- Progress Update on Re-obtaining Mt. Hope Water Rights
& ROD
LAKEWOOD, Colo., March 2, 2018 /CNW/ -- General Moly, Inc.
(the "Company" or "General Moly") (NYSE American and TSX: GMO), the
only western-exchange listed, pure-play molybdenum mineral
development company, reports that the global molybdenum spot price
has increased 25 percent year to date to $12.83 per pound.
The current molybdenum ("moly") price provided by Platts almost
tripled from its low of $4.30 in
October 2015. In 2017, moly was the
second best performing metal after cobalt amongst BMO Capital
Market's Global Commodities' universe of metals and mining. (See
Appendix Figure 3 for the moly price chart.)
Of the broader industrial metal complex, moly is most akin to
nickel, which is a smaller component of the most common industrial
metals indexes, the Bloomberg Commodities' Industrial Metals Index
("BCOMIN") and the S&P GSCI Industrial Metals Index
("SPGSINTR"). Both indexes are up over 45 percent for the past two
years. Other components of these indexes include copper, aluminum
and zinc, with the addition of lead in SPGSINTR.
Figure 1: Table of Price Changes (as of February 28, 2018)
|
Symbol
|
YTD
Change
|
1 Year
Change
|
2017
Change
|
2 Year
Change
|
5 Year
Change
|
Molybdenum
Price
|
|
25.1%
|
66.0%
|
51.9%
|
139.7%
|
14.5%
|
S&P GSCI
Commodities Total Return Index
|
SPGSCITR
|
0%
|
7.0%
|
5.8%
|
26.7%
|
-47.8%
|
S&P GSCI
Industrial Metals Index
|
SPGSINTR
|
-2.8%
|
13.8%
|
29.1%
|
45.0%
|
-7.6%
|
Bloomberg
Industrial Metals Index
|
BCOMIN
|
-2.2%
|
14.2%
|
28.1%
|
47.0%
|
-8.9%
|
S&P 500
Index
|
SPX
|
1.5%
|
14.8%
|
19.4%
|
40.5%
|
79.2%
|
Source: Platts for molybdenum reference. Bloomberg for all
index references.
Compelling market factors that the Company believes foreshadow
an industrial metals resurgence include a synchronized global
market expansion, further growth in China and a late stage business cycle with
high metals' demand.
Bruce D. Hansen, Chief Executive
Officer of General Moly, said, "Moly can be called a late stage
industrial metal. We believe the moly price recovery, which began
slowly in 2016, has accelerated in the past few months and still
has future appreciation potential."
Global Economic Expansion Continues
Global manufacturing was off to a strong start, with the J.P.
Morgan Global Manufacturing Purchasing Managers' Index ("Global
PMI") for January 2018 at 54.4,
marking the 23rd consecutive month of expansion. The JPM
and IHS Markit Global PMI for the last month of 2017 also was at a
near seven-year high at 54.5.
The World Bank projects global economic expansion at a solid 3.1
percent for 2018, after a better than anticipated 3 percent growth
in 2017, "as the recovery in investment, manufacturing and
trade continues, and as commodity-exporting developing economies
benefit from firming commodity prices," according to the World
Bank's January 2018 news release.
China Continues to Grow; Toughens Steel Rebar
Standards
China is forecast to grow at a
slower pace of 6.4 percent in 2018 compared with a robust 6.8
percent in 2017. However, today's Chinese economy is massive and
consuming more in aggregate. In addition, India is projected to grow at 7.3% in 2018
versus 6.7 percent in 2017, stated the World Bank.
More than 70 percent of moly's first use is for steel
production. China uses
approximately a third of global moly and produces more than
one-third of global moly supply, according to the CPM Group, a
leading commodities research and consulting firm in New York. China is also the world's largest steel
producer.
China recently issued tougher
regulations raising the standards for domestic steel rebar and long
steel products, according to news reports. There is a higher
concentration of moly used in long products such as rebar, rods and
billets compared with flat products such as coils, sheet and slabs.
Higher grade long steel products will require more moly for
strength.
Late Stage Business Cycle Positive for Industrial
Metals
Commodity prices have historically outperformed during the
mature part of the business cycle, which is where an increasing
number of portfolio managers believe the U.S. and global economy
are at. Global economic expansion drives demand and price for
industrial metals in general.
Molybdenum Supply Constriction Ahead
In its October 2017 molybdenum
market update, the CPM Group estimates that the supply and demand
will near equilibrium in 2018 with a slight surplus and anticipates
that the market in 2019 will tip into deficit, which will be
exacerbated in 2020 and 2021. Such timing would align with the
potential development of the Company's Mt. Hope Project in central
Nevada, upon a sustained
improvement in the moly price.
Other Business Developments – Water Permit Hearing Scheduled
& Supplemental EIS Update
In other developments for the Company, the Nevada State Engineer
has scheduled a hearing beginning September
11, 2018 on the Company's new change applications for water
permits at the Mt. Hope Project. The hearing is scheduled
for eight days in Carson City. The Company intends to submit
evidence of its ability to protect senior water right holders while
it pumps the water necessary for production at the Mt. Hope molybdenum project. A decision
from the State Engineer is anticipated by early 2019.
In regards to progress with the draft Supplemental Environmental
Impact Statement ("EIS") for the Mt. Hope Project, the Company
continues to work with the Bureau of Land Management to address
concerns from the 2016 Order of the U.S. Circuit Court for the
Ninth Circuit in its review of the 2012 EIS.
The Company has completed updated air quality and cumulative
impact studies, and is working to address questions posed by the
Court concerning the potential existence of public water
reserves. The Company anticipates moving forward with a draft
Supplemental EIS in compliance with public review and comment under
the National Environmental Policy Act in the spring 2018, followed
by an anticipated Record of Decision ("ROD") approving the
Supplemental EIS by early 2019.
About General Moly
General Moly is a U.S.-based, molybdenum mineral exploration and
development company listed on the NYSE American ("NYSE AMER"),
recently known as the NYSE MKT and former American Stock Exchange,
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 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 of molybdenum, copper,
silver, lead or zinc, ability to identify any economic mineral
reserves of copper, silver, lead or zinc; ability of the Company to
obtain approval of its joint venture partner at the Mt. Hope
Project in order to mine for copper, silver, lead or zinc, ability
to raise required project financing or funding to pursue an
exploration program related to potential copper, silver lead or
zinc deposits at Mt. Hope, 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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