Progress At The Mt. Hope And Liberty Projects

 

LAKEWOOD, CO - Bruce D. Hansen, Chief Executive Officer of General Moly, said, "Year-to-date we have completed the critically important work of refreshing NI 43-101 reports for our two world-class assets, Mt. Hope and Liberty. Updated estimates on production, capital, operating cost, and economics highlight the robust economics of these projects and assist us greatly as we explore a variety of financing alternatives for Mt. Hope development and to advance the Liberty Project through full feasibility and permitting.

Hansen added, Interest in Mt. Hope from potential strategic investors, both in and outside of China, has increased in tandem with an improving molybdenum price currently trading around $13 per pound. We continue to have substantive dialogue with potential partners who could support a debt package to provide the bulk of the Mt. Hope capital requirements. In addition, as we further progress Liberty, we anticipate shareholders and potential strategic investors will more fully realize the inherent value of this project, as well. As we proceed, the Company will continue to prudently manage its liquidity position.

Two challenges of the Mt. Hope Project’s water permits and Management, Monitoring & Mitigation (3M) Plan were separately appealed to the Nevada Supreme Court (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 heard on June 30, 2014 by the Supreme Court. A ruling is expected in late 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. On July 23, 2014, the Court denied the two parties motion for summary judgment in its entirety. On August 1, 2014, following the denial of summary judgment, the District Court entered judgment against the two parties regarding all claims raised in the Complaint. The Plaintiffs will have sixty days from the entry of Judgment or September 30, 2014 to file a notice to appeal the District Courts decision to the Ninth Circuit Court of Appeals.

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

Engineering is approximately 65% complete at the Mt. Hope Project. Through June 30, 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 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.

In July, 2014, the Company reported updated economics on a look forward basis for General Moly's 100% ownership in the Liberty Project, using a $15.00 per pound flat long-term molybdenum price, a $3.25 per pound flat long-term copper price, and an 8% discount rate, resulting in an after-tax Net Present Value (NPV) of $325 million and an internal rate of return (IRR) of 17.4%. The Liberty Project is NPV breakeven at an approximate $11.64 per pound molybdenum price and undiscounted cash flow breakeven at approximately $9.58 per pound molybdenum price. If the Liberty molybdenum concentrates could be toll roasted at General Moly's Mt. Hope mine, once built, the NPV of Liberty would increase by $36 million to $361 million, the IRR would increase to 18.4%, and the first 5 years total cash cost would improve to $7.41 per pound.

The Company forecasted operating costs for the Liberty Project based on current labor rates and input commodity prices over the first full five years of operation to average $6.32 per pound for on-site cash costs, using copper as a by-product credit. Total cash costs are estimated at $7.79 per pound for the first five-years, including off-site roasting, smelting, and shipping.