General Moly Announces Updated Operating Cost Estimate and Project Economics for Mt. Hope Project

  General Moly Announces Updated Operating Cost Estimate and Project Economics
  for Mt. Hope Project

Business Wire

LAKEWOOD, Colo. -- December 5, 2013

General Moly, Inc. (the "Company") (NYSE MKT and TSX: GMO), a U.S.-based
molybdenum mineral development, exploration and mining company, announced an
updated operating cost estimate and project economics for the Mt. Hope Project
in Eureka County, Nevada.

Bruce D. Hansen, Chief Executive Officer of General Moly, said, “We have
enhanced the granularity of our mine plan and demonstrated the attractive
economics and robust case for the construction and operation of the Mt. Hope
Project. Given the ongoing due diligence supporting our financing efforts, we
were eager to update the mine plan and project economics from our prior
estimates.”

Mr. Hansen added, “While we predictably, and like most industry players, saw
some measure of operating cost escalation, we believe this update compares
favorably to industry trends, and note that the Mt. Hope Project remains well
positioned within the lower quartile of the cost curve for primary molybdenum
development projects and existing primary molybdenum operations. Further, we
feel that the Mt. Hope Project remains the world’s best large scale, low cost,
fully permitted and construction ready primary molybdenum development project.
Given the cost structure of the industry along with growth demand potential,
we feel the molybdenum price will continue to improve in the coming years to a
more sustainable long term level.”

Mr. Hansen concluded, “After completing this exhaustive analysis, we are very
comfortable that our mine plan robustly supports ongoing financing related
due-diligence efforts. In addition, we are continuing to evaluate optimization
scenarios focused on the high grade core of the deposit to develop a plan
option which is targeted at further improving positive annual cash flow for up
to 15 consecutive production years, even at today’s depressed molybdenum
prices.”

MT. HOPE PROJECT OPERATIONAL COST ESTIMATE AND PROJECT ECONOMICS

The Company reviewed forecasted operating costs for the Mt. Hope Project,
based on current labor rates and input commodity prices. Direct operating
costs for the Mt. Hope Project over the first full five years of operation are
anticipated to average $6.28 per pound, and Costs Applicable to Sales (CAS)
are anticipated to average $7.00 per pound, including anticipated royalty
payments calculated at $15.00 per pound of molybdenum, which the Company
regards as a sustainable long-term price. A table reflecting direct operating
costs and CAS per pound follows for the mine plan.

                                                            
                                Direct            Cost            Average
Period                         Operating Cost,  Applicable to  Annual
                                US$/lb^1,3        Sales,          Production,
                                                  US$/lb^1,2,3    Million lb^3
First Full 5 Years of Mining   $6.28            $7.00          40.1
First Full 10 Years of Mining  $6.86            $7.62          37.2
All Years of Mining (34        $7.76            $8.56          31.9
years)
All Years of Milling (41       $7.90            $8.70          28.9
years)

1. Calculated at $90 per barrel oil equivalent energy prices
2. Calculated assuming royalty payments based on $15.00 per pound of
molybdenum
3. On a 100% basis


Reconciliation between Direct Operating Costs, a non-GAAP measure, and Costs
Applicable to Sales (CAS), a GAAP measure, is provided in the table below.

Costs Applicable to Sales (CAS) Reconciliation for First Five Full Years

                          
Direct Operating Cost      $6.28
Royalties^1                $0.72
Cost Applicable to Sales   $7.00

1. Royalty payments are a function of assumed molybdenum prices realized.
Please see the Company's Form 10-K on file with the Securities and Exchange
Commission for additional detail.


On a look forward basis, economics for General Moly’s 80% ownership in the Mt.
Hope Project, at a $15.00 per pound flat long-term molybdenum price,
anticipates an after-tax Net Present Value (NPV), discounted at 8%, to be $707
million and an internal rate of return (IRR) of 17.6%. General Moly’s 80%
ownership in the Mt. Hope Project, which includes the impact of off-takes,
other contractual agreements and specific working capital assumptions, equates
to $7.72 per current outstanding share. For every $1 change in the molybdenum
price between $10 and $20 per pound, the after-tax NPV of the Mt. Hope Project
changes by approximately $190 million. The Mt. Hope Project is NPV breakeven
at an approximate $11.15 per pound molybdenum price and undiscounted cash flow
breakeven (going forward excluding sunk capital as of October 2013) at
approximately $9.75 per pound molybdenum price.

Metal Price After-Tax Sensitivity Analysis

                            
Molybdenum       General Moly     General Moly
Price US$/lb   NPV at 8%,     IRR
                 $million
$12.50         $237           11.7%
$15.00         $707           17.6%
$17.50         $1,195         23.0%
                             

On a look-forward 100% basis, economics for the Mt. Hope Project, at a $15.00
per pound flat long-term molybdenum price, anticipates an after-tax NPV,
discounted at 8%, to be $953 million and generates an IRR of 19.1%. For every
$1 change in the molybdenum price between $10 and $20 per pound, the after-tax
NPV of the Mt. Hope Project changes by approximately $270 million. The Mt.
Hope Project is NPV breakeven at an approximate $11.50 per pound molybdenum
price and undiscounted cash flow breakeven (going forward excluding sunk
capital as of October 2013) at approximately $10.00 per pound molybdenum
price.

The Company now estimates the go-forward capital required for the Mt. Hope
Project, based on 65% completed engineering, to be approximately $1,050
million, of which the Company’s 80% capital requirement is $840million. As of
September 30, 2013, total Mt. Hope Project inception-to-date spend was $260
million. The only significant increase from the capital cost estimate reported
in August 2012 is an additional $20 million for supplementary pre-production
stripping to deliver adequate ore to the mill and an additional $22 million in
escalation.

REPLACEMENT FOR RECENTLY EXPIRED UNIVERSAL REGISTRATION STATEMENT

On December 5, 2013, the Company filed its $500 million universal Registration
Statement, renewing a previously-filed $500 million Registration Statement
that expired in late November 2013.Although the Company has no immediate
intentions to undertake an offering of debt, equity or other securities,
maintaining an effective shelf registration statement provides additional
future flexibility if it decides to access the capital markets, and also
registers the resale of shares issued through the Hanlong and Aperam
transactions, and through outstanding warrant exercises.The Registration
Statement has not yet been declared effective by the Securities and Exchange
Commission.

The Company anticipates filing a National Instrument 43-101 Technical Report
on SEDAR relating to the Mt. Hope Project on or before January 19, 2014, 45
days from the date of this announcement. The scientific and technical
information contained in this news release has been approved and verified by
Conrad E. Huss, P.E., Senior Vice President and Chairman of the Board for M3
Engineering & Technology Corp. for matters relating to milling production,
costs and overall economics, and John M. Marek, P.E., President of Independent
Mining Consultants Inc., for matters relating to mining production and
associated costs. Both are Qualified Persons for the purposes of National
Instrument 43-101.

General Moly is a U.S.-based molybdenum mineral development, exploration and
mining company listed on the NYSE MKT (formerly the NYSE AMEX) and the Toronto
Stock Exchange under the symbol GMO. Our primary asset, our interest in the
Mt. Hope Project located in central Nevada, is considered one of the world's
largest and highest grade molybdenum deposits. Combined with our second
project, the Liberty Project, a molybdenum and copper property also located in
central Nevada, our goal is to become the largest pure play primary molybdenum
producer in the world. For more information on the Company, please visit our
website at http://www.generalmoly.com.

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 maintain
required permits to continue construction, commence production and its ability
to raise required project financing, adverse governmental regulation and
judicial outcomes, including an appeal of the Record of Decision appeal of
water permits and 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.

Contact:

General Moly
Investors
Scott Kozak, 303-928-8591
skozak@generalmoly.com
or
Media
Zach Spencer, 775-748-6059
zspencer@generalmoly.com
http://www.generalmoly.com
info@generalmoly.com
 
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