General Moly Announces Letter of Intent for Formation of Joint Venture With POSCO for Mount Hope Project



    LAKEWOOD, COLO., December 18 /CNW/ - General Moly, Inc. (AMEX:  GMO)
announced that it has entered into a letter of intent with POSCO, the world's
third largest steel producer, pursuant to which POSCO will have the right to
acquire a 20% interest in General Moly's Mount Hope molybdenum project (the
"Mount Hope Project"), subject to negotiation and execution of final
documentation. In order to facilitate the investment, General Moly intends to
form a new entity that will operate the Mount Hope Project on a joint venture
basis. Pursuant to the letter of intent, it is anticipated that POSCO will
make equity contributions to the joint venture totaling $170 million. Payments
by POSCO are anticipated to be $50 million upon signing of definitive
documentation, $50 million on July 1, 2008 and $70 million upon receipt of all
material permits required to initiate full construction of the Mount Hope
Project, which is expected in the first quarter of 2009. It is also
anticipated that POSCO will have rights to 20% of production from the Mount
Hope Project and will be responsible for 20% of total project capital and
operating costs from January 1, 2008 onward.

    Commenting on the letter of intent, Bruce D. Hansen, Chief Executive
Officer of General Moly, said "We are extremely pleased to have POSCO select
Mount Hope as their moly project of choice and General Moly as their moly
partner of choice. We see POSCO as a fantastic long-term sustainable partner
as we finance and develop the world-class 1.3 billion pound Mount Hope
Project. This win-win deal, combined with the equity proceeds received and
off-take arrangement reached with our other strategic investor ArcelorMittal,
dramatically reduces our credit risk and enhances our ability to finance the
remainder of the Mount Hope development requirements."

    General Moly anticipates working with POSCO to close the transaction
prior to the end of January 2008. The Company will continue to selectively
seek additional off-take arrangements, with the goal of establishing
approximately 10 million pounds per year of floor price protected production
over the first five years of production. The molybdenum for these off-take
arrangements will be sourced from General Moly's 80% of production.

    POSCO intends to invest in the Joint Venture through its Canadian
subsidiary, POSCO-Canada, and a Korean domestic subsidiary.

    General