Press release from Business Wire
General Moly Announces First Quarter Results
Thursday, May 06, 2010
General Moly Announces First Quarter Results08:30 EDT Thursday, May 06, 2010 LAKEWOOD, Colo. (Business Wire) -- General Moly (NYSE Amex: GMO) (TSX: GMO) announced its unaudited financial results for the first quarter ended March 31, 2010. Net loss for the three months ended March 31, 2010 was approximately $2.8 million ($0.04 per share), compared to a loss of $3.0 million ($0.04 per share) for the year ago period. Consolidated cash balance at the end of the quarter was approximately $25 million compared to approximately $49 million at the end of 2009. During the first quarter, cash use of $24 million was the result of $21 million in development and milling equipment deposit costs and $3 million in General and Administrative costs. The Company anticipates spending approximately $8 million on equipment and associated freight and taxes in the second quarter, and a further $2 million through the end of the year on previously-contracted long-lead milling equipment. Financial information is included at the end of this release. PERMITTING UPDATE The Company currently expects the Bureau of Land Management (BLM) to complete an administrative Draft Environmental Impact Statement (EIS) mid-year and to receive its Record of Decision late in the fourth quarter of this year or early in 2011. The two final outstanding technical reports related to regional hydrology and pit lake geochemistry were completed and re-submitted to the BLM in late April and early May addressing comments received from the BLM late last year. The Company believes these reports are now final. As announced on April 26, 2010, a Nevada District Court remanded a Nevada State Engineer's decision to grant water permits to the Company back for a new hearing. A pre-hearing conference has been scheduled by the State Engineer for May 24, where the scope and date of the new hearing will be determined. The Company is working to expedite the schedule to the extent possible and anticipates the re-granting of its water applications to occur in the second half of the year. FINANCING UPDATE As announced on April 26, 2010, the Company drew the first $10 million tranche of the Bridge Loan under the Hanlong agreement, which is not reflected in the cash balances reported on these financial statements. Both parties continue to work toward achievement of Tranche 1 Conditions, including stockholder approval, which will be sought at the Company's May 13, 2010 Annual General Meeting. ENGINEERING AND EQUIPMENT PROCUREMENT UPDATE The Company will restart engineering efforts, which had been paused in March 2009 to conserve cash, following stockholder approval of the equity issuances in connection with the Hanlong transaction and publication of the Draft EIS, currently anticipated to occur by mid-year. Equipment procurement efforts, which had also been paused, will resume later in the year. Although the Company has secured orders for most of the milling equipment, firm orders for much of the mobile mine fleet still must be placed. MOLYBDENUM MARKET UPDATE Over the first quarter of 2010, spot molybdenum prices traded higher supported by strong demand from global steel producers, particularly in Asia. Reports from a variety of sources indicate that both Korean and Japanese steel mills are running at or near full capacity and that their access to moly is becoming strained. Chinese exports of moly remain at extremely low levels forcing Korean and Japanese steel producers to source moly from the West and providing support to prices. During the quarter, prices averaged approximately $16.50 per pound and are currently at $18 per pound. Additional information on the Company's fourth quarter and full year 2009 results will be available in General Moly's 2009 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(Dollars in thousands except per share amounts) March 31,2010December 31,2009(Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 24,617 $ 48,614 Deposits, prepaid expenses and other current assets 184 179 Total Current Assets 24,801 48,793 Mining properties, land and water rights 103,978 101,190 Deposits on project property, plant and equipment 66,059 42,648 Restricted cash held for electricity transmission 12,286 12,286 Restricted cash held for reclamation bonds 1,133 1,133 Non-mining property and equipment, net 503 553 Other assets 2,994 2,994 TOTAL ASSETS $ 211,754 $ 209,597 LIABILITIES, CONTINGENTLY REDEEMABLENONCONTROLLING INTEREST AND EQUITY CURRENT LIABILITIES Accounts payable and accrued liabilities $ 8,055 $ 3,799 Current portion of long term debt 153 163 Total Current Liabilities 8,208 