LAKEWOOD, Colo., May 1, 2017 /PRNewswire/ -- General Moly,
Inc. (the "Company" or "General Moly") (NYSE MKT and TSX: GMO)
announced its financial results for the first quarter ended
March 31, 2017. The Company
ended the quarter with a cash balance of approximately $7.1 million as compared to $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.
First quarter highlights:
- The Company maintained the quarterly cash burn rate for
Corporate and Liberty Project costs at an estimated $1.5 million per quarter. 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 the first quarter of 2017
with a restricted cash balance of $12.0
million (100% basis) compared to $13.0 at year end 2016 in a cash reserve account,
and remains self-funded through 2021 based on projected care and
maintenance expenses.
- The Company reported a net loss for the three months ending
March 31, 2017 of $1.9 million ($0.02
per share), compared to a net loss of $2.2
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.
Bruce D. Hansen, Chief Executive
Officer, said, "We remain focused on progressing efforts to
reinstate 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")
and complete a supplemental Environmental Impact Statement 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 have seen the molybdenum
price increase by over 30% year to date to trade at approaching
$9/lb and anticipate an improved
molybdenum market going forward as we see the oil market stabilize
and energy related steel production increasing. In addition,
general construction and infrastructure development bodes well for
the molybdenum market as global steel production grew over 5% in
the quarter."
Mr. Hansen continued, "On April 17,
2017, the Company and AMER entered into a First Amendment to
the AMER warrant extending the deadline two months for satisfaction
of all conditions to vesting of the warrant. We appreciate
our continuing relationship with AMER, and agreed to a short
extension of the expiration of the warrant while we discuss a
longer-term modification of our agreements, supportive of our
strategic partnership."
Lastly, Mr. Hansen concluded, "As we look forward, we
continue to take decisive cost-cutting actions that better position
our Company to advance development when market conditions improve
and expect to average approximately $1.5
million in spend per quarter going forward in 2017."
Table 1: Financial
Summary
|
|
($ and Shares in 000,
Except Per Share and Molybdenum Price)
|
1Q
2017
|
1Q
2016
|
1Q YOY
Variance
|
Exploration
& evaluation expenses
|
$
137
|
$
546
|
-75%
|
General and
administrative expenses, including non-cash stock
compensation
|
1,508
|
1,362
|
11%
|
Total Operating
Expenses
|
1,645
|
1,908
|
-14%
|
Interest
expense
|
(288)
|
(249)
|
n.a.
|
Net Loss
|
$
(1,933)
|
$
(2,157)
|
-10%
|
Net Loss Per
Share
|
$
(0.02)
|
$
(0.02)
|
0%
|
Avg. Weighted Shares
Outstanding
|
111,087
|
110,356
|
1%
|
Table 2: Balance
Sheet Summary
|
|
($ in 000)
|
Mar 31,
2017
|
Dec 31,
2016
|
Cash and Cash
Equivalents
|
$
7,136
|
$
8,470
|
Current
Assets
|
7,232
|
8,559
|
Current
Liabilities
|
1,482
|
1,520
|
Working
Capital
|
5,750
|
7,039
|
Restricted
cash held at EMLLC
|
12,016
|
13,025
|
Other
restricted cash
|
1,867
|
1,957
|
Total
Assets
|
335,563
|
337,286
|
|
|
|
Long term
debt
|
1,340
|
1,340
|
Sr.
convertible notes
|
5,646
|
5,540
|
Return of
contributions payable to POS-Minerals
|
33,641
|
33,641
|
Other
liabilities
|
12,947
|
12,912
|
Long term
liabilities
|
53,574
|
53,433
|
|
|
|
Contingently
Redeemable Non-controlling Interest
|
172,649
|
172,659
|
Total Shareholders'
Equity
|
$
107,858
|
$
109,674
|
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. The Nevada Supreme Court recently
ordered oral argument, reset to take place on Monday, May 1st, the date of this
release. We look forward to receiving the decision by
the Nevada Supreme Court and continue to seek opportunities to work
with the State Engineer to define 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 March 31, 2017, $87.4
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.
The Company has extended these agreements to delay delivery of
the haul trucks, drills, and electric shovels until late 2017/2018
and will continue to work with these vendors to further extend if
necessary 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, and reissuance of 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 trading at or above
$8 per pound for 30 consecutive
calendar days, and the restoration of our water permits by the
State Engineer.
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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SOURCE General Moly, Inc.