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Press release from Business Wire

General Moly Announces Fourth Quarter and Full Year 2010 Results

Wednesday, March 02, 2011

General Moly Announces Fourth Quarter and Full Year 2010 Results08:30 EST Wednesday, March 02, 2011 LAKEWOOD, Colo. (Business Wire) -- General Moly, Inc. (NYSE Amex:GMO) (TSX:GMO) announced its audited financial results for the fourth quarter and full year ended December 31, 2010. Net loss for the three months ended December 31, 2010 was approximately $3.4 million ($0.05 per share), compared to a loss of $2.1 million ($0.03 per share) for the year ago period. Net loss for the full year ended December 31, 2010 was approximately $15.7 million ($0.22 per share), compared to a loss of $10.2 million ($0.14 per share) for the year ago period. Our cash balance at the end of the fourth quarter was approximately $54 million compared to approximately $17 million at the end of the third quarter and approximately $49 million at the end of 2009. During the fourth quarter, cash use of approximately $6 million was the result of $4 million in development and milling equipment deposit costs and approximately $2 million in General and Administrative costs, offset by the receipt of $40 million from the closing of Tranche 1 of the Hanlong equity financing on December 20, 2010 and approximately $3 million from the exercise of warrants from a 2006 private placement. During the first quarter of 2011, all outstanding warrants from the 2006 private placement were exercised, with net proceeds of approximately $19 million. At the date of this release, the Company's unaudited cash balance is approximately $65 million. During 2011, spending levels will largely be tied to progress toward receipt of the Mt. Hope project's permits. Financial information is included at the end of this release. FINANCING UPDATE Future funding commitments for the Mt. Hope project are connected to receipt of permits for the Mt. Hope project. When final permits are received, POS-Minerals Corporation (the 20% joint venture partner at the Mt. Hope project) is anticipated to fund its final $56 million initial contribution, plus 20% of all money the Company has spent on the Mt. Hope project at that point. The Company estimates this combined payment will be approximately $100 million. From that point forward, the project will be funded 80% by the Company and 20% by POS-Minerals Corporation. Also when final permits are received, Hanlong will have three months to deliver a fully-executed, drawable loan of not less than $665 million. Currently the Company is working with a Chinese engineering firm to translate and format its Mt. Hope feasibility study for review by Chinese banks. When the loan is in place, the Company will close on the Tranche 2 equity sale for $40 million, bringing Hanlong's share position in the Company to 25% on a fully-diluted basis. In total, these financing commitments are anticipated to fully-fund the Mt. Hope project. PERMITTING UPDATE The Bureau of Land Management (BLM) and its independent EIS contractor are continuing progress toward finalizing the Mt. Hope project's Draft Environmental Impact Statement (DEIS) for publication. The Preliminary DEIS is anticipated to be released for the second round of Cooperating Agency Review shortly. The Company estimates the BLM will complete the Draft Environmental Impact Statement (DEIS) within the second quarter and that it will be published in the Federal Register in the third quarter. Following publication of the DEIS, full permits are anticipated within 6-9 months. ENGINEERING AND EQUIPMENT PROCUREMENT UPDATE The Company will restart engineering efforts, which had been paused to conserve cash in March 2009, following the publication of the DEIS. Equipment procurement efforts, which had also been paused, will resume later in the year. Although the Company has purchased and ordered most of the long-lead milling equipment, firm orders for much of the mobile mine fleet and other process equipment must still be placed. MOLYBDENUM MARKET UPDATE Over the fourth quarter of 2010, molybdenum prices traded slightly upward and finished the year at $16.10 per pound, compared to $15.35 per pound at the end of the third quarter and $12.00 at the end of 2009. Since the end of 2010, prices have continued their general upward trend and are currently trading near $18.00 per pound. Higher prices continue to be driven by Chinese steel demand, as well as a more gradual return of western world growth, particularly relating to stainless steel. China remained a net importer of molybdenum in 2010, although net imports of approximately 4 million pounds is down substantially from 2009 levels, indicating that the high-cost domestic production within China that shuttered in 2008 and 2009 as a response to low prices has likely returned to production. Low levels of raw exports from China continue to force Korean and Japanese steel producers to source molybdenum from the West. Additional information on the Company's fourth quarter and full year 2010 results will be available in General Moly's 2010 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(Audited - In thousands except per share amounts)   As of December 31,2010As of December 31,2009ASSETS: CURRENT ASSETS Cash and cash equivalents $ 53,571 $ 48,614 Deposits, prepaid expenses and other current assets   148     179   Total Current Assets 53,719 48,793 Mining properties, land and water rights 133,093 101,190 Deposits on project property, plant and equipment 68,363 42,648 Restricted cash held for electricity transmission 12,005 12,286 Restricted cash held for reclamation bonds 1,133 1,133 Non-mining property and equipment, net 1,045 553 Debt issuance costs 887 — Other assets   2,994       2,994   TOTAL ASSETS $ 273,239   $ 209,597     LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST AND EQUITY: CURRENT LIABILITIES Accounts payable and accrued liabilities $ 4,138 $ 3,799 Accrued advance royalties 9,500 Current portion of long term debt   194     163   Total Current Liabilities   13,832     3,962   Provision for post closure reclamation and remediation costs 571 586 Deferred gain 215 100 Other liabilities 12,950 — Long term debt, net of current portion   10,481     268   Total Liabilities 38,049 4,916   COMMITMENTS AND CONTINGENCIES — —   CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST 98,753 99,761 EQUITY Common stock, $0.001 par value; 200,000,000 shares authorized, 85,353,473 and 72,437,538 shares issued and outstanding, respectively 85 72 Additional paid-in capital 234,517 187,290 Accumulated deficit before exploration stage (213 ) (213 ) Accumulated deficit during exploration and development stage   (97,952 )     (82,229 ) Total Equity   136,437     104,920   TOTAL LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST AND EQUITY $ 273,239   $ 209,597   GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF OPERATIONS(Audited - In thousands, except per share amounts)     Years Ended   January 1, 2002(Inception ofExploration Stage)toDecember 31,2010December 31,2010December 31,2009December 31,2008 REVENUES $ — $ — $ — $ — OPERATING EXPENSES: Exploration and evaluation 623 806 5,670 38,133 Writedowns of development and deposits 5,038 — — 5,038 General and administrative expense   10,919   9,703   10,436   59,905 TOTAL OPERATING EXPENSES   16,580   10,509   16,106   103,076 LOSS FROM OPERATIONS (16,580 ) (10,509 ) (16,106 ) (103,076 ) OTHER INCOME/(EXPENSE): Interest and dividend income 13 31 1,692 4,041 Interest expense   (164 )   —   —   (164 ) TOTAL OTHER INCOME/(EXPENSE), NET   (151 )   31   1,692   3,877 LOSS BEFORE INCOME TAXES (16,731 ) (10,478 ) (14,414 ) (99,199 ) Income Taxes   —   —   —   — CONSOLIDATED NET LOSS $ (16,731 ) $ (10,478 ) $ (14,414 ) $ (99,199 ) Less: Net loss attributable to contingently redeemable noncontrolling interest 1,008 239 — 1,247 NET LOSS ATTRIBUTABLE TO GENERAL MOLY, INC. $ (15,723 ) $ (10,239 ) $ (14,414 ) $ (97,952 ) Basic and diluted net loss attributable to General Moly per share of common stock $ (0.22 ) $ (0.14 ) $ (0.21 ) Weighted average number of shares outstanding— basic and diluted 72,987 72,226 70,216 GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF CASH FLOWS(Audited - In thousands)     Years Ended   January 1, 2002(Inception ofExploration Stage)toDecember 31,2010December 31,2010December 31,2009December 31,2008 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (16,731 ) $ (10,478 ) $ (14,414 ) $ (99,199 ) Adjustments to reconcile net loss to net cash used by operating activities: Services and expenses paid with common stock — — — 1,990 Repricing of warrants 965 — — 965 Writedowns of development and deposits 5,038 378 — 5,416 Depreciation and amortization 335 344 295 1,280 Interest expense 164 — — 164 Equity compensation for employees and directors 1,641 1,474 2,457 14,893 Decrease (increase) in deposits, prepaid expenses and other 31 147 168 (56 ) Decrease (increase) in restricted cash held for electricity transmission 281 259 (12,545) (12,005 ) Increase (decrease) in accounts payable and accrued liabilities 93 (3,305) (764) 3,569 (Decrease) increase in post closure reclamation and remediation costs (15 ) (145 ) 219 362 Net cash used by operating activities (8,198 ) (11,326 ) (24,584 ) (82,621 ) CASH FLOWS FROM INVESTING ACTIVITIES: Payments for the purchase of equipment (124 ) (100 ) (481 ) (1,482 ) Purchase of securities — — — (137 ) Purchase and development of mining properties, land and water rights (14,074 ) (20,879 ) (47,389 ) (108,726 ) Deposits on property, plant and equipment (25,058 ) (11,527 ) (31,009 ) (68,084 ) Proceeds from option to purchase agreement 115 100 — 215 Increase in restricted cash held for reclamation bonds — — (356 ) (642 ) Cash provided by sale of marketable securities — — — 246 Net cash used by investing activities (39, 141 ) (32,406 ) (79,235 ) (178,610 ) GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF CASH FLOWS(Audited - In thousands)     Years Ended   January 1, 2002(Inception ofExploration Stage)toDecember 31,2010December 31,2010December 31,2009December 31,2008 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of stock, net of issuance costs 43,103 99 20,575 208,307 Proceeds from debt 10,000 — — 10,000 Cash proceeds from POS-Minerals Corporation — — 100,000 100,000 Cash paid to POS-Minerals Corporation for purchase price adjustment — — (2,994) (2,994 ) Decrease (increase) in restricted cash – Eureka Moly, LLC — 13,915 (13,915) — Net increase in leased assets 80 — — 330 (Increase) in debt issuance costs (887 ) — — (887 ) Net cash provided by financing activities: 52,296 13,884 103,910 314,756 Net increase (decrease) in cash and cash equivalents 4,957 (29,848 ) 91 53,525 Cash and cash equivalents, beginning of period 48,614 78,462 78,371 46 Cash and cash equivalents, end of period $ 53,571 $ 48,614 $ 78,462 $ 53,571 NON-CASH INVESTING AND FINANCING ACTIVITIES: Equity compensation capitalized as development $1,121 $950 $ 2,325 $6,294 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 Accrued portion of deposits on property, plant and equipment 657 — — 657 Accrued portion of advance royalties 18,450 — — 18,450 Accrued portion of payments to the Agricultural Sustainability Trust 4,000 — — 4,000 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 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. The closing of the Hanlong transaction and obtaining bank financing are subject to a number of conditions precedent that may not be fulfilled. 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. General MolySeth Foreman, 303-928-8591sforeman@generalmoly.cominfo@generalmoly.comWebsite: http://www.generalmoly.com