LAKEWOOD, Colo., March 16, 2017 /PRNewswire/ -- General Moly,
Inc. (the "Company" or "General Moly") (NYSE MKT and TSX: GMO)
announced its financial results for the fourth quarter and full
year ended December 31, 2016
today. The Company entered 2017 with a cash balance of
approximately $8.5 million at
year-end 2016. The Company is well positioned with financial
liquidity to fund its current business activities and working
capital needs into the second quarter of 2018.
Fourth quarter and year-to-date highlights:
- The Company lowered the quarterly cash burn rate for Corporate
and Liberty Project costs by 20%, from the previous two years'
$1.9M quarterly average to an
estimated $1.5 million per quarter
going forward in 2017. The Company forecasts that it has the
ability to fund its current business plans and working capital into
the second quarter of 2018, excluding potential additional equity
investments from AMER International Group Inc. ("AMER") or other
potential strategic partners;
- At the Mt. Hope Project, our 80% owned joint venture
operating company Eureka Moly, LLC ("EMLLC") ended 2016 with a
balance of $13.0 million (100% basis)
in a cash reserve account, and remains self-funded through 2021
based on projected care and maintenance expenses. EMLLC also
received a net refund of $4.3 million
(100% basis) in February 2016 from a
reduction in reclamation funding requirements.
The Company reported a net loss for the three months ending
December 31, 2016 of $1.9 million ($0.02
per share), compared to a net loss of $2.0
million ($0.02 per share) for
the same prior year period. The decrease in quarterly net loss was
primarily due to the Company's ongoing cost-cutting measures. Net
loss for the full year ending December 31,
2016 was $8.1 million
($0.07 per share), compared to a loss
of $15.2 million ($0.16 per share) for the same prior year period.
The higher net loss in 2015 compared with 2016 was due to non-cash
losses of $4.3 million taken upon
termination of a Mt. Hope Project power transmission contract at
EMLLC, and a $1.0 million loss taken
on conversion of several of the Company's Senior Convertible
Promissory Notes from a 2014 private placement.
During the fourth quarter, cash use of $2.5 million was the result of $1.2 million at the Mt. Hope Project related to
EMLLC owners' costs and $1.3 million
in the Company's general and administrative expenses.
Bruce D. Hansen, Chief Executive
Officer, said, "2016 has been a challenging year as the molybdenum
market continued to slowly recover. We remain focused on
progressing efforts toward the reinstatement of our permits for
water rights at the Mt. Hope Project and working with the Bureau of
Land Management ("BLM") to resolve the technical deficiencies noted
by the U.S. Court of Appeals for the Ninth Circuit ("Ninth
Circuit") concerning the baseline air quality requirements under
the National Environmental Policy Act ("NEPA") to obtain the
reissuance of our Record of Decision ("ROD"). In addition to
advancing the Mt. Hope Project, we are continuing to progress
efforts with our strategic partner AMER, and others as we review
value accretive base metals and molybdenum related
opportunities. We anticipate an improved molybdenum market
going forward as we see the oil market stabilize and energy related
steel production increasing. We also remain focused on maintaining
our ongoing spending levels in alignment with our cash conservation
and liquidity management goals."
Mr. Hansen concluded, "As we look forward, we have taken
decisive cost-cutting actions that better position our Company to
advance development when market conditions improve. Through
our cost-cutting programs, we have continued to achieve reductions
in our Corporate and Liberty Project care and maintenance costs of
20% from an average of $1.9 million
per quarter during 2015 and 2016 to approximately $1.5 million per quarter going forward in
2017."
Table 1: Financial Summary
($ and Shares in 000,
Except Per Share and Molybdenum Price)
|
2016
|
4Q
2016
|
2015
|
4Q
2015
|
YOY
Variance
|
4Q YOY
Variance
|
Exploration
& evaluation expenses
|
$
1,077
|
$
178
|
$
1,032
|
$
173
|
4%
|
3%
|
General and
administrative expenses, including non-cash stock
compensation
|
6,050
|
1,560
|
8,703
|
1,541
|
-30%
|
1%
|
Total Operating
Expenses
|
7,127
|
1,732
|
9,735
|
1,714
|
-27%
|
1%
|
Loss on
termination of power transmission contract
|
0
|
-
|
(4,317)
|
-
|
n.a.
|
n.a.
|
Loss on
extinguishment of senior convertible notes
|
0
|
-
|
(971)
|
-
|
n.a.
|
n.a.
|
Interest
expense
|
(961)
|
(196)
|
(1,100)
|
(207)
|
n.a.
|
n.a.
|
Net Loss
|
$
(8,067)
|
$
(1,919)
|
$
(15,223)
|
$
(1,962)
|
-47%
|
-2%
|
Net Loss Per
Share
|
$
(0.07)
|
$
(0.01)
|
$
(0.16)
|
$
(0.02)
|
-56%
|
-50%
|
Avg. Weighted Shares
Outstanding
|
110,521
|
110,571
|
97,056
|
104,299
|
14%
|
6%
|
Table 2: Balance Sheet Summary
($ in 000)
|
Dec. 31,
2016
|
Dec. 31,
2015
|
Dec. 31 YOY
Variance
|
Cash and Cash
Equivalents
|
$
8,470
|
$
13,047
|
-35.1%
|
Current
Assets
|
8,559
|
13,197
|
-35.1%
|
Current
Liabilities
|
1,520
|
2,404
|
-36.8%
|
Working
Capital
|
7,039
|
10,793
|
-34.8%
|
Restricted
cash held at EMLLC
|
13,025
|
16,636
|
-21.7%
|
Other
restricted cash
|
1,957
|
6,782
|
-71.1%
|
Total
Assets
|
337,286
|
346,311
|
-2.6%
|
|
|
|
|
Long term
debt
|
1,340
|
1,517
|
-11.7%
|
Sr.
