General
Moly, Inc. (the "Company" or “General Moly”) (NYSE MKT: GMO)(TSX:
GMO), a U.S.-based molybdenum mineral development, exploration, and
mining company, announced an agreement with POS-Minerals Corporation,
which owns a 20% interest in the Mt. Hope Project, to use restricted
cash of up to $36 million held in a reserve account for the benefit of
the Mt. Hope Project. The Company, through its wholly owned subsidiary,
Nevada Moly, LLC and POS-Minerals, as the members of Eureka Moly, LLC
(“EMLLC”), will use the restricted cash to fund the Mt. Hope Project’s
financial requirements until exhausted or the Company’s full financing
for construction of the Mt. Hope Mine is achieved. Any remaining balance
of restricted cash at the time of financing will be returned to the
Company.
In December 2012, the Company and POS-Minerals, as the members of EMLLC,
agreed to hold, as restricted cash, $36 million due to the Company, of
the approximately $100 million received from POS-Minerals’ December 2012
capital contributions. These funds were to be held in a reserve account
until the Company arranged full project financing for its 80% share of
Mt. Hope Project construction cost, or until the EMLLC management
committee agreed to release the funds.
The jointly developed revised long-term budget to maintain the Mt. Hope
Project in its permitted, construction-ready status will be entirely
funded by the reserve account, until at least through 2020, covering
anticipated operating expenses, and committed equipment purchase
obligations unless the Company’s full financing is obtained.
Bruce D. Hansen, Chief Executive Officer, said, “This agreement,
combined with the recently announced $8.5 million private
placement financing that closed in December 2014, provides the
Company with a significantly improved project and corporate liquidity
profile as we bridge to a project financing for Mt. Hope, while at the
same time minimizing the dilution to our shareholders. We want to thank
POS-Minerals for their continued financial support and partnership.”
Mr. Hansen continued, “We remain confident in the progress being made
toward full Mt. Hope Project financing. Negotiations on investment
agreement terms, sponsorship requirements, and indicative loan terms
associated with a $700 to $750 million debt and equity package, are
continuing to advance. We have strong interest from multiple private
Chinese industrial companies and a large Chinese bank in advancing the
fully permitted, construction-ready project.”
Mr. Hansen concluded, “We are pleased with recent advancements in our
financing efforts, and the use of reserve account restricted cash to
provide the funding necessary to maintain our permits at the Mt. Hope
site and other care and maintenance needs. Access to the reserve account
substantially enhances the Company’s ability to support the Mt. Hope
Project and manage market uncertainty while preserving the ability to
rapidly restart construction activities when full financing for Mt. Hope
is achieved.”
The reserve account held by EMLLC will initially fund a reimbursement of
contributions made by the members during the 4th quarter of 2014,
inclusive of $0.7 million to POS-Minerals and $2.7 million to General
Moly. Combined with cash already on hand, and the proceeds from the
December 2014 private placement financing, the Company has augmented its
unrestricted cash balance, used for funding non-Mt. Hope related
spending, to over $15 million as of mid-January 2015.
With the agreement, the members of the EMLLC also agreed to a fixed date
for POS-Minerals' contractual right to receive a $36 million return on
previous capital contribution to the Project, as a result of Commercial
Production, as defined by the EMLLC Agreement, being delayed beyond
December 31, 2011. Under the new agreement, the members fixed a date of
December 31, 2020, subject to the members’ ability to further extend
payment, for EMLLC to return $36 million of POS-Minerals’ previous
capital contributions to EMLLC. Previously, the EMLLC Agreement provided
that the return of capital contribution was tied to achievement of
Commercial Production at the Mt. Hope Project. The Company is obligated
to fund the return of capital contribution when paid or alternatively to
permit a corresponding dilution of its membership interest, as permitted
by the EMLLC Agreement currently estimated in the range of 4% to 5% of
the joint venture.
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.
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