3,962 Provision for post closure reclamation and remediation costs 561 586 Deferred gain 200 100 Long term debt, net of current portion 231 268 Total Liabilities 9,200 4,916 COMMITMENTS AND CONTINGENCIES CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST 99,761 99,761 EQUITY Preferred stock, Series A, $0.001 par value; 10,000,000 shares authorized, noshares issued and outstanding — — Common stock, $0.001 par value; 200,000,000 shares authorized, 72,567,538and 72,437,538 shares issued and outstanding, respectively 73 72 Additional paid-in capital 188,007 187,290 Accumulated deficit before exploration stage (213 ) (213 ) Accumulated deficit during exploration and development stage (85,074 ) (82,229 ) Total Equity 102,793 104,920 TOTAL LIABILITIES, CONTINGENTLY REDEEMABLENONCONTROLLING INTEREST AND EQUITY $ 211,754 $ 209,597 GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share amounts) Three Months EndedJanuary 1, 2002(Inception ofExplorationStage) to March31, 2010 March 31,2010 March 31,2009 REVENUES $ — $ — $ — OPERATING EXPENSES: Exploration and evaluation 127 198 37,637 General and administrative expense 2,719 2,913 51,705 TOTAL OPERATING EXPENSES 2,846 3,111 89,342 LOSS FROM OPERATIONS (2,846 ) (3,111 ) (89,342 ) OTHER INCOME Interest and dividend income 1 8 3,964 Other income — — 65 TOTAL OTHER INCOME 1 8 4,029 LOSS BEFORE TAXES (2,845 ) (3,103 ) (85,313 ) Income Taxes — — — NET LOSS $ (2,845 ) $ (3,103 ) $ (85,313 ) Less: Net loss attributable to contingently redeemablenoncontrolling interest — 103 239 NET LOSS ATTRIBUTABLE TO GENERALMOLY, INC. $ (2,845 ) $ (3,000 ) $ (85,074 ) Basic and diluted net loss attributable to General Molyper share of common stock $ (0.04 ) $ (0.04 ) Weighted average number of shares outstanding –basic and diluted 72,546 71,964 GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands) Three Months EndedJanuary 1, 2002(Inception ofExplorationStage) toMarch 31,2010 March 31,2010 March 31,2009 CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $ (2,845 ) $ (3,103 ) $ (85,313 ) Adjustments to reconcile net loss to net cash used by operating activities: Services and expenses paid with common stock — — 1,990 Forfeitures of deposits on property and equipment — — 378 Depreciation and amortization 89 85 986 Equity compensation for employees and directors 431 284 13,889 Decrease (increase) in deposits, prepaid expenses and other (5 ) (136 ) (92 ) Decrease (increase) in restricted cash held for electricitytransmission — 259 (12,286 ) (Decrease) increase in accounts payable and accrued liabilities (1,191 ) (390 ) 2,174 (Decrease) increase in post closure reclamation and remediationcosts (25 ) — 352 Net cash used by operating activities (3,546 ) (3,001 ) (77,922 ) CASH FLOWS FROM INVESTING ACTIVITIES: Payments for the purchase of equipment — — (1,424 ) Purchase of securities — — (137 ) Purchase and development of mining properties, land and waterrights (2,772 ) (8,200 ) (97,405 ) Deposits on property, plant and equipment (17,788 ) (710 ) (60,814 ) Proceeds from option to purchase agreement 100 — 200 Increase in restricted cash held for reclamation bonds — — (642 ) Cash provided by sale of marketablesecurities — — 246 Net cash used by investing activities (20,460 ) (8,910 ) (159,976 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of stock, net of issuance costs 56 — 165,260 Cash proceeds from POS-Minerals Corporation — — 100,000 Cash paid to POS-Minerals Corporation for purchase priceadjustment — — (2,994 ) Decrease (increase) in restricted cash – Eureka Moly, LLC — 10,776 — Net (decrease) increase in debt (47 ) (32 ) 203 Net cash provided by financing activities 9 10,744 262,469 Net (decrease) increase in cash and cash equivalents (23,997 ) (1,167 ) 24,571 Cash and cash equivalents, beginning of period 48,614 78,462 46 Cash and cash equivalents, end of period $ 24,617 $ 77,295 $ 24,617 NON-CASH INVESTING AND FINANCING ACTIVITIES: Equity compensation capitalized as development $ 267 $ 29 $ 5,346 Restricted cash held for reclamation bond acquired in anacquisition — — 491 Post closure reclamation and remediation costs and accountspayable assumed in an acquisition — — 263 Common stock and warrants issued for property and equipment — — 1,586 Accrued portion of deposits on property, plant and equipment (5,411 ) — (5,411 ) General Moly is a U.S.-based molybdenum mineral development, exploration and mining company listed on the NYSE Amex (formerly the American Stock Exchange) 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 primary molybdenum producer by the middle of the next decade. 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. 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.