convertible notes
|
5,540
|
5,316
|
4.2%
|
Return of
contributions payable to POS-Minerals
|
33,641
|
33,884
|
-0.7%
|
Other
liabilities
|
12,912
|
12,523
|
3.1%
|
Long term
liabilities
|
53,433
|
53,260
|
0.3%
|
|
|
|
|
Contingently
Redeemable Non-controlling Interest
|
172,659
|
173,265
|
-0.3%
|
Total Shareholders'
Equity
|
$
109,674
|
$
117,402
|
-6.6%
|
Mt. Hope Project Water Rights and Permits Update
As described in the Company's previous news release, on
December 28, 2016 the Ninth Circuit
issued its Opinion rejecting many of the arguments raised by the
Plaintiffs challenging the Environmental Impact Statement ("EIS")
completed for the Mt. Hope Project, but issued a narrow reversal of
the BLM's findings related to air quality analysis. Because
of this technical deficiency, the Court vacated the ROD, and will
require additional evaluation of air quality impacts and resulting
cumulative impact analysis under NEPA before a supplemental EIS can
support a new ROD. The Company is confident in the BLM's
process and is working closely with the agency to resolve technical
matters with air quality baseline studies raised by the Ninth
Circuit. Thereafter, we look forward to completing the
necessary NEPA public review of the supplemental EIS to receive a
new ROD for the eventual construction and operation of the Mt. Hope
Project.
Regarding Mt. Hope water
rights, on March 14, 2016, we
received the District Court for the County of Eureka, Nevada's Order, on remand from the
Nevada Supreme Court, vacating the Monitoring, Management, and
Mitigation (3M) Plan, denying the water applications and vacating
the water permits issued by the Nevada State Engineer. The
State Engineer has filed an appeal to the Nevada Supreme Court
concerning the District Court's interpretation of the Supreme
Court's Opinion and has also argued that the District Court acted
in excess of its judicial authority in violation of Nevada's Constitution and Statutes. The
Company has filed a similar appeal to the Nevada Supreme
Court. We currently await the decision by the Nevada Supreme
Court and continue to seek opportunities to work with the State
Engineer to document a process for reobtaining permits for water
rights at the Mt. Hope
project.
Mt. Hope Project Engineering and Equipment
Procurement
Engineering remains approximately 65% complete at the Mt. Hope
Project. Currently, there is no ongoing engineering and procurement
effort. The Company anticipates it will re-initiate its
engineering and procurement programs once market conditions allow
for full Mt. Hope Project financing.
Through December 31, 2016, $87.2
million in payments on equipment orders have been funded by
EMLLC, which has now ordered or purchased most of the long-lead
milling equipment, haul trucks, and mine production drills, and has
maintained an ongoing letter of intent preserving deposits and
indexed pricing for the purchase of two electric shovels.
Based on its current forecast, the Company does not anticipate
taking delivery of the haul trucks, drills, and electric shovels in
2017 and continues to work with the respective vendors to extend
these agreements until the Company obtains financing for
construction of the Mt. Hope Project.
2017 Outlook and Priorities
General Moly's priorities for 2017 are to:
- Prudently manage financial liquidity and flexibility to sustain
the Company over the medium term, including continued stringent
cost management throughout the organization, rescheduling of
equipment procurement, and funding of current business activities
into the second quarter of 2018, excluding potential additional
equity investments from AMER or other potential strategic
partners.
- Leverage the Company's technical and financial skills and
expertise to work jointly with AMER and others to identify
value-accretive acquisition opportunities with a focus on base
metal and ferro-alloy prospects in the western hemisphere;
- Effect reinstatement of the ROD, permits for water rights at
the Mt. Hope Project, which would lead to the Tranche 2 investment
of $6.0 million by AMER, contingent
on a molybdenum price rise to $8 per
pound for 30 consecutive calendar days, and maintain other existing
federal and state permits.
About General Moly
General Moly is a U.S.-based molybdenum mineral development,
exploration and mining company listed on the NYSE MKT and the
Toronto Stock Exchange under the symbol GMO. The Company's primary
asset, an 80% 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 wholly-owned Liberty Project, a
molybdenum and copper property also located in central Nevada, General Moly's goal is to become the
largest pure play primary molybdenum producer in the world.
Contact:
Scott
Roswell
(303) 928-8591
info@generalmoly.com
Website: 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
obtain a re-grant of its water permits and Record of Decision,
ability to maintain required federal and state permits to continue
construction, and commence production, ability to raise required
project financing, ability to respond to adverse governmental
regulation and judicial outcomes, and ability to maintain and /or
adjust 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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visit:http://www.prnewswire.com/news-releases/general-moly-reports-fourth-quarter-and-2016-results-300425145.html
SOURCE General Moly, Inc.