Medium-term production from world-class moly deposit

Ownership: Owned by Eureka Moly, which is held 80% by General Moly and 20% by POS-Minerals
Location: Eureka County, Nevada, 21 miles north of town of Eureka
Status: Pre-construction work suspended
Mine type/Estimated life*: Open pit/30 years
First 5 years*: 40M lb moly/year at $6.28 cash operating costs/lb;
$6.99 costs applicable to sales per pound, including royalty payments of $0.71/lb at a $15/lb moly price
General Moly’s 80% interest LOM*: NPV= $734M; IRR= 18%
Remaining capex: $1.03B, 100% basis
Outlook: New exploration potential of copper, silver and zinc
Improved financing ability with AMER

Background

The Mt. Hope Project is one of the largest and highest grade primary molybdenum deposits in the world. The project is owned and operated by Eureka Moly, LLC (EMLLC), of which General Moly has an 80% interest and POS-Minerals Corporation, a subsidiary of the South Korean steel company POSCO, has a 20% interest.

View more about General Moly’s strategic partnerships.

The Mt. Hope Project’s plan of operations covers approximately 36 square miles. Year-round access to the project site is from Route 278. The Mt. Hope Project is in the vicinity of other operating hard rock mines with a large experienced mining workforce.

From as early as 1886, and sporadically until circa 1975, the Mt. Hope area produced zinc as well as by-product lead, copper, silver and cadmium from small underground mines. In 2005, a predecessor company of General Moly acquired all of the leasehold rights to the property. In 2008, the Company and POSCO formed the 80%-20% joint venture for the development of the Mt. Hope Project.

Development of the Mt. Hope Project requires re-obtaining water permits from the state of Nevada and a Record of Decision (ROD) approving the Supplemental Environmental Impact Statement from the Bureau of Land Management, project financing, and a sustained improvement in the molybdenum price. The water permits and ROD are anticipated by early 2019.

Technical Report Feasibility Study

The Company filed its updated Technical Report Feasibility Study on the Mt. Hope Project, which was completed in accordance with the Canada National Instrument 43-101 (NI 43-101), in January 2014.

Optional Mine Plan

In February 2014, the Company presented an optional mine plan, which was the result of an internal optimization study based on the geologic block model of the above Technical Report. This plan eliminates marginal lower grade production in later years, reducing stripping costs, tailings expansions and additional mining equipment. The optional mine plan focuses on the high grade core of the deposit and incrementally enhances the project economics.

Figure 1: Leverage to the Molybdenum Price Change & Breakeven Prices

Figure 2: NPV Leverage to Rising Moly Prices

Geology and Mineralization

The Mt. Hope deposit, measuring 1,500 feet in diameter, is centered in an elevated area of igneous rock. The economic mineral is molybdenite. The Mt. Hope molybdenum porphyry deposit is similar to the Climax deposit in Colorado.

The principal moly host rock is quartz porphyry with a well-developed quartz vein stockwork. Approximately 20% of the mineralization occurs in metamorphosed sedimentary rocks, principally hornfels. The ore zones in the quartz porphyry and meta-sedimentary rocks have molybdenite emplaced along the well-developed quartz stockwork veins.

Exploration – Copper, Silver, and Zinc

The Company is advancing exploration of a potential high-grade, copper-silver exploration target along with a significant zinc mineralized area at the Mt. Hope Project site, southeast of the Mt. Hope’s molybdenum deposit in central Nevada.

(Learn more about Exploration)

Future Mining and Processing

When operational, the Mt. Hope mine plan entails open pit mining using one hydraulic and two electric shovels, and a fleet of Caterpillar 240-ton mining trucks.

The Mt. Hope Project will utilize standard crushing, grinding, flotation, concentrate leaching and roasting to produce the saleable product of technical grade molybdenum oxide, commonly called TMO. The mill is designed to process approximately 66,800 tons per day or 240 million tons per year.

Please refer to the Company’s latest Form 10-K for a full description of Mt. Hope Project’s royalties for molybdenum and other non-molybdenum minerals.

Engineering and Equipment Status

Engineering remains approximately 65% complete at the Mt. Hope Project. Currently, there is no ongoing engineering and equipment procurement effort. EMLLC has ordered or purchased most of the long-lead milling equipment, haul trucks and mine production drills, and has maintained an ongoing letter of intent preserving deposits paid and indexed pricing for the purchase of two electric shovels.

EMLLC continues to work with the respective vendors to extend these agreements until the Company obtains financing for the construction of the Mt. Hope Project.

End Notes

The mine life and economic indicators are based on the updated optional mine plan announced in a February 25, 2014 news release, which reported on an internal study that examined an optimized pit using lower molybdenum prices. The internal study used a $10/lb moly mine plan and the geologic block model  from the Canada National Instrument 43-101 Technical Report Feasibility Study, filed in January 2014 and available on the Company’s website.

Operating data represent the averages over the first five years of production under the optional mine plan. Net Present Value and the Internal Rate of Return use the optional mine plan with a $15.00/lb molybdenum price over 24 years of mining and 30 years of mill processing at an 8% discount rate, after tax. Cash flow is based on the same optional mine plan, except it is undiscounted. The optional mine plan relied on the 2014 Feasibility Study’s proven and probable reserves representing 984.6M tons at an average grade of 0.070% containing 1.4B lb of molybdenum. While the above reserves are in accordance with NI 43-101, they are not recognized as reserves by the U.S. SEC.

As reported in the Company’s Form 10-K for 2017, based on an $8.00/lb molybdenum pit design, Mt. Hope Project has proven and probable reserves of 367.4 million tons of ore at an average grade of 0.080% molybdenum. There is also additional mineralized material of 682.5 million tons at an average grade of 0.061% molybdenum. The $8.00/lb pit design used to determine reserves and mineralized material were based on a $10.26/lb moly price, which is the average of the past four years’ average prices of molybdenum and the future four years’ nominal price estimates for molybdenum by the CPM Group, a leading commodities research and consulting firm.

Mt. Hope Project NPV breakeven and cash flow breakeven reflect General Moly’s 80% ownership in the project under the optional mine plan, using a $15.00/lb molybdenum price over 24 years of mining and 30 years of mill processing at an 8% discount rate, after tax.