General Moly On Track To Complete PEA

 

LAKEWOOD, CO - Bruce D. Hansen, Chief Executive Officer of General Moly, said, "We are pleased to see the recent rise in underlying molybdenum prices from less than $10 per pound at the end of February to $13 per pound currently. Molybdenum pricing recently reached a 21-month high, supported by improved demand and tighter supply. We feel the molybdenum price is entering a more sustainable long term level."

Hansen added, We are continuing to pursue financing alternatives for the Mt. Hope Project, and have been aided by recent updates to capital and operating costs, mine plans, and project economics which are supporting ongoing due diligence efforts. These updated economics indicate that the after tax net present value at an 8% discount rate of General Moly's 80% interest in Mt. Hope is approximately $370 million at current molybdenum prices of $13 per pound growing to over $730 million at $15 per pound molybdenum.

Hansen concluded,  We are on track to complete the Preliminary Economic Assessment for the copper focused Liberty Starter Pit Project in the summer of 2014. We believe the results will have the potential to generate favorable economics given the Starter Pit Projects low strip ratio in shallow pits, combined with relatively low initial capital requirements benefitting from the significant pre-existing infrastructure and the site’s prior open-pit operations. In addition, our preliminary view is that the Liberty Starter Pit Project can begin on our privately owned land, which is expected to allow for a shorter and simpler permitting process with the state of Nevada. Further, the water rights we control at Liberty are capable of supporting a 50,000 ton per day milling rate although our initial focus for the Preliminary Economic Assessment will be approximately 25,000 tons per day.

Two challenges of the Mt. Hope Project’s water permits and Management, Monitoring & Mitigation (3M) Plan were separately appealed to the Nevada Supreme Court and consolidated by the Supreme Court into one appeal. Briefing has been completed, and oral argument challenging the water permits and 3M Plan was reset by the Supreme Court for June 30, 2014.

In February 2013, two parties filed a Complaint challenging issuance of the Record of Decision (ROD) for the Mt. Hope Project. The federal District Court in Nevada (District Court) approved EMLLC's request to intervene in the Complaint. Briefing by the parties was completed in the first quarter of 2014 and probable oral argument is anticipated to be completed in the second quarter of 2014.

All permits remain in effect. The Company intends to vigorously defend the legal challenges to the water permits, the 3M plan and the ROD and we believe the Mt. Hope Project's permits will be upheld after judicial review, Hanson said.

Engineering is approximately 65% complete at the Mt. Hope Project. Through March 31, 2014, EMLLC has made deposits of $74.1 million on equipment orders and has paid $12.0 million into an escrow arrangement for electricity transmission services. EMLLC has now ordered or purchased most of the long-lead milling equipment, haul trucks, mine production drills and has entered into a letter of intent for the purchase of two electric shovels.

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.