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Press release from Business Wire

General Moly Announces First Quarter 2013 Results

Friday, May 03, 2013

General Moly Announces First Quarter 2013 Results

08:30 EDT Friday, May 03, 2013

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 first quarter ended March 31, 2013. Net loss for the three months ended March 31, 2013 was $3.0 million ($0.03 per share), compared to a loss of $3.2 million ($0.03 per share) for the year ago period.

Excluding restricted cash, the Company's cash balance at March 31, 2013 was approximately $57 million compared to $68 million at December 31, 2012. During the first quarter, cash use of $16 million was the result of Mt. Hope Project development, engineering, and procurement costs as well as general and administrative expenses partially offset by the receipt of $5 million in contribution payments from POS-Minerals Corporation. In December, the Company and POS-Minerals, as members of Eureka Moly, LLC (“EMLLC”), agreed to hold $36 million of the approximately $100 million received from POS-Minerals' December 2012 contributions in a reserve account to maintain additional liquidity until the Company arranges full project financing.

In a previous project financing update, the Company reported that on March 20, 2013, the Company was notified that China Development Bank had provided instructions to its legal counsel to suspend work on the $665 million Term Loan. This suspension relates to reports that Mr. Liu Han, Chairman of Sichuan Hanlong Group has been detained by Chinese authorities. The Company is continuing efforts with Hanlong (USA) Mining (“Hanlong”) to secure another strategic partner to help advance the full financing of the Mt. Hope Project.

Bruce D. Hansen, Chief Executive Officer of General Moly, said "The Company made substantial progress with regards to our preliminary construction activities at Mt. Hope during the first quarter including early well field development, clearing and grubbing of terrain and cultural clearance.”

Mr. Hansen added, “We are working with Hanlong to secure another Chinese strategic partner to help advance the full financing of the Mt. Hope Project and reinvigorate advanced stage loan negotiations with China Development Bank. Our efforts to secure such a strategic partner are enhanced, given that we are advancing a fully permitted, construction-ready, high grade / lower cost molybdenum deposit along with our EMLLC partner POS-Minerals.”

Mr. Hansen concluded, “As we continue our efforts towards full financing at Mt. Hope, the Company will continue to prudently manage our unrestricted cash position of $57 million at the end of the first quarter with an additional $36 million in restricted cash.”

MT. HOPE PROJECT CONSTRUCTION UPDATE

Early construction activities progressed as planned at the Mt. Hope Project site including cultural clearance, clearing and grubbing, wood harvesting, and the development of early construction water. Kautz Environmental Consultants completed field mitigation activities for all 29 cultural sites identified in the Phase I Cultural Mitigation of the initial construction program. Official releases from the Bureau of Land Management (“BLM”) and the State Historical Preservation Office have been obtained for all 29 cultural sites and the Company has advanced into Phase II Cultural Mitigation activities. Ames Construction has cleared and grubbed approximately 1,800 acres in preparation for starting major earthworks. The mine, process plant, and tailings dam areas and associated roads have been substantially cleared. Ames Construction also has completed four miles of water pipeline (approximately 50% of total planned) to supply construction water from the permitted well field to the plant site.

MT. HOPE PROJECT WATER RIGHTS AND PERMIT APPEALS UPDATE

The Nevada State Engineer (“State Engineer”) completed issuance of all water permits for the Mt. Hope Project in January 2012, and the water became available for use following the State Engineer's approval of the Company's Monitoring, Management and Mitigation Plan (“3M Plan”) in June 2012, subject to a subsequent appeal of the 3M Plan to the Nevada State District Court (“District Court”). Following oral argument on April 15, 2013, the District Court denied the appeal petition favorably upholding the State Engineer's approval of the 3M Plan. The District Court's written Order is pending.

The water permits arising from the State Engineer's July 2011 Ruling were appealed to the Nevada Supreme Court by Eureka County and two parties of water rights holders in Diamond and Kobeh Valley, following the District Court's June 2012 denial of an appeal petition, affirming the State Engineer's Ruling. Briefing has recently been completed in the Supreme Court. Presently, the Supreme Court has not issued a ruling or set a hearing date for the appeal. Notwithstanding, the water remains available to the Company for use at the Mt. Hope Project.

