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 today the completion of an updated Pre-Feasibility Study
(“PFS”) for its 100%-owned Liberty Project. This PFS, prepared by
Independent Mining Consultants, Inc. (“IMC”) with capital estimates from
M3 Engineering & Technology Corporation, estimates production, capital,
operating cost, and economic analysis for this more capital efficient
project when compared to earlier studies. A technical report prepared in
accordance with National Instrument 43-101 Standards of Disclosure for
Mineral Projects (“NI 43-101”) of the Canadian Securities Administration
containing further information on the Liberty Project will be filed
shortly with the System for Electronic Document Analysis and Retrieval
(“SEDAR”), the document filing and retrieval system operated by the
Canadian Securities Administrators for public companies with securities
listed in Canada, under the Company’s issuer profile on SEDAR at www.sedar.com.
The Liberty Project is located 20 miles north of Tonopah, Nevada.
KEY PRE-FEASIBILITY STUDY HIGHLIGHTS
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Total capital costs to construct the project are estimated at $366
million, reflecting the use of extensive existing infrastructure.
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Sustaining capital costs are estimated at $224 million over the
Liberty Project’s 32 year life of mine (“LOM”).
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For the first five full years of production:
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annual salable production of approximately 14.0 million pounds of
molybdenum and 7.5 million pounds of copper per year is expected
based on a mill capacity to process 26,500 tons per day;
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average on-site cash costs of $6.32 per pound are expected, using
copper as a by-product credit; and
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total cash costs of $7.79 per pound are expected, which includes
off-site roasting, smelting, and shipping costs.
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The updated mine plan results in a total of 402 million pounds of
molybdenum and 308 million pounds of copper to be produced during the
LOM, with total contained molybdenum grade of 0.078% and total
contained copper grade of 0.098%.
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The Liberty Project generates an after tax net present value (“NPV”)
at an 8% discount rate of $325 million, and an internal rate of return
(“IRR”) of 17.4%, assuming toll roasting, based on a long-term
molybdenum price of $15.00 per pound and a long-term copper price of
$3.25 per pound.
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There is the potential to increase the Liberty Project’s NPV and IRR
on the basis that molybdenum concentrates from the Liberty Project
could be toll roasted at the Mt. Hope Project, once constructed, which
could increase the after tax NPV of the Liberty Project to 18.4%, and
decrease total cash costs to $7.41 per pound for the first five full
years of production.
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The Liberty Project has an after tax NPV breakeven molybdenum price of
$11.64 per pound, at an 8% discount rate, and a non-discounted cash
flow breakeven molybdenum price of $9.58 per pound.
Bruce D. Hansen, Chief Executive Officer of General Moly, said, “This
Pre-Feasibility Study confirms the economically robust nature of the
Liberty Project. In addition, there are many significant attributes
including its secure Nevada jurisdiction, substantial existing
infrastructure, and long life. This analysis also details our plan to
build the Liberty Project at a low initial capital cost of $366 million,
with 26,500 ton per day mill throughput. This represents a 39% reduction
from the approximate $600 million (in 2011 dollars) capital cost
estimate in our November,
2011 Liberty Pre-Feasibility Study, which had planned for a 36,000
ton per day mill throughout, while maintaining a similar ratio for after
tax NPV to initial capital and slightly improved ratio of annual
molybdenum production to initial capital. The updated mine plan allows
us to leverage significant existing infrastructure to reduce initial
capital costs while retaining the capability to expand post startup and
reduce operating costs. Liberty provides significant optionality and
flexibility to develop at a low entry capital investment relative to its
NPV. We look forward to advancing the project through full feasibility
and permitting and anticipate that these results will demonstrate,
through an updated low capital scenario, the inherent value of Liberty
to shareholders and potential strategic investors.”
Mr. Hansen added, “Depending on market conditions and financing options,
Liberty could be advanced through a Feasibility Study (“FS”) as early as
end of year 2015, with the potential to initiate construction as early
as late 2017 under Nevada state permits, with production to follow in
late 2019. Full realization of the economics of this Pre-Feasibility
Study are partly dependent on the ultimate receipt of a federal
Environmental Impact Statement record of decision (“ROD”) at the start
of production as a portion of the project is located on federal land,
but a less favorable economic plan could be executed solely on private
land for a few years, should there be a delay in receiving the ROD. This
permitting option provides further flexibility and schedule upside. We
expect the FS would focus on improving the project economics based on
further drilling, sampling, and metallurgical testing to drive the
potential for higher mill throughput, process recovery, and more optimal
mine plan options.”
Mr. Hansen concluded, “Even as we advance the Liberty Project, we are
aggressively pursuing full financing alternatives for our 80% owned Mt.
Hope Project, and continue to have substantive dialogue with potential
partners who could support a debt package to provide the bulk of the
capital requirements of the Mt. Hope Project.”
DEVELOPMENT ANALYSIS MOLYBDENUM AND COPPER PRODUCTION RATES
The Liberty Project is expected to produce an annual average of 14.0
million pounds of molybdenum and 7.5 million pounds of copper over the
first five years of operations and is estimated to average 12.6 million
pounds of molybdenum and 9.6 million pounds of copper annually over the
LOM. Additional operating parameters are set forth in the table below.
