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Press release from Business Wire

General Moly Announces Third Quarter 2012 Results

Wednesday, November 07, 2012

General Moly Announces Third Quarter 2012 Results08:30 EST Wednesday, November 07, 2012 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 third quarter ended September 30, 2012. Net loss for the three months ended September 30, 2012 was $2.1 million ($0.02 per share), compared to a loss of $2.4 million ($0.03 per share) for the year ago period. Net loss for the nine months ended September 30, 2012 was $8.0 million ($0.09 per share), compared to a loss of $11.9 million ($0.13 per share) for the year ago period. The Company's cash balance at September 30, 2012 was $22.4 million compared to $28.2 million at June 30, 2012. During the third quarter, cash use of $5.8 million was the result of $3.3 million in Mt. Hope Project development, engineering and procurement costs and $2.5 million in General and Administrative expenses. Bruce D. Hansen, Chief Executive Officer of General Moly, said, "The Company is close to entering its next stage of development, pivoting aggressively from a successful permitting and financing process which is rapidly concluding, to the construction and development of the world-class Mt. Hope Project. We are prudently investing in the necessary people, processes and equipment as we pursue our goal of becoming the largest pure play primary molybdenum producer in the world." 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 ends on November 13, 2012. Following the close of this period, we anticipate the BLM to issue a Record of Decision (“ROD”) allowing the Company to initiate construction activities. The Company continues to anticipate the ROD to be issued by the end of 2012. In addition to the ROD, three Nevada state-issued permits are viewed as major environmental permits. These are the Air Quality Permit, Water Pollution Control Permit, and the Reclamation Permit. The Air Quality Permit was received on May 30, 2012. The State of Nevada Division of Environmental Protection (NDEP) published Notices of Proposed Action on October 1, 2012 stating their tentative decision to issue a Water Pollution Control Permit and a Reclamation Permit for the Mt. Hope Project. Following the 30-day public review and comment period, the hearing for both permits took place on October 30, 2012. The Company anticipates receiving the Water Pollution Control Permit and Reclamation Permit in the same timeframe as the issuance of the ROD. MT. HOPE PROJECT FINANCING UPDATE When final permits are received, POS-Minerals Corporation (a 20% owner of the Mt. Hope Project) pursuant to the terms of the LLC agreement for the development and operation of the Mt. Hope Project is anticipated to fund its final $56 million initial contribution, plus 20% of all costs the Company has spent on the Mt. Hope Project to date. The Company estimates this combined payment will be approximately $100 million. Thereafter, the Mt. Hope Project will be funded 80% by the Company and 20% by POS-Minerals Corporation. 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, with a six month option to arrange a third-party credit facility, up to $125 million 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 (“CDB”). 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 the 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 ENGINEERING AND EQUIPMENT PROCUREMENT UPDATE Engineering efforts, which were paused in March 2009, were restarted earlier this year by M3 Engineering & Technology following the publication of the Draft EIS. 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 must still be placed. 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 $10.90 per pound. Additional information on the Company's third quarter 2012 results will be available in General Moly's 2012 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 per share amounts)     September 30,2012(Unaudited)   December 31,2011ASSETS: CURRENT ASSETS Cash and cash equivalents $ 22,353 $ 40,709 Deposits, prepaid expenses and other current assets 102 105 Total Current Assets 22,455 40,814 Mining properties, land and water rights — Note 4 161,054 143,732 Deposits on project property, plant and equipment 67,434 66,474 Restricted cash held for electricity transmission 12,010 12,005 Restricted cash held for reclamation bonds 1,133 1,133 Non-mining property and equipment, net 653 819 Capitalized debt issuance costs 5,462 3,136 Other assets 2,994 2,994 TOTAL ASSETS $ 273,195 $ 271,107 LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST AND EQUITY: CURRENT LIABILITIES Accounts payable and accrued liabilities $ 4,815 $ 4,568 Accrued advance royalties 8,950 8,950 Accrued payments to Agricultural Sustainability Trust and Hanlong 4,000 2,000 Current portion of long term debt 10,733 10,596 Total Current Liabilities 28,498 26,114 Provision for post closure reclamation and remediation costs 631 587 Deferred gain 1,450 1,150 Accrued advance royalties 5,200 — Accrued payments to Agricultural Sustainability Trust 2,000 2,000 Long term debt, net of current portion 76 131 Total Liabilities 37,855 29,982   COMMITMENTS AND CONTINGENCIES — Note 10 — —   CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST 98,073 98,073   EQUITY Common stock, $0.001 par value; 200,000,000 shares authorized, 91,265,807 and 90,818,248 shares issued and outstanding, respectively 91 91 Additional paid-in capital 258,069 255,894 Accumulated deficit before exploration stage (213 ) (213 ) Accumulated deficit during exploration and development stage (120,680 ) (112,720 ) Total Equity 137,267 143,052 TOTAL LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST AND EQUITY $ 273,195 $ 271,107     GENERAL MOLY, INC.(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 ofExplorationSeptember 30,2012   September 30,2011September 30,2012   September 30,2011Stage) toSeptember30, 2012   REVENUES $ — $ — $ — $ — $ — OPERATING EXPENSES: Exploration and evaluation 255 793 582 1,249 40,283 Write downs of development and deposits — — — 3,403 8,819 General and administrative expenses 1,808 1,526 7,187 7,754 76,962 TOTAL OPERATING EXPENSES 2,063 2,319 7,769 12,406 126,064 LOSS FROM OPERATIONS (2,063 ) (2,319 ) (7,769 ) (12,406 ) (126,064 ) OTHER INCOME / (EXPENSE) Interest and dividend income — — — 19 4,062 Interest expense (63 ) (61 ) (191 ) (187 ) (605 ) TOTAL OTHER (EXPENSE) / INCOME, NET (63 ) (61 ) (191 ) (168 ) 3,457 LOSS BEFORE INCOME TAXES (2,126 ) (2,380 ) (7,960 ) (12,574 ) (122,607 ) Income Taxes — — — — — CONSOLIDATED NET LOSS $ (2,126 ) $ (2,380 ) $ (7,960 ) $ (12,574 ) $ (122,607 ) Less: Net loss attributable to contingently redeemable noncontrolling interest — — — 680 1,927 NET LOSS ATTRIBUTABLE TO GENERAL MOLY, INC. $ (2,126 ) $ (2,380 ) $ (7,960 ) $ (11,894 ) $ (120,680 ) Basic and diluted net loss attributable to General Moly per share of common stock $ (0.02 ) $ (0.03 ) $ (0.09 ) $ (0.13 ) Weighted average number of shares outstanding — basic and diluted 91,238 90,778 91,212 90,518   COMPREHENSIVE LOSS $ (2,126 ) $ (2,380 ) $ (7,960 ) $ (11,894 ) $ (120,680 )     GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF CASH FLOWS     Nine Months Ended   January 1, 2002(Inception ofExplorationStage) toSeptember 30,2012   September 30,2011September 30,2012 CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $ (7,960 ) $ (12,574 ) $ (122,607 ) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation and amortization 212 306 1,856 Interest expense 191 187 605 Equity compensation for employees and directors 1,172 1,556 17,984 Decrease (Increase) in deposits, prepaid expenses and other assets 3 (313 ) (10 ) Increase (Decrease) in accounts payable and accrued liabilities 103 (2,703 ) (7,200 ) Increase (Decrease) in post closure reclamation and remediation costs 44 (9 ) 422 (Increase) in restricted cash held for electricity transmission (5 ) — (12,010 ) Write downs of development and deposits — 3,403 8,819 Services and expenses paid with common stock — — 1,990 Repricing of warrants — — 965 Net cash used by operating activities (6,240 ) (10,147 ) (109,186 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase and development of mining properties, land and water rights (11,742 ) (7,297 ) (132,564 ) Deposits (Refunds) on property, plant and equipment (816 ) 177 (68,723 ) Proceeds from option to purchase agreements 300 585 1,450 Purchase of securities — — (137 ) Increase in restricted cash held for reclamation bonds — — (642 ) Cash provided by sale of marketable securities — — 246 Net cash used by investing activities (12,258 ) (6,535 ) (200,370 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of stock, net of issuance costs 577 19,415 228,296 Net (decrease) increase in leased assets (109 ) (149 ) 23 Payments for debt issuance costs (326 ) (1,795 ) (3,462 ) Proceeds from debt — — 10,000 Cash proceeds from POS-Minerals Corporation — — 100,000 Cash paid to POS-Minerals Corporation for purchase price adjustment — — (2,994 ) Net cash provided by financing activities 142 17,471 331,863 Net increase (decrease) in cash and cash equivalents (18,356 ) 789 22,307 Cash and cash equivalents, beginning of period 40,709 53,571 46 Cash and cash equivalents, end of period $ 22,353 $ 54,360 $ 22,353 NON-CASH INVESTING AND FINANCING ACTIVITIES: Equity compensation capitalized as development $ 426 $ 165 $ 6,884 Accrued portion of advance royalties 5,200 — 14,150 Accrued portion of capitalized debt issuance costs 2,000 — 2,000 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 payments to the Agricultural Sustainability Trust — — 4,000   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 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. 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. General MolyInvestors:Scott Kozak, 303-928-8591skozak@generalmoly.comorMedia:Zach Spencer, 775-748-6059zspencer@generalmoly.comorinfo@generalmoly.com