LAKEWOOD, Colo., Aug. 8, 2017 /PRNewswire/ -- General Moly,
Inc. (the "Company") (NYSE MKT and TSX: GMO), the only western
exchange listed, pure-play molybdenum mineral development company,
and its largest shareholder AMER International Group ("AMER")
agreed to accelerate the Tranche 2 private placement for
$6.0 million of General Moly common
shares priced at the volume weighted average price ("VWAP") for the
30-day period ending August 7, 2017
of $0.41, for a total of 14.6 million
common shares.
The Company and AMER agreed to accelerate the closing of the
above Tranche 2 and Tranche 3 $10.0
million private placement under a second amendment to the
parties' Investment and Securities Purchase Agreement ("Amended
Investment Agreement"), removing previous conditions related to the
reissuance of water permits for the Company's Mt. Hope Project in
Nevada and molybdenum prices for
Tranche 2, and amending conditions for Tranche 3, concerning
reinstatement of water permits or completing a joint business
opportunity, described below.
Through the Amended Investment Agreement, AMER reinforces its
commitment to work with General Moly to procure and support a Bank
Loan of approximately $700.0 million
from a major Chinese bank or banks for development of the Mt. Hope
Project when the molybdenum market conditions improve. AMER
will guarantee the Bank Loan, which is anticipated to have normal
and customary covenants and security arrangements.
General Moly and AMER first entered into the Investment and
Securities Purchase Agreement in 2015. AMER is a private,
China-based multinational company
that is one of the world's largest advanced materials, fine
machining, and downstream metals refining providers. AMER is ranked
183rd in the Fortune Global 500 of the world's largest
companies by the past year's revenues. AMER's Chairman Wang Wenyin
is sixth on the list of billionaires in China, according to Forbes.
Commenting on AMER's further investment in General Moly, Mr.
Wang said, "We are pleased to continue investing in General Moly as
we are confident about a rewarding future from a quality management
team, the development of the Mt. Hope Project as the best, low-cost
primary molybdenum asset in the world and continued increases in
the molybdenum price. We have been working closely with the
management of General Moly to advance our joint business
development for under-valued base metal opportunities."
Bruce D. Hansen, Chief Executive
Officer, said, "We appreciate our mutually beneficial partnership
with AMER in building long-term value for General Moly and all of
our shareholders. The renewed commitment AMER has made to
General Moly and the Mt. Hope Project reinforces General Moly's
competitive position and leverage in a rising molybdenum price
environment. AMER's agreement to purchase additional General
Moly common stock through the Amended Investment Agreement by
accelerating the Tranche 2 and Tranche 3 purchases provides
additional funding to the Company. The purchases, together with our
current cash, are projected to fund our current business activities
and working capital for more than two years at the current cash
burn of $1.5 million per quarter for
corporate and the Liberty Project expenses."
Amended Investment Agreement Highlights
Highlights of the Amended Investment Agreement include:
- Tranche 2 is a private placement for $6.0 million worth of General Moly common shares
priced at the 30-day volume weighted average price ("VWAP") period
ending August 7, 2017, the effective
date of the Amended Investment Agreement. A sum of $5.5 million of the proceeds will be allocated to
general corporate purposes and $0.5
million will be directed to the existing expense
reimbursement account to manage the Mt. Hope Project financing and
other jointly sourced business development opportunities.
- Additionally, AMER and General Moly agreed to amend the
warrants previously provided to AMER, whereby the expiration of the
warrants was extended to the third anniversary of the expected
reissuance of the Record of Decision ("ROD") for the construction
and operation of the Mt. Hope Project. The 80 million number of
warrants and exercise price of $0.50
remain unchanged. The conditions for the warrants stipulate that
the warrants are exercisable upon completion of the approximately
$700.0 million Bank Loan for the Mt.
Hope Project and such conditions are now to be completed three
years following the ROD. The Company expects to receive the Record
of Decision from the U.S. Bureau of Land Management by early
2018.
- The Tranche 3 private placement for $10.0 million of General Moly common shares,
priced at $0.50, is anticipated to
close on the earlier of March 31,
2018 or (i) 90 days following the close of a joint business
opportunity involving use of 10.0 million shares of GMI common
stock; or (ii) 90 days after reinstatement of water permits from
the Nevada State Engineer for the Mt. Hope water permits. A sum of
$9.5 million of the funds will be
directed to general corporate purposes and $0.5 million will be allocated to the expense
reimbursement account described above.
- The parties agreed to eliminate the previous conditions to
closing Tranche 2 of the Investment Agreement requiring restoration
of permits for the Mt. Hope Project's water rights and for the
price of molybdenum to average in excess of $8/lb for a 30-consecutive calendar day period;
and to eliminate the conditions to the closing of Tranche 3
concerning a final adjudication of the Mt. Hope Project's water
rights through courts or settlement, and for the price of
molybdenum to average in excess of $12/lb for a 30-consecutive calendar day
period.
Tranche 3 of the amended Investment Agreement may be subject to
General Moly stockholder approval.
After drawdown of the Bank Loan, if AMER owns more than 30% of
the common stock of General Moly, AMER will nominate a third
Director to General Moly's Board of Directors.
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.
Molybdenum is a metallic element used primarily as an alloy
agent in steel manufacturing. When added to steel, molybdenum
enhances steel strength, resistance to corrosion and extreme
temperature performance. In the chemical and petrochemical
industries, molybdenum is used in catalysts, especially for cleaner
burning fuels by removing sulfur from liquid fuels, and in
corrosion inhibitors, high performance lubricants and polymers.
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.