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase and development of mining properties, land and water rights (7,042 ) (31,896 ) (183,906 )
Deposits on property, plant and equipment (746 ) (3,615 ) (74,500 )
Proceeds from option to purchase agreement 400 4,100
(Increase) in restricted cash held for reclamation bonds (10 ) (5,851 )
(Increase) in restricted cash - EMLLC (36,000 )
Cash provided by sale of marketable securities 109
Net cash used by investing activities (7,798 ) (35,111 ) (296,048 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash proceeds from POS-Minerals Corporation 440 6,880 211,374
(Decrease) in leased assets, net (195 ) (110 ) (455 )
Stock proceeds, net of issuance costs, and restricted stock net share settlement (11 ) 49 228,340
Capitalized debt issuance costs (702 ) (4,420 )
Proceeds from debt 10,000
Cash paid to POS-Minerals Corporation for purchase price adjustment (2,994 )
Net cash provided by financing activities 234 6,117 441,845
Net (decrease) increase in cash and cash equivalents (13,665 ) (42,022 ) 7,974
Cash and cash equivalents, beginning of period 21,685 68,331 46
Cash and cash equivalents, end of period $ 8,020 $ 26,309 $ 8,020
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Equity compensation capitalized as development $ 590 733 $ 8,765
Change in accrued portion of deposits on property, plant and equipment (717 ) (717 )
Installment purchase of equipment and land 74 139
Accrued portion of advance royalties 500 500 5,700
Accrued payments to the Agricultural Sustainability Trust 4,000

Post closure reclamation and remediation costs, reclamation bond, and
  accounts payable assumed in an acquisition

754
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. The Company’s 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 the Company’s second project, the Liberty Project, a molybdenum and copper property 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 maintain required permits to continue construction, commence production and its ability to raise required project financing, adverse governmental regulation and judicial outcomes, including appeal of the Record of Decision and appeal of water permits and estimates related to cost of production, capital, operating and exploration expenditures. 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

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