General Moly Reports Q3 Results and Cost-cutting Initiatives

General Moly Inc. (TSX:GMO,NYSEMKT:GMO) released its unaudited financial results for the third quarter of 2015, commenting that it incurred a net loss of $2.7 million, or $0.03 per share. That’s down from a net loss of $3.2 million, or $0.04 per share, in the year-ago period.
Key Q3 activities include:

Excluding restricted cash, the Company’s cash balance at September 30, 2015 was approximately $15 million compared to $13 million at December 31, 2014 and $18 million at June 30, 2015. During the third quarter, cash use of $3 million was the result of $1 million spent on Mt. Hope Project development costs and$2 million in general and administrative expenses. In January 2015, the Company and POS-Minerals, as the members of Eureka Moly, LLC (“EMLLC”), announced an agreement that provided access to the $36 millionreserve account for Mt. Hope dedicated spend. The EMLLC members agreed in January that the budget will be entirely funded by the reserve account, until at least through 2020. Thus, the reserve account should cover anticipated operating expenses, and committed equipment purchase obligations while the Company seeks full financing for the Mt. Hope Project construction. The Company also announces a further 30% reduction of ongoing future expenses outside of EMLLC.
On November 3, 2015, General Moly announced an amendment to the previously announced Investment and Securities Purchase Agreement (“Investment Agreement”) with AMER International Group (“AMER”), a private, Chinese-based multinational company that is one of the world’s largest advanced materials, fine machining, and downstream metals refining providers, and was ranked #247 on the 2015 Fortune Global 500 list. With the amended Investment Agreement, the parties agreed upon a three tranche investment strategy that will create a strategic partnership and equity investment to assist with General Moly’s ability to secure full project financing for the Mt. Hope Project.

Furthermore, General Moly enacted cost-cutting programs in October:

In October 2015, the Company implemented management restructuring and further cost reduction programs that are expected to lower operating expenses by more than 30% annually, once fully implemented in early 2016. The management restructuring and cost reduction actions are focused on maintaining liquidity and sustainability through cost reductions in engineering, administrative and consulting expenses and trimming ongoing Corporate and Liberty Project care and maintenance expenditures from approximately $2.5 millionper quarter to approximately $1.7 million per quarter.
Specific provisions of the management restructuring and cost reduction programs include:

• A 25% reduction in workforce and the closing of the Company’s engineering office in Tucson, AZ and local office in Eureka, NV.
• A 15 to 25% reduction in base cash compensation for senior executives.
• The retirement of David Chaput as Chief Financial Officer and promotion of Lee Shumway, formerly the Company’s Controller and Treasurer, to Chief Financial Officer. Further executive level changes includeScott Roswell, formerly General Moly’s Corporate Counsel and Vice President of Human Resources, assuming the title of Chief Legal Officer.
• Prudent focus on reducing all other expenditures including engineering, administrative, and consulting expenses.
• Ensuring the sustainability of Eureka Moly LLC funding through the year 2020, via the reserve account held at EMLLC.

Click here to read the full General Moly Inc. (TSX:GMO,NYSEMKT:GMO) press release.