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LAKEWOOD, Colo.--(BUSINESS WIRE)--
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 $12.0 million into an escrow arrangement
for electricity transmission services.
EMLLC has now ordered or purchased most of the long-lead milling
equipment, haul trucks, mine production drills and has a letter of
intent for the purchase of two electric shovels.
Approximately 70% of the planned spend on process equipment has been
defined through hard bids and purchase orders and the cost for this
equipment is estimated to remain on budget. Further, approximately 80%
of planned spend on mining equipment has been committed with cancelable
purchase orders, the cost for which is also estimated to remain on
budget. Some of the mining equipment committed spend is subject to
Producer Price Index-based escalation and additional holding costs if
there are extended delays, and some agreements would be subject to
cancellation. The Mt. Hope Project remains in a construction-ready
status pending full project financing.
Additional information on the Company’s third quarter 2014 results will
be available in General Moly’s 2014 Form 10-Q, which will be filed with
the Securities and Exchange Commission and posted on the Company’s
website.
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GENERAL MOLY, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value amounts)
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September 30,
2014
(Unaudited)
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December 31,
2013
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ASSETS:
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CURRENT ASSETS
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Cash and cash equivalents
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$
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8,020
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$
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21,685
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Deposits, prepaid expenses and other current assets
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315
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625
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Total Current Assets
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8,335
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22,310
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Mining properties, land and water rights
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214,277
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206,251
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Deposits on project property, plant and equipment
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74,137
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74,108
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Restricted cash held at EMLLC
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36,000
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36,000
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Restricted cash held for electricity transmission
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12,021
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12,020
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Restricted cash held for reclamation bonds
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6,342
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6,332
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Non-mining property and equipment, net
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556
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669
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Other assets
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2,994
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2,994
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TOTAL ASSETS
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$
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354,662
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$
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360,684
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LIABILITIES, CRNCI, AND EQUITY:
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CURRENT LIABILITIES
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Accounts payable and accrued liabilities
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$
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4,637
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$
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4,691
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Accrued advance royalties
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500
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500
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Accrued payments to Agricultural Sustainability Trust
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2,000
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2,000
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Current portion of long term debt
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224
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263
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Total Current Liabilities
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7,361
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7,454
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Provision for post closure reclamation and remediation costs
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1,045
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1,318
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Accrued advance royalties
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5,200
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4,700
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Accrued payments to Agricultural Sustainability Trust
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2,000
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2,000
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Long term debt, net of current portion
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382
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538
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Other accrued liabilities
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875
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875
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Total Liabilities
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16,863
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16,885
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COMMITMENTS AND CONTINGENCIES
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CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST (“CRNCI”)
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209,447
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209,007
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EQUITY
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Common stock, $0.001 par value; 200,000,000 shares authorized,
91,911,607 and
91,761,249 shares issued and outstanding,
respectively
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92
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92
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Additional paid-in capital
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275,841
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273,857
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Accumulated deficit before exploration stage
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(213
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)
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(213
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Accumulated deficit during exploration and development stage
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(147,368
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)
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(138,944
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)
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Total Equity
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128,352
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134,792
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TOTAL LIABILITIES, CRNCI, AND EQUITY
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$
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354,662
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$
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360,684
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GENERAL MOLY, INC. (“GMI”)
(A DEVELOPMENT STAGE
COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
(Unaudited — In thousands, except per share amounts)
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Three Months Ended
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Nine Months Ended
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January 1, 2002
(Inception of
Exploration
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September 30,
2014
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September 30,
2013
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September 30,
2014
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September 30,
2013
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Stage) to September
30, 2014
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REVENUES
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$
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—
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$
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—
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$
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—
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$
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—
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$
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—
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OPERATING EXPENSES:
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Exploration and evaluation
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653
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366
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1,773
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699
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43,024
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General and administrative expense
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2,585
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1,429
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6,651
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6,303
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96,011
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Write-downs of development and deposits
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—
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—
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—
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—
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8,819
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TOTAL OPERATING EXPENSES
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3,238
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1,795
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8,424
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7,002
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147,854
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LOSS FROM OPERATIONS
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(3,238
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(1,795
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(8,424
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(7,002
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(147,854
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OTHER INCOME / (EXPENSE):
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Interest and dividend income
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—
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—
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—
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1
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4,070
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Interest expense
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—
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(32
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—
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(753
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)
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(1,715
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Realized gain from sale of mining properties
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—
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—
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—
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100
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3,292
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Write off of loan commitment fees (warrant)
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—
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—
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—
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(11,472
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)
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(11,472
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)
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Gain on forgiveness of debt (interest on bridge loan)
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—
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804
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—
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804
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804
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Constructive receipt of break fee
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—
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10,000
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—
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10,000
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10,000
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Write-off of debt issuance costs
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—
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(6,420
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)
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—
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(6,420
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)
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(6,420
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)
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TOTAL OTHER (EXPENSE) / INCOME , NET
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—
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4,352
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—
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(7,740
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)
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(1,441
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(LOSS)/INCOME BEFORE INCOME TAXES
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(3,238
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2,557
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(8,424
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(7,740
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)
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(149,295
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)
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Income Taxes
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—
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—
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—
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—
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—
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CONSOLIDATED NET (LOSS)/INCOME
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$
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(3,238
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)
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$
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2,557
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$
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(8,424
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)
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$
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(14,742
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)
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$
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(149,295
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Less: Net loss attributable to CRNCI
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—
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—
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—
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—
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1,927
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NET (LOSS)/INCOME ATTRIBUTABLE TO GMI
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$
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(3,238
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)
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$
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2,557
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$
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(8,424
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)
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$
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(14,742
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)
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$
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(147,368
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)
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Basic net (loss)/income attributable to GMI per share of common stock
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$
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(0.04
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)
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$
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0.03
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$
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(0.09
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)
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$
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(0.16
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)
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Weighted average number of shares outstanding — basic
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91,884
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91,562
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91,873
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91,546
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Diluted net (loss)/income attributable to GMI per share of common
stock
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|
(0.04
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)
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0.03
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(0.09
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)
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(0.16
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)
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Weighted average number of shares outstanding —diluted
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91,884
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|
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92,054
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|
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91,873
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91,546
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|
|
|
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|
|
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|
|
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|
|
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COMPREHENSIVE (LOSS)/INCOME
|
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$
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(3,238
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)
|
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$
|
2,557
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|
|
$
|
(8,424
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)
|
|
$
|
(14,742
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)
|
|
$
|
(147,368
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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GENERAL MOLY, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited — In
thousands)
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Nine Months Ended
|
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January 1, 2002
(Inception of
Exploration
Stage)
to
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September 30,
2014
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September 30,
2013
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September 30,
2014
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CASH FLOWS FROM OPERATING ACTIVITIES:
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|
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Consolidated Net Loss
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$
|
(8,424
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)
|
|
$
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(14,742
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)
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$
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(149,295
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)
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|
Adjustments to reconcile net loss to net cash used by operating
activities:
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Depreciation and amortization
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219
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290
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|
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2,514
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|
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Interest expense
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|
—
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|
|
751
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|
|
1,715
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Stock-based compensation for employees and directors
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1,405
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|
1,425
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|
|
21,460
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Decrease (increase) in deposits, prepaid expenses and other
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310
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|
|
(325
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)
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|
(223
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)
|
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Increase (decrease) in accounts payable and accrued liabilities
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|
663
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|
|
(8,435
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)
|
|
(18,379
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)
|
|
(Increase) in restricted cash held for electricity transmission
|
|
|
(1
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)
|
|
(7
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)
|
|
(12,021
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)
|
|
(Decrease) increase in post closure reclamation and remediation costs
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|
|
(273
|
)
|
|
1,027
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|
|
836
|
|
|
Realized gain related to sale of mining properties
|
|
|
—
|
|
|
(100
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)
|
|
(3,292
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)
|
|
Write off of loan commitment fees (warrant)
|
|
|
—
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|
|
11,472
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|
|
11,472
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|
|
Gain on forgiveness of debt (interest on bridge loan)
|
|
|
—
|
|
|
(804
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)
|
|
(804
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)
|
|
Constructive receipt of break fee
|
|
|
—
|
|
|
(10,000
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)
|
|
(10,000
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)
|
|
Write-off of debt issuance costs
|
|
|
—
|
|
|
6,420
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|
|
6,420
|
|
|
Write downs of development and deposits
|
|
|
—
|
|
|
—
|
|
|
8,819
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|
|
Services and expenses paid with common stock
|
|
|
—
|
|
|
—
|
|
|
1,990
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|
|
Warrant repricing
|
|
|
—
|
|
|
—
|
|
|
965
|
|
|
Net cash used by operating activities
|
|
|
(6,101
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)
|
|
(13,028
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)
|
|
(137,823
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)
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CASH FLOWS FROM INVESTING ACTIVITIES:
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|
|
|
|
|
|
|
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|
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Purchase and development of mining properties, land and water rights
|
|
|
(7,042
|
)
|
|
(31,896
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)
|
|
(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.
|
|