History
General Moly spent fifteen years trying to finance its Mount Hope molybdenum mine, lost two Chinese partners, and ended in an insider-led Chapter 11 in 2020.
2004-2007: Securing Mount Hope
The company began as Idaho General Mines. In November 2004 it paid $175,000 plus stock for a one-year option on Mount Hope Mines' undeveloped molybdenum deposit in Nevada. By April 2005 it had finished a feasibility study describing a 30-year open-pit mine expected to recover about 700 million pounds of molybdenum, and it closed a $2.25 million private placement to fund permitting. In October 2005 it exercised a 30-year lease, with royalties of 4-6% depending on the molybdenum price.
Funding grew quickly: $30 million in February 2006 at $2.00 per unit, then $25 million in April 2007 for permitting Mount Hope and evaluating Hall Tonopah. The American Stock Exchange certified the shares for listing in August 2006. A Bankable Feasibility Study, a technical milestone toward financing, was completed in August 2007. In October 2007 the company reincorporated in Delaware as General Moly, Inc.
2008-2009: Customers and a partner
In January 2008 General Moly signed its first supply agreement, promising an ArcelorMittal affiliate 6.5 million pounds of molybdenum a year once Mount Hope was producing. In February it brought in POS-Minerals, a POSCO affiliate, which would fund up to $170 million for a 20% stake in a new joint venture, Eureka Moly, LLC, holding the project. In September 2008 Barclays Capital and Credit Suisse were named co-lead arrangers to raise project financing, with the project needing roughly $1 billion. The record for 2009 is quiet.
2010-2013: The Hanlong years
In March 2010 the company signed its most consequential financing deal. Hanlong, a private Chinese mining group, would buy 25% of the company for $80 million and try to arrange a $665 million Chinese bank loan plus a $20 million bridge loan toward a build-out of about $1.15 billion. In August 2010 the Eureka Moly venture agreed to fund an $8-12 million community sustainability trust for water-rights cooperation, and published a preliminary draft environmental impact statement. Hanlong's first $40 million for 12.5% was brought forward to December 2010.
Deadlines kept slipping. In July 2011 the permitting deadline was pushed to as late as December 2012 and the bank-loan window stretched. In October 2012 a new $125 million subordinated loan was added, but the bank loan never came. That loan was terminated in May 2013, and in August 2013 the whole 2010 agreement was ended. Only $40 million of equity and $10 million of bridge financing had arrived. Hanlong stayed as the largest shareholder with a board seat.
2014-2017: Stopgaps and a second Chinese partner
In December 2014 General Moly raised $8.5 million in 10% convertible notes, with CEO Bruce Hansen, CFO David Chaput and other executives buying in. In January 2015 it and POS-Minerals agreed to use up to $36 million of joint-venture cash for expenses, and pushed a $36 million repayment owed to POS-Minerals out to December 2020.
In April 2015 it signed Amer International Group on a similar model: about 25.7% of the company and help arranging roughly $700 million of Chinese bank financing. In December 2015 the deal was split into three closings, and the first raised just $4 million. In August 2017 a $6 million second tranche was accelerated, with the larger third tranche tied to a share-based acquisition or reissued water permits. In October 2017 the Nevada Supreme Court affirmed a ruling vacating Mount Hope's water permits.
2018-2019: Running short
In October 2018 the company raised only $2.3 million in a public offering at $0.25 a unit. In December NYSE American warned it must reverse-split its stock or show sustained price improvement by June 2019. In January 2019 it dismissed PricewaterhouseCoopers to save cash. In March it hired advisors to explore strategic alternatives, including a sale or restructuring of its convertible notes, and took a $900,000 preferred-stock bridge led by Hansen. In May landowner Mount Hope Mines bought $500,000 of the preferred stock, and executives funded a further $300,000.
In August 2019 Amer tried to terminate its agreement, citing US-China tensions, permitting delays and solvency concerns; General Moly disputed this and said Amer had defaulted. A second NYSE American warning followed in September, and noteholders let the company defer a roughly $162,000 interest payment for 90 days. The same month it received the last major federal permit for Mount Hope. Shares on issue rose from 125.8 million at the end of 2017 to 152.0 million at the end of 2019.
2020-2021: Chapter 11
In January 2020 the company exchanged 95% of its maturing notes for new 12% notes due 2022. In March NYSE American gave it until its 2020 annual meeting to pursue a reverse split. In September it agreed to sell its Liberty project (the former Hall-Tonopah deposit) to Pathfinder Minerals, closing for $2 million upfront, while warning of substantial doubt about its ability to continue as a going concern. NYSE American cited a $115.6 million stockholders' deficit and five straight years of losses. On 1 October the company said it would not submit a compliance plan, and trading was suspended.
On 18 November 2020 General Moly filed for Chapter 11 with a $1.4 million loan from insiders (Bruce Hansen, Bong Hansen and New Moly LLC) and a plan to convert that debt into equity in the reorganized company. Mount Hope was never built. The Toronto Stock Exchange delisted the company effective 29 December 2020. On 3 February 2021, auditor Plante & Moran resigned, having already flagged going-concern doubt.
Written from the 43 story beats below (2004 to 9 Feb 2021), which come from the company's own announcements and filings.