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General Moly ends $125M loan deal for Mount Hope

Keywords: Tags  General Moly, Mount Hope, nolybdenum, Bruce Hansen, Sichuan Hanlong, China Development Bank, Liu Han, Daniel Fitzgerald

NEW YORK — General Moly Inc. and Sichuan Hanlong (Group) Co. Ltd. have agreed to terminate a $125-million loan deal that was intended to supplement a $665-million term loan to finance the Mount Hope molybdenum project in Nevada.

The subordinated loan agreement, which would have become available upon receipt of the Chinese-sourced term loan, was terminated to provide General Moly with greater flexibility in securing an additional Chinese strategic partner, the Lakewood, Colo.-based company said.

The termination also cancels an arrangement fee of $6.25 million payable upon closing of the term loan. A warrant with a two-and-a-half-year maturity to purchase 10 million shares of General Moly common stock at $4.23 per share also was terminated.

"Our efforts to secure such a strategic partner are incrementally enhanced by the elimination of these warrants, which reduces the potential for future dilution," General Moly chief executive officer Bruce D. Hansen said in a statement. "We are actively marketing the Mount Hope project as a fully permitted, construction-ready, high-grade, lower-cost molybdenum deposit supported by our joint-venture partner, POS-Minerals (Corp.), and recently attracted a number of parties in China who are beginning to engage in due diligence."

Hansen said the company also is negotiating an equipment lease agreement on the mobile mining fleet to replace all or part of the subordinated loan agreement component of the Mount Hope project finance plan.

The company recently announced that it was working with Chengdu, China-based Sichuan Hanlong to secure another Chinese financing partner for Mount Hope (, April 4) after negotiations with Sichuan Hanlong and China Development Bank (CDB) for the $665-million loan were suspended following the reported detention of Sichuan Hanlong chairman Liu Han (, March 21).

General Moly announced recently that it was looking to "reinvigorate advanced-stage loan negotiations with CDB" (, May 3).

The $1.28-billion Mount Hope project is expected to produce 40 million pounds of molybdenum annually.

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