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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 second
quarter ended June 30, 2015. Net loss for the three months ended June
30, 2015 was $6.8 million ($0.07 per share), compared to a loss of $2.8
million ($0.03 per share) for the year ago period.
Excluding restricted cash, the Company’s cash balance at June 30, 2015
was $18 million compared to $13 million at December 31, 2014 and $16
million at March 31, 2015. In June 2015, General Moly announced an agreement
which will allow the transition to the provider’s network services by
terminating the existing third-party transmission contracts to provide
power to the Mt. Hope Project. With the agreement, Eureka Moly, LLC
(“EMLLC”), of which General Moly is an 80% member, received a return of
approximately $7.9 million net of termination costs, expenses and
consideration to the transmission providers. In January 2015, the
Company and POS-Minerals Corporation (“POS-Minerals”), as the members of
EMLLC, announced an agreement
that provided access to the $36 million reserve account for Mt. Hope
dedicated spend. During the second quarter, cash use of $6 million was
the result of $3 million spent on Mt. Hope Project development costs
(including owner’s cost, reclamation bond premiums and $2 million
towards completing the purchase of electrical transformers) and $3
million in general and administrative expenses. With the jointly
developed revised long-term budget to maintain the Mt. Hope Project in
its permitted, construction ready status, the EMLLC members agreed in
January that the budget will be entirely funded by the reserve account,
until at least through 2020. Thus, the reserve account should cover
anticipated operating expenses, and committed equipment purchase
obligations until the Company’s full financing for the Mt. Hope Project
construction is obtained.
In April 2015, General Moly announced an Investment
and Securities Purchase Agreement with AMER
International Group (“AMER”), a private, China-based multinational
company that is one of the world’s largest advanced materials, fine
machining, and downstream metals refining providers, (ranked #295 on the
2014 Fortune Global 500 list), to create a strategic partnership and
equity investment to assist with General Moly’s ability to secure full
project financing for the Mt. Hope Project.
Bruce D. Hansen, Chief Executive Officer, said, “The Company made
significant strides to advance development of the fully permitted Mt.
Hope Project and improve our liquidity profile in the second quarter.
AMER is an enthusiastic and committed partner who will become a major
shareholder of General Moly and has agreed to work with the Company to
procure and ultimately guarantee a senior secured term loan of
approximately $700 million for development of the Mt. Hope Project.”
Mr. Hansen continued, “The proceeds from the termination of the
transmission agreement, combined with the previously announced $8.5
million private
placement financing and a January agreement with POS-Minerals
Corporation to use restricted cash of up to $36 million for the benefit
of the Mt. Hope Project, provides the Company with a significantly
improved project and corporate liquidity profile, even before
considering the funding anticipated from the closing of the AMER
transaction, while fully maintaining the Mt. Hope Project’s
construction-ready status.”
Mr. Hansen concluded, “The Company remains focused on procuring full
construction financing for the Mt. Hope Project. Given that the
transaction with AMER was recently approved
at our Annual Meeting of Stockholders, we are coordinating closely to
address the remaining conditions for closing the Investment and
Securities Purchase Agreement. When this is complete, the Company will
begin leveraging AMER’s equity investment and debt capacity to further
advance financing for the Mt. Hope Project.”
STRATEGIC PARTNERSHIP WITH AMER INTERNATIONAL GROUP
On April 17, 2015, the Company and AMER announced an Investment and
Securities Purchase Agreement that will also create a strategic
partnership and equity investment to assist with General Moly’s ability
to secure full project financing for the Mt. Hope Project. Pursuant to
the Investment and Securities Purchase Agreement, AMER agreed to
purchase 40 million common shares of General Moly, priced using the
trailing 90-day volume weighted average price (“VWAP”) of $0.50 on April
17, 2015.
Upon closing of the equity investment, AMER and General Moly will also
enter into a stockholder agreement allowing AMER to nominate two
Directors to General Moly’s then eight member Board of Directors. After
drawdown of the Mt. Hope project financing loan, AMER will nominate a
third director to General Moly’s then seven member Board of Directors.
The stockholder agreement will also relate to, among other things,
AMER’s ability to acquire and transfer General Moly shares.
AMER has agreed to work with General Moly to procure and support a Bank
Loan of approximately $700 million from one or more major Chinese banks
for development of the Mt. Hope Project. AMER will guarantee the Mt.
Hope project financing loan, which is anticipated to have normal and
customary covenants and security arrangements.