In February 2013, Great Basin Resource Watch and the Western Shoshone Defense Project filed a Complaint, and a Motion for Preliminary Injunction, against the U.S. Department of Interior and BLM in the U.S. District Court in Nevada, seeking relief under the National Environmental Protection Act and other federal laws challenging issuance of the Record of Decision (“ROD”) for the Mt. Hope Project. EMLLC has filed to intervene and its opposition to the Motion for a Preliminary Injunction. Presently the Court has not ruled or set a hearing date set for the motion. The process for issuing the ROD involved an exhaustive environmental analysis and review that lasted more than 6 years, and included extensive public and cooperating agency input. The Company supports the very robust and legally and technically defensible work completed by the BLM and believes that the ROD complies with all federal statutes and rules.

MT. HOPE PROJECT ENGINEERING AND EQUIPMENT PROCUREMENT UPDATE

Engineering efforts, which were paused in March 2009, were restarted in 2012 by M3 Engineering & Technology. Currently, engineering is approximately 64% complete at the Mt. Hope Project. Through March 31, 2013, EMLLC has made deposits of $71.0 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 entered into a letter of intent for the purchase of electric shovels.

EMLLC is planning firm orders for other mining and process equipment pending timing of full financing.

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. In the first quarter of 2013, molybdenum prices traded between $10.75 and $11.95 per pound, and are currently trading at $11.15 per pound.

Additional information on the Company's first quarter 2013 results will be available in General Moly's 2013 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)

 

March 31,
2013
(Unaudited)

December 31,
2012

ASSETS:
CURRENT ASSETS
Cash and cash equivalents $ 56,882 $ 68,331
Deposits, prepaid expenses and other current assets 1,170   136  
Total Current Assets 58,052   68,467  
Mining properties, land and water rights — Note 4 190,165 170,967
Deposits on project property, plant and equipment 70,967 69,691
Restricted cash held at EMLLC 36,000 36,000
Restricted cash held for electricity transmission 12,015 12,013
Restricted cash held for reclamation bonds 6,991 6,991
Non-mining property and equipment, net 746 605
Capitalized debt issuance costs 18,087 17,794
Other assets 2,994   2,994  
TOTAL ASSETS $ 396,017   $ 385,522  

LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST AND EQUITY:

CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 16,326 $ 10,133
Accrued advance royalties 500 500
Accrued payments to Agricultural Sustainability Trust and Hanlong 4,000 4,000
Current portion of long term debt 11,014   10,906  
Total Current Liabilities 31,840   25,539  
Provision for post closure reclamation and remediation costs 1,751 627
Deferred gain 1,000 1,100
Accrued advance royalties 5,200 4,700
Accrued payments to Agricultural Sustainability Trust 2,000 2,000
Long term debt, net of current portion 741 661
Other accrued liabilities 875   875  
Total Liabilities 43,407   35,502  
 
COMMITMENTS AND CONTINGENCIES — Note 11    
CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST 206,336   201,880  
 
EQUITY

Common stock, $0.001 par value; 200,000,000 shares authorized, 91,545,084 and 91,333,092
   shares issued and outstanding, respectively

92 91
Additional paid-in capital 272,035 270,902
Accumulated deficit before exploration stage (213 ) (213 )
Accumulated deficit during exploration and development stage (125,640 ) (122,640 )
Total Equity 146,274   148,140  

TOTAL LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST AND EQUITY

$ 396,017   $ 385,522  
 

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

(Unaudited - In thousands, except per share amounts)

     
January 1, 2002
Three Months Ended (Inception of

March 31,
2013

 