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First 5 Years
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First 10 Years
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LOM
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Average Mill Mo Grade
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%tMo1
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0.090%
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0.087%
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0.078%
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Average Mill Cu Grade
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%tCu2
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0.074%
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0.068%
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0.098%
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Mill Molybdenum Recovery (total Mo content)
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%
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83.5%
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84.6%
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84.0%
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Downstream Molybdenum Recovery
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%
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99.0%
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99.0%
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99.0%
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Total Molybdenum Recovery
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%
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82.6%
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83.7%
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83.2%
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Mill Copper Recovery (total Cu content)
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%
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56.0%
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55.5%
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53.6%
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Downstream Copper Recovery
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%
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95.1%
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95.1%
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95.1%
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Total Copper Recovery
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%
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53.3%
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52.7%
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50.9%
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Salable Molybdenum
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M lb/y
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14.0
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13.9
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12.6
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Salable Copper
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M lb/y
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7.5
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6.9
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9.6
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Salable Molybdenum
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M lb
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70
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139
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402
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Salable Copper
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M lb
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37
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69
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308
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1 Total molybdenum concentration.
2 Total
copper concentration.
PROJECT ECONOMICS
The Liberty Project remains more sensitive to changes in molybdenum
price than to changes in copper price. The table below tables
illustrates the after tax NPV in millions of U.S. dollars and IRR return
calculated at a variety of molybdenum and copper prices. All figures are
calculated at an 8% discount rate. Baseline project economics for both
scenarios were calculated using $15.00 per pound molybdenum and $3.25
per pound copper.
NPV (after tax) at 8% ($Millions)
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Molybdenum Price, $/lb
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$10.00
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$12.50
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$15.00
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$17.50
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$20.00
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Copper
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$2.50
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($235)
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$34
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$276
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$511
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$744
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Price
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$2.75
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($214)
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$51
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$292
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$527
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$759
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$/lb
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$3.00
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($193)
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$68
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$309
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$543
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$775
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$3.25
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($172)
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$85
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$325
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$559
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$791
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$3.50
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($152)
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$102
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$341
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$575
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$806
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$3.75
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($134)
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$119
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$358
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$591
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$822
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IRR
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Molybdenum Price, $/lb
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$10.00
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$12.50
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$15.00
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$17.50
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$ 20.00
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Copper
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$2.50
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-1.0%
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9.1%
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16.2%
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22.4%
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28.1%
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Price
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$2.75
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0.2%
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9.6%
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16.6%
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22.8%
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28.4%
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$/lb
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$3.00
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1.3%
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10.1%
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17.0%
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23.1%
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28.7%
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$3.25
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2.3%
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10.6%
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17.4%
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23.4%
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29.0%
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$3.50
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3.0%
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11.1%
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17.8%
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23.8%
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29.3%
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$3.75
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3.7%
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11.6%
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18.1%
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24.1%
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29.6%
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CAPITAL AND OPERATING COSTS
Constructing the Liberty Project is anticipated to cost approximately
$366 million (2014 dollars), as set forth in the table below.
Area
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Capital
$000s
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Mine Civil and Equipment
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$36,055
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Plant Equipment, Construction, EPCM, and Contingency
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$279,521
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Pre-production Stripping
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$16,956
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Owner's Cost
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$26,666
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Subtotal
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$359,198
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Reclamation Bond Collateral
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$5,800
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Pre-paid Power
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$1,400
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Subtotal
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$7,200
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Total Initial Capital
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$366,398
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The capital estimate contains $51 million in contingency. Sustaining
capital costs for the Liberty Project are expected to be $224 million
over the LOM, primarily for mining equipment replacement and tailings
dam expansions.
On the basis of salable molybdenum, the cash cost for the first five
years of production (net of copper credit) is expected to be $7.79 per
pound of salable molybdenum.
$/lb Molybdenum
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First 5 Years
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First 10 Years
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LOM
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Mining
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$3.52
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$3.84
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$3.75
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Milling
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$3.88
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$3.90
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$4.34
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Laboratory
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$0.10
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$0.10
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$0.11
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Site G&A (includes reclamation bond policy)
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$0.55
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$0.55
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$0.58
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Copper Credit
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($1.73)
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($1.60)
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($2.49)
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At Site Operating Cost
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$6.32
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$6.80
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$6.29
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Roasting, Shipping, Marketing, Copper TC/RCs
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$1.47
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$1.44
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$1.65
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Total Operating Cost Net of Copper Credit
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$7.79
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$8.25
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$7.94
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MINERAL RESERVES AND MINERAL RESOURCES
The Liberty's Project’s Mineral Reserves and Mineral Resources,
determined in accordance with NI 43-101, are set forth in the tables
below. These tables reflect material changes to the previous Mineral
Reserves and Mineral Resource that were announced by the Company in
November, 2011. The changes to Mineral Reserves and Mineral Resources
are due to:
1) updated geologic interpretation;
2) more detailed incorporation
of a copper zone that is included within the Liberty Project’s
molybdenum pit;
3) conversion to 40 foot benches rather than the
previous 50 foot benches;
4) updated estimates of mine and process
costs; and
5) updated estimates of process recoveries, particularly
for contained copper.
