General Moly, Inc. a U.S.-based molybdenum mineral development, exploration, and mining company, announced that it has signed definitive agreements with a group of accredited investors related to a private placement of units, consisting of senior convertible notes and warrants) for gross proceeds of $8.535 million. The Private Placement closed on Dec. 23, with proceeds from the offering to be used for maintenance of the Mt. Hope Project, the Liberty Project, and general corporate purposes.
Bruce D. Hansen, Chief Executive Officer, said, “We are gratified by the demand for this Private Placement despite a challenging market, which speaks to the high quality and the advanced stage of our Mt. Hope Project, along with the inherent tangible value of the Company’s assets. We are pleased with the terms of the financing, which provides the Company with a bridge to a project financing for Mt. Hope while minimizing the dilution to our shareholders. Of significance, one $5 million block was purchased by an investor with significant experience in the molybdenum sector, and General Moly’s executive management team and board of directors supported the Private Placement by investing over $2 million in aggregate. We believe that the investment made by our management team and board of directors provides a strong statement of support for the future prospects of General Moly.”
The Company sold 85,350 units for $100 each. Each unit consists of one senior convertible note due 2019 (the “Notes”) with principal value of $100 and 100 five-year warrants to purchase the Company’s common stock at $1 per share. The Notes, which are senior to any General Moly debt obligations, mature on Dec. 26, 2019.
Hansen concluded, “The Company remains focused on Mt. Hope financing, and is increasingly encouraged by the progress made. Negotiations on investment agreement terms, sponsorship requirements, and indicative loan terms associated with a $700 to $750 million debt and equity package, are continuing to advance. We have strong interest from multiple private Chinese industrial companies and a large Chinese bank in advancing the fully permitted, construction-ready project. These potential Chinese partners take a long term view, and believe as we do, that the molybdenum price should strengthen by the time Mt Hope will start producing.”
In addition to the Private Placement, General Moly has taken further recent actions to improve it liquidity position. The Company reduced ongoing spending requirements resulting in annual savings of over $2 million per year. Additionally, the Company is engaged in ongoing discussions with POS-Minerals to utilize the $36 million of General Moly’s restricted cash to fund ongoing Mt. Hope related expenditures.