GENERAL MOLY
ANNOUNCES ARCELORMITTAL TO WAIVE ANTI-DILUTION RIGHTS FOR HANLONG TRANSACTION
General Moly Grants
an Option for an Extension Molybdenum Supply Agreement
LAKEWOOD, COLORADO � April 19, 2010, General Moly (NYSE
Amex and TSX: GMO) announced that the Company and ArcelorMittal have entered
into a Consent and Waiver Agreement (the "Agreement") whereby
ArcelorMittal will waive its anti-dilution rights with respect to the Company's
proposed issuance of stock under the Hanlong investment announced March 5,
2010. ArcelorMittal will retain anti-dilution rights for future issuances
of Company stock outside of shares sold under the Hanlong investment.
ArcelorMittal and the
Company have also entered into an Extension Molybdenum Supply Agreement (the
"Extension Agreement"). The Extension Agreement provides
ArcelorMittal a five-year option to make effective an agreement to purchase
from General Moly 3 million pounds of molybdenum per year for 10 years
following the expiration of the current 5 year, 6.5 million annual pound
agreement. This additional optional off-take will be priced in
alignment with the Company's existing supply agreements.
In order for ArcelorMittal to exercise this option and make the Extension
Agreement effective, ArcelorMittal must have beneficial ownership of more than
11,100,000 shares of General Moly Common Stock on or prior to April 15,
2015. ArcelorMittal is currently the Company's largest shareholder and owns
8,256,699 shares originating from a November 2007 private placement.
Bruce D. Hansen, Chief Executive Officer of General Moly said, "We
appreciate ArcelorMittal's support for the Hanlong transaction and our
continued strong relationship with ArcelorMittal as both a significant
shareholder and off-take partner. This arrangement meets our needs in
regard to the Hanlong transaction while avoiding the additional dilution that
would have resulted from an exercise of ArcelorMittal's anti-dilution rights."
Pursuant to the terms of the Bridge Loan between the Company and Hanlong,
the Company was required to obtain ArcelorMittal's election with regard to its
anti-dilution rights and Hanlong was required to obtain approval from the
Sichuan Branch of the Chinese State Administration of Foreign Exchange (SAFE),
prior to the first $10 million tranche of the Bridge Loan becoming
effective. With the completion of the Consent and Waiver Agreement, both
of these conditions have been met and the Company anticipates drawing the first
tranche of the Bridge Loan within the next two weeks.
The Company's second largest shareholder, Coghill Capital Management,
provided substantial advice and support to the Company in completing the two
agreements with ArcelorMittal. In recognition of that support, the
Company is amending the warrant to purchase one million shares of General Moly
originally issued to Coghill Capital Management in connection with the November
2007 ArcelorMittal private placement and moly supply agreement to reduce the exercise
price of that warrant from $10.00 per share to $5.00 per share. The
warrant remains exercisable once General Moly has received financing necessary
for the commencement of commercial production at the Mt. Hope project and will
expire one year thereafter. It will also become exercisable in the event
of certain corporate reorganizations.
* * * *
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.
Contact Information � General Moly:
Investors � Seth
Foreman
(303) 928-8591
sforeman [AT] generalmoly.com
Business Development � Greg
McClain
(303)
928-8601
gmcclain [AT] generalmoly.com
Website: http://www.generalmoly.com
info@generalmoly.com
