General Moly Prepared To Enter Next Phase With Positive Market Outlook
LAKEWOOD, CO - General Moly, Inc. reported that the Company will enter the next phase of its evaluation of strategic alternatives. This initiative will be supported by the backdrop of a positive molybdenum (moly) market outlook and by the benefit of the Company’s many accomplishments of 2019, underscored by the Mt. Hope Project having become fully permitted.
According to projections by the CPM Group (CPM), moly is anticipated to run into a deficit over 2020-2024. CPM anticipates the sharpest supply deficit in 2021 and 2022. CPM is forecasting moly real prices to increase by more than 30% in 2020 to average above $12.50/lb, compared to the current price of $9.60/lb, with a further increase to over $13.50/lb in 2021.
In addition to the anticipated improvements in the moly market, General Moly enters 2020 in a solid position to pursue strategic alternatives given the significant accomplishments achieved in 2019. The Company is working with its financial advisors on securing incremental financing and evaluating other strategic alternatives, including the potential addition of new Mt. Hope Project partners, additional Corporate Strategic investors, merger opportunities, and/or the possible sale or privatization of the Company.
Chief Executive Officer Bruce Hansen, said, “We appreciate the support of our shareholders, note-holders, Amer NA, and our strategic partner POS-Minerals Corporation, who holds the 20% membership interest in the Mt. Hope Project operating company. We also thank our small team of employees and our financial advisors for their dedication and commitment for the achievements.”
Highlights: The Mt. Hope moly project in Nevada became fully permitted upon receipt of the Record of Decision (ROD) from the federal Bureau of Land Management (BLM) in conjunction with approval of the Supplemental Environmental Impact Statement (SEIS) by the BLM and the U.S. Department of Interior for the Mt. Hope Project in September The Nevada State Engineer issued the water permits for mining use at the Mt. Hope Project as announced by the Company in July; General Moly and its largest shareholder Amer International Group and its affiliates (Amer) resolved their dispute, and Amer invested $4 million in a private placement in December 2019. Amer agreed to use its reasonable best efforts to assist the Company to obtain up to $700 million of Chinese Bank financing toward the funding of the Company’s 80% membership interest contribution for the construction and development of the Mt. Hope Project; The Company closed in December a private offer to exchange its outstanding 10% Senior Convertible Promissory Notes and 10% Senior Promissory Notes for units consisting of its newly issued 12% Senior Promissory Notes due December 26, 2022 (the Exchange Notes) and warrants to purchase shares of the Company’s common stock, upon the terms and conditions set forth in the Offer to Exchange and Subscription Offer dated November 27, 2019. In a resoundingly successful Exchange Offer program, eligible holders tendered 95% of the outstanding Old Notes with an original principal amount of $6.89 million of the total outstanding of $7.25 million; & In addition, certain eligible holders who tendered their Old Notes in the Exchange Offer also elected to participate in the accompanying Subscription Agreement to purchase (the “Subscription Offer”) 13,355 units consisting of the Company’s newly issued 13% Senior Promissory Notes also due 2022 (the “Supplemental Notes”) and accompanying Warrant. Hansen and the largest Old Notes holder also participated in the Subscription Offer for Supplemental Notes.
Looking ahead, CPM forecasts a moly price recovery from further supply shortfall from tight mine supply and incremental improving demand. Chilean mine supply in particular is projected to continue to fall after double-digit reductions in both 2018 and 2019, driven by reduced government funding going forward for state-owned Codelco. Demand is anticipated to improve with a stabilizing global economy, normalizing 300 series stainless steel demand and a moly demand boost from continued global Liquefied Natural Gas (LNG) developments, including those related to the July 2019 announced liberalization of oil and gas laws in China to spur foreign direct investment in gas infrastructure.
The company’s address is 1726 Cole Blvd., Suite 115, Lakewood, CO 80401, (303) 928-8599, www.generalmoly.com.