March 31,
2012

Exploration Stage)
to March 31, 2013

 
REVENUES $ $ $
OPERATING EXPENSES:
Exploration and evaluation 117 168 40,596
Write downs of development and deposits 8,819
General and administrative expense 2,522   2,925   82,897  
TOTAL OPERATING EXPENSES 2,639   3,093   132,312  
LOSS FROM OPERATIONS (2,639 ) (3,093 ) (132,312 )
OTHER INCOME / (EXPENSE)
Interest and dividend income 4,068
Interest expense (461 ) (64 ) (1,423 )
Realized gain from sale of mining properties 100     2,100  
TOTAL OTHER INCOME / (EXPENSE), NET (361 ) (64 ) 4,745  
LOSS BEFORE INCOME TAXES (3,000 ) (3,157 ) (127,567 )
Income Taxes      
CONSOLIDATED NET LOSS $ (3,000 ) $ (3,157 ) $ (127,567 )
Less: Net loss attributable to contingently redeemable noncontrolling interest     1,927  
NET LOSS ATTRIBUTABLE TO GENERAL MOLY, INC. $ (3,000 ) $ (3,157 ) $ (125,640 )
Basic and diluted net loss attributable to General Moly per share of common stock $ (0.03 ) $ (0.03 )
Weighted average number of shares outstanding — basic and diluted 91,529 91,175
 
COMPREHENSIVE LOSS $ (3,000 ) $ (3,157 ) $ (125,640 )
 

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

(Unaudited - In thousands)

     

January 1, 2002
(Inception of

Three Months Ended

Exploration
Stage) to

March 31,
2013
  March 31,
2012

March 31,
2013

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (3,000 ) $ (3,157 ) $ (127,567 )
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization 97 107 2,051
Interest expense 461 64 1,423
Equity compensation for employees and directors 848 810 19,074
(Increase) in deposits, prepaid expenses and other (1,034 ) (4 ) (1,078 )
(Decrease) increase in accounts payable and accrued liabilities (1,846 ) 18 (12,718 )
Increase (decrease) in post closure reclamation and remediation costs 1,124 (4 ) 1,542
Services and expenses paid with common stock 1,990
Repricing of warrants 965
Write downs of development and deposits 8,819
Recognition of income related to option to purchase agreement (100 ) (2,100 )
(Increase) in restricted cash held for electricity transmission (2 )   (12,015 )
Net cash used by operating activities (3,452 ) (2,166 ) (119,614 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase and development of mining properties, land and water rights (11,374 ) (3,330 ) (152,958 )
Deposits on property, plant and equipment (1,067 ) (630 ) (71,132 )
Proceeds from option to purchase agreement 3,100
Purchase of securities (137 )
(Increase) in Restricted Cash – Eureka Moly (36,000 )
(Increase) in restricted cash held for reclamation bonds (6,500 )
Cash provided by sale of marketable securities     246  
Net cash used by investing activities (12,441 ) (3,960 ) (263,381 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of stock, net of issuance costs 49 558 228,351
Net increase (decrease) in leased assets 130 (38 ) 120
Decrease (increase) in capitalized debt issuance costs (191 ) (3,909 )
Proceeds from debt 10,000
Cash proceeds from POS-Minerals Corporation 4,456 208,263
Cash paid to POS-Minerals Corporation for purchase price adjustment     (2,994 )
Net cash provided by financing activities 4,444   520   439,831  
Net (decrease) increase in cash and cash equivalents (11,449 ) (5,606 ) 56,836
Cash and cash equivalents, beginning of period 68,331   40,709   46  
Cash and cash equivalents, end of period $ 56,882   $ 35,103   $ 56,882  
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Equity compensation capitalized as development $ 237 $ 181 $ 7,334
Installment purchase of land 730
Accrued portion of equipment purchases and long lead deposits 7,534 8,593
Accrued portion of capitalized debt issuance costs 505 2,066 2,571
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 advance royalties 500 5,700
Accrued portion of payments to Agricultural Sustainability Trust & Hanlong 6,000
 

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 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 recent request for preliminary injunction and appeal of the Record of Decision, and appeal of water permits. The closing of tranche 2 of the Hanlong transaction, Hanlong's ability to procure bank financing may not be fulfilled, and the Hanlong subordinated loan is subject to 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 Moly
Investors
Scott Kozak, 303-928-8591
skozak@generalmoly.com
or
Media
Zach Spencer, 775-748-6059
zspencer@generalmoly.com
info@generalmoly.com
http://www.generalmoly.com

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