MINERAL RESERVES, AS PER NI 43-101 DEFINITIONS
Category
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Ktons
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Total Mo
Grade (%)
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Total Cu
Grade (%)
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Lb Moly Contained (millions)
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Lb Cu
Contained (millions)
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Saleable
Moly Lb
(millions)
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Saleable
Copper Lb
(millions)
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Proven
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92,489
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0.101
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0.056
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187
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104
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NA
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NA
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Probable
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216,727
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0.068
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0.116
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295
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503
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NA
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NA
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Proven & Probable
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309,216
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0.078
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0.098
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482
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606
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402
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308
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Notes:
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1)
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Cutoff Grade is $8.83 NSR / ton, based on metal prices of $12.00 per
pound molybdenum and $3.00 per pound copper.
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2)
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Mineral Reserves are based on the total of all Proven and Probable
Material Reserves planned for processing within the mine plan.
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3)
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Table figures may not add due to rounding.
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4)
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Tons are U.S. short tons.
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MINERAL RESOURCES, AS PER NI 43-101 DEFINITIONS: MINERAL RESOURCES DO
CONTAIN THE ABOVE MINERAL RESERVES
Category
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Ktons
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Total Mo
Grade (%)
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Total Cu
Grade (%)
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Lb Moly Contained (millions)
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Lb Cu
Contained (millions)
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Measured
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125,538
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0.093
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0.051
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233.5
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128.0
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Indicated
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440,621
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0.060
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0.094
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528.7
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828.4
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Measured & Indicated
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566,159
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0.067
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0.084
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762.2
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956.4
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Inferred
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148,598
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0.052
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0.115
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154.5
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341.8
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Notes:
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1)
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Cutoff Grade is $7.05 NSR / ton, based on metal prices of $15.00 per
pound molybdenum and $3.00 per pound copper.
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2)
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Mineral Resources on the table above include the mineral reserve.
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3)
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Mineral Resources are contained within a computer generated pit and
meet the requirements for reasonable expectation of economic
extraction.
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4)
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Table figures may not add due to rounding.
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5)
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Tons are U.S. short tons.
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6)
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Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability.
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The scientific and technical information contained in this news release
has been approved and verified by John M. Marek, P.E., President of
Independent Mining Consultants Inc., for matters relating to Mineral
Reserves, Mineral Resources, and mine production as well as Gabriel A.
Secrest, P.E., Project Manager at M3 Engineering and Technology Corp.,
for matters relating to project capital cost, infrastructure and plant
production. Mr. Marek and Mr. Secrest are independent Qualified Persons
for the purposes of National Instrument 43-101.
ABOUT THE LIBERTY PROJECT
The Liberty Project has significant infrastructure already in place,
including a truck shop, offices, tailing dam, laboratory, and previously
mined open pit. The site is accessed through paved roads, has fully
permitted water rights, and sits adjacent to utility power. The previous
mining operations, by Anaconda and Cyprus Minerals, provided significant
operating history to validate mining and metallurgical performance. The
site is largely on privately held ground, has no royalties, and provides
an opportunity for initial permitting under Nevada State agencies,
potentially avoiding lengthier federal upfront permitting. However,
federal permits will be required to fully exploit the mineral potential
due to Bureau of Land Management holdings near the mine and stockpiles.
****
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 is 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.
Cautionary Note to U.S. Investors Concerning Estimates of Reserves
and Resources
Calculations with respect to "proven reserves" and "probable reserves"
referred to above have been made in accordance with, and using the
definitions of NI 43-101, as required by Canadian securities regulatory
authorities. For United States reporting purposes, the U.S. SEC applies
a different standard in order to classify mineralization as a "reserve".
Under SEC standards, mineralization may not be classified as a "reserve"
unless the determination has been made that the mineralization could be
economically and legally extracted or produced at the time the reserve
determination is made. No such determinations have been made with
respect to any mineralization at the Liberty project, and it cannot be
assured that such a determination will be made. This release also uses
the terms “measured”, “indicated” and “inferred” resources. We caution
U.S. investors that while such terms are recognized and required by
Canadian Securities Administrators pursuant to the NI 43-101, the SEC
does not recognize them. U.S. investors are cautioned not to assume that
any part of or all mineral deposits in these categories will ever be
converted into reserves. “Inferred Resources”, in particular, have a
great amount of uncertainty as to their existence, and great uncertainty
as to their economic and legal feasibility. It cannot be assumed that
all or any part of an Inferred Mineral Resource will ever be upgraded to
a higher category. Under Canadian Securities Administration rules,
estimates of Inferred Mineral Resources may not form the basis of
feasibility or pre-feasibility studies. U.S. investors are cautioned not
to assume that part or all of an inferred resource exists, or is
economically or legally minable.