When drawdown of the approximately $700 million Bank Loan becomes
available and documentation is complete, warrants to purchase 80 million
common shares of General Moly will vest and become exercisable by AMER
using the trailing 90-day VWAP of $0.50 from the date the investment
agreement was signed. All conditions to complete the warrants
transaction must be completed no later than April 17, 2017.
AMER and General Moly also agreed on terms to a definitive agreement
that would provide a one-time option exercisable simultaneously with
Bank Loan execution to purchase the balance of General Moly’s share of
Mt. Hope molybdenum production, estimated to be approximately 16.5
million pounds annually, for the first five years of production, and 70%
of General Moly’s annual share of Mt. Hope molybdenum production
thereafter at a cost of spot price less a slight discount.
MT. HOPE PROJECT ENGINEERING AND EQUIPMENT PROCUREMENT UPDATE
Engineering is approximately 65% complete at the Mt. Hope Project.
Through June 30, 2015, EMLLC has made deposits of $85.5 million on
equipment orders compared to $74.2 million at the end of 2014.
EMLLC has now ordered or purchased most of the long-lead milling
equipment, haul trucks and mine production drills, and has a letter of
intent for the purchase of two electric shovels.
EMLLC continues to work with long-lead vendors to manage the timing of
contractual payments for milling and electrical equipment. In April
2015, EMLLC made a $2.4 million payment due to the manufacturer of two
230kV primary transformers. The payment was funded with cash from the
EMLLC reserve account described above. Final payments against milling
and electrical equipment orders totaling $2.0 million are expected to be
made by early 2017.
Approximately 70% of the planned spend on process equipment has been
defined through hard bids and purchase orders and the cost for this
equipment is estimated to remain on budget. Further, approximately 80%
of planned spend on mining equipment has been committed with cancelable
purchase orders, the cost for which is also estimated to remain on
budget. Some of the mining equipment committed spend is subject to
Producer Price Index-based escalation and additional holding costs if
there are extended delays, and some agreements would be subject to
cancellation. The Mt. Hope Project remains in a construction-ready
status pending full project financing.
Additional information on the Company’s second quarter 2015 results will
be available in General Moly’s 2015 Form 10-Q, which will be filed with
the Securities and Exchange Commission and posted on the Company’s
website.
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GENERAL MOLY, INC. CONSOLIDATED BALANCE SHEETS (In
thousands, except par value amounts)
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June 30, 2015 (Unaudited)
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December 31, 2014
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ASSETS:
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CURRENT ASSETS
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Cash and cash equivalents
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$
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17,963
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$
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13,269
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Deposits, prepaid expenses and other current assets
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737
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698
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Total Current Assets
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18,700
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13,967
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Mining properties, land and water rights
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218,767
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216,595
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Deposits on project property, plant and equipment
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85,452
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74,151
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Restricted cash held at EMLLC
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17,880
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36,000
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Restricted cash held for electricity transmission
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—
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12,021
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Restricted cash held for reclamation bonds
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5,004
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5,358
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Non-mining property and equipment, net
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444
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519
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Debt Issuance Costs
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202
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441
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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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349,443
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$
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362,046
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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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2,485
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$
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4,633
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Accrued advance royalties
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500
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500
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Current portion of long term debt
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255
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290
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Total Current Liabilities
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3,240
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5,423
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Provision for post closure reclamation and remediation costs
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1,260
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1,276
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Accrued advance royalties
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5,200
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5,200
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Accrued payments to Agricultural Sustainability Trust
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4,000
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4,000
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Long term debt, net of current portion
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1,518
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249
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Senior Convertible Promissory Notes
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5,596
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7,763
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Return of Contributions Payable to POS-Minerals
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33,884
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—
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Other accrued liabilities
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1,125
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1,125
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Total Liabilities
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55,823
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25,036
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COMMITMENTS AND CONTINGENCIES
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CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST (“CRNCI”)
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174,864
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210,317
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EQUITY
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Common stock, $0.001 par value; 200,000,000 shares authorized,
95,720,021 and 92,200,657 shares issued and outstanding, respectively
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96
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92
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Additional paid-in capital
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279,363
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276,718
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Accumulated deficit during exploration and development stage
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(160,703
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)
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(150,117
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)
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Total Equity
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118,756
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126,693
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TOTAL LIABILITIES, CRNCI, AND EQUITY
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$
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349,443
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$
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362,046
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GENERAL MOLY, INC. CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS (In thousands,
except per share amounts)
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Three Months Ended
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Six Months Ended
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June 30, 2015
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June 30, 2014
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June 30, 2015
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June 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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OPERATING EXPENSES:
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Exploration and evaluation
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277
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986
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394
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1,120
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General and administrative expense
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2,007
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1,841
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4,994
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4,066
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TOTAL OPERATING EXPENSES
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2,284
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2,827
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5,388
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5,186
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LOSS FROM OPERATIONS
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(2,284
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)
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(2,827
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)
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(5,388
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)
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(5,186
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)
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OTHER INCOME / (EXPENSE):
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Loss on Termination of Power Transmission Contract
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(4,317
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—
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(4,317
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)
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—
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Loss on Extinguishment of Senior Convertible Notes
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(810
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)
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—
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(930
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)
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—
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Interest expense
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(275
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)
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—
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(836
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)
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—
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TOTAL OTHER (EXPENSE) / INCOME, NET
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(5,402
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—
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(6,083
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—
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LOSS BEFORE INCOME TAXES
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(7,686
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(2,827
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(11,471
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)
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(5,186
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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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CONSOLIDATED NET LOSS
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$
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(7,686
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$
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(2,827
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$
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(11,471
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$
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(5,186
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Less: Net loss attributable to CRNCI
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875
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—
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885
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—
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NET LOSS ATTRIBUTABLE TO GMI
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$
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(6,811
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$
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(2,827
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$
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(10,586
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$
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(5,186
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Basic and diluted net loss attributable to GMI per share of common
stock
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$
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(0.07
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$
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(0.03
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$
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(0.11
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$
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(0.06
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Weighted average number of shares outstanding — basic and diluted
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95,020
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91,873
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94,041
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91,868
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COMPREHENSIVE LOSS
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$
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(6,811
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)
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$
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(2,827
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)
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$
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(10,586
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)
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$
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(5,186
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GENERAL MOLY, INC. CONSOLIDATED STATEMENTS OF
CASH FLOWS (In thousands)
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Six Months Ended
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June 30, 2015
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June 30, 2014
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Consolidated Net Loss
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$
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(11,471
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$
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(5,186
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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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120
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146
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Non-cash Interest expense
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445
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—
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Stock-based compensation for employees and directors
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592
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1,023
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Loss on Termination of Power Transmission Contract
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218
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—
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Loss on Extinguishment of Senior Convertible Notes
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930
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—
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(Increase) decrease in deposits, prepaid expenses and other
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(39
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)
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82
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(Decrease) increase in accounts payable and accrued liabilities
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(2,111
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)
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326
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(Decrease) in post closure reclamation and remediation costs
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(53
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)
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(273
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)
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Net cash used by operating activities
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(11,369
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)
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(3,882
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)
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CASH FLOWS FROM INVESTING ACTIVITIES:
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Purchase and development of mining properties, land and water rights
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(2,259
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)
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(4,980
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)
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Deposits on property, plant and equipment
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(11,315
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)
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(576
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)
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Decrease in restricted cash
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30,495
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(17
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)
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Net cash provided (used) by investing activities
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16,921
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(5,573
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Cash contributions (returned to)/received from POS-Minerals
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(684
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)
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144
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Repayment of Long-Term Debt
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(106
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)
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(128
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)
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Stock proceeds, net of issuance costs
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(68
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)
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(4
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)
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Net cash (provided by) used in financing activities
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(858
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)
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12
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Net increase (decrease) in cash and cash equivalents
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4,694
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(9,443
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)
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Cash and cash equivalents, beginning of period
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13,269
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21,685
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Cash and cash equivalents, end of period
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$
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17,963
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$
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12,242
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NON-CASH INVESTING AND FINANCING ACTIVITIES:
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Equity compensation capitalized as development
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$
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139
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$
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463
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Change in accrued portion of deposits on property, plant and
equipment
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(14
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)
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(552
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)
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Conversion of Senior Convertible Promissory Notes
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(2,488
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)
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—
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Non-Convertible Senior Promissory Notes Issued
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1,340
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|
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—
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Return of Contributions payable to POS-Minerals
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36,000
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—
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Reduction in Return of Contributions payable to POS-Minerals
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(2,116
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)
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—
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Write off of debt issuance costs
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(115
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)
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—
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Accrued portion of interest on convertible notes
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23
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—
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Accrued portion of Advance Royalties
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—
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500
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* * * *
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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150804005387/en/
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