Third quarter and to date highlights:
-
The Company and
AMER closed the Tranche 2 private placement of$6.0 million ofGeneral Moly common shares priced at the volume weighted average price ("VWAP") for the 30-day period endingAugust 7, 2017 of$0.41 for 14.6 million common shares conveyed to AMER. Of the$6.0 million in equity sale proceeds,$5.5 million is available for general corporate purposes and$0.5 million will be held in a loan procurement account to cover costs related toMt. Hope Project financing and other jointly sourced business development opportunities. -
During the third quarter,
Corporate and Liberty Project costs were$1.4 million , excluding$0.3 million in due diligence costs associated with evaluating base metal acquisition opportunities withAMER . These due diligence costs are paid from the Company's restricted cash account reserved for such purposes and for the future Mt. Hope financing costs. The Company is on track in achieving its goal of maintaining a quarterly cash burn rate of$1.5 million per quarter for the full year 2017, excluding further due diligence costs. -
At the
Mt. Hope Project inNevada , the Company's 80% owned joint venture operating companyEureka Moly, LLC ("EMLLC") ended the third quarter of 2017 with a restricted cash balance of$11.0 million (100% basis) compared to$13.0 million at year end 2016 in a cash reserve account. Additional cost reductions to maintenance expenses have extended Mt. Hope's self-funding for care and maintenance by several months into 2022. -
The Company reported a net loss for the three months ending
September 30, 2017 of$2.2 million ($0.02 per share), up$0.1 million from the prior year period as a result of the due diligence costs described above. -
Current cash and cash equivalents at
September 30, 2017 were$3.4 million , before recognition of the$6.0 million from the closing of Tranche 2 under the AMER Investment Agreement.
Table 1: Financial Summary |
|||
($ and Shares in 000, Except Per Share and Molybdenum Price) |
3Q 2017 |
3Q 2016 |
3Q YOY Variance |
Exploration & evaluation expenses |
$ 302 |
$ 235 |
29% |
General and administrative expenses, including non-cash stock compensation |
1,660 |
1,589 |
4% |
Total Operating Expenses |
1,962 |
1,824 |
8% |
Interest expense |
(205) |
(266) |
n.a. |
Net Loss |
$ (2,161) |
$ (2,086) |
4% |
Net Loss Per Share |
$ (0.02) |
$ (0.02) |
0% |
Avg. Weighted Shares Outstanding |
111,168 |
110,568 |
1% |
Table 2: Balance Sheet Summary |
||
($ in 000) |
September 30, |
December 31, |
Cash and Cash Equivalents |
$ 3,377 |
$ 8,470 |
Current Assets |
3,384 |
8,559 |
Current Liabilities |
1,867 |
1,520 |
Working Capital |
1,517 |
7,039 |
Restricted cash held at EMLLC |
11,046 |
13,025 |
Other restricted cash |
854 |
1,957 |
Total Assets |
331,880 |
337,286 |
Long term debt |
1,340 |
1,340 |
Sr. convertible notes |
5,705 |
5,540 |
Return of contributions payable to POS-Minerals |
33,641 |
33,641 |
Other liabilities |
13,003 |
12,912 |
Long term liabilities |
53,689 |
53,433 |
Contingently Redeemable Non-controlling Interest |
172,638 |
172,659 |
Total Shareholders' Equity |
$ 103,686 |
$ 109,674 |
Closure of Tranche 2 of the Amended Investment Agreement with
As described in the Company's
With the previous closure of Tranche 1 and the issuance of 13.3 million shares in
The third tranche is a
Mt. Hope Permitting Update
Work is continuing of the draft SEIS for the
The Company anticipates receiving the ROD in the first half of 2018.
Mt. Hope Water Rights Update
On
In late 2015 and 2016 the Company filed new water applications with the Nevada State Engineer for the full quantity of water necessary to construct and operate the
Molybdenum Market
Since the beginning of the year, the U.S. molybdenum oxide price per pound has increased 29% to the mid October price level of
During the third quarter of 2017, the U.S. molybdenum oxide price per pound generally rose from a low of
In a recently published Molybdenum Market Outlook Update report, the
While global molybdenum demand is projected to increase 4.8% to 535 million pounds in 2017 over 2016, worldwide molybdenum supply is now projected to increase to 561 million pounds in 2017 from 510 million pounds in 2016, according to CPM. During 2017, higher molybdenum prices and depreciation of the Chinese yuan leading to lower production costs in
CPM projects that after a softer seasonal fourth quarter demand, the molybdenum per pound price to average
Roskill, a global metals and minerals research firm in the
2017 Outlook and Priorities
- Prudently manage financial liquidity and flexibility to sustain the Company over the medium term, including continued stringent cost management throughout the organization, rescheduling of equipment procurement, and funding of current business activities through 2018.
-
Leverage the Company's technical and financial skills and expertise to work jointly with
AMER and others to identify value-accretive acquisition opportunities with a focus on base metal and ferro-alloy prospects in the western hemisphere; -
Effect reinstatement of the ROD, and reissuance of permits for water rights at the
Mt. Hope Project .
About
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.
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, ability to raise required project financing, 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.
- [Editor:Wang Linyan]
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