Strong molybdenum prices weren’t enough to pull pure-play molybdenum explorer and developer General Moly out of the red in Q4 2018.
Strong molybdenum prices weren’t enough to pull General Moly (TSX:GMO,NYSEAMERICAN:GMO) out of the red in Q4 2018.
The US-based pure-play molybdenum explorer and developer reported a consolidated net loss of US$3 million for the last quarter of 2018, an increase of US$1.2 million from the same period in 2017.
The shortfall in Q4 is indicative of the company’s performance over 2018 — for the full year, General Moly posted a net consolidated loss of US$11.1 million, up from its US$8.1-million loss in 2017.
Shares of the industrial metals-focused company were down 6.06 percent on Thursday (March 21) following the announcement.
Despite the loss, company CEO Bruce Hansen remains confident in General’s ability to bring the Nevada-based Mount Hope project into production in the near term.
“We are on the threshold of having the Mt. Hope project fully permitted with final Nevada water permits expected in mid-2019 and the record of decision approving the supplemental environmental impact statement later in 2019,” Hansen said in the press release. “This moves us closer towards the eventual project financing, development and operation of the Mt. Hope moly mine.”
This optimism is reinforced by the positive momentum of the molybdenum oxide spot price, which climbed 37 percent in 2018, from an average of US$8.76 per pound in Q4 2017, to an average of US$12.04 per pound in Q4 2018 — the alloy metal’s best performance in four years.
Moving into Q2 of 2019, General Moly is anticipating additional funding from AMER International Group once the necessary water permits are in place for Mount Hope. Upon receiving the water permits, the third tranche of a US$10-million private placement will be triggered.
General expects to attain the water permits from the Nevada State Engineer by June 6, 2019.
“We look forward to working with the support of AMER, which, under the securities purchase agreement, will help us source and guarantee a US$700 million bank loan for the development of the Mt. Hope project, upon further improved moly prices and receipt of the final permits,” said Hansen.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.