Mt. Hope Project Permitting Update

 

LAKEWOOD, CO - General Moly reported that the Bureau of Land Management (BLM) published the Mt. Hope Draft Environmental Impact Statement (EIS) for public comment on December 2, 2011. The public comment period concluded on March 1, 2012. The BLM is now in the process of completing the Final EIS. Once the Final EIS is completed, it will be advanced toward publication through the Notice of Availability process within the U.S. Department of the Interior and thereafter published in the Federal Register for a 30-day period. Following the close of this period, General Moly anticipates the BLM to issue a Record of Decision (ROD) allowing the Company to initiate construction activities. The Company continues to anticipate the ROD to be issued in the second half of this year.

In addition to the ROD, three Nevada state-issued permits are viewed as major environmental permits. These are the Air Quality Permit, Water Pollution Control Permit, and the Reclamation Permit. The Air Quality Permit was received on May 30, 2012. The Company continues to develop the applications and supporting information for the remaining two permits, and anticipates receiving them before the issuance of ROD.

Mt. Hope project water rights update:

On July 15, 2011, the Nevada State Engineer issued a second Ruling granting the Company's water right applications for the Mt. Hope Project's mining operations in Elko County, Nevada. The State Engineer issued all water permits on December 14, 2011 and certain amended permits on January 4, 2012. The Ruling was appealed to the Nevada State District Court and the Ruling was upheld in a decision entered on June 14, 2012. The water became available for use at the Mt. Hope Project following the State Engineer's approval of the Company's Monitoring, Management and Mitigation Plan (3M Plan) on June 6, 2012.

On July 10 and 11, 2012, respectively, Eureka County and two other parties comprised of one individual water rights holder in Diamond Valley and one in Kobeh Valley filed Notices of Appeal, appealing to the Nevada Supreme Court the Nevada State District Court's Order denying their appeals of the State Engineer's July 2011 Ruling. The company is confident in the decision of the Nevada State District Court and that the Nevada Supreme Court will uphold the decision which denied all appeals of the State Engineer's Ruling.

On July 5, 2012, the same two individual water rights holders appealing the Nevada State District Court's Order to the Nevada Supreme Court filed an appeal of the State Engineer's approval of the Company's 3M Plan to the same Nevada State District Court. Eureka County did not appeal the approved 3M Plan. General Moly anticipates a favorable Nevada State District Court decision upholding the 3M Plan.

Notwithstanding these further appeals, the water remains available to the Company, as described above, for use at the Mt. Hope Project for construction and ultimate production.

Mt. Hope project capital, engineering, and equipment procurement update:

As announced on August 1, 2012 the Company completed a review of the capital cost requirements for the Mt. Hope Project based on current major equipment, labor and material pricing and further engineering definition. The project capital was also updated for currently known permitting and regulatory requirements and includes the schedule impacts of permitting delays since the September 2008 feasibility study update, which was confirmed in November 2009. The Mt. Hope Project has not materially changed in scope and is currently designed at 60% engineering completion with solid scope definition. The overall capital cost estimate has increased by 11%, or $130 million, and now totals $1,284 million. The Company's 80% share of the increase is $104 million. This estimate will continue to be reviewed and is subject to change based on labor, equipment and construction material escalation, changes in project design, schedule delays, regulatory requirements and other factors.

Engineering efforts, which were paused in March 2009, were restarted earlier this year by M3 Engineering & Technology following the publication of the Draft EIS. The Company has now ordered or purchased most of the long-lead milling equipment, haul trucks & mine support equipment, mine production drills, and has entered into a non-firm agreement for the purchase of electric shovels. While equipment procurement has restarted, firm orders for some loading equipment and other process equipment must still be placed.

The company's address is 1726 Cole Blvd., Suite 115, Lakewood, CO 80401, 303-928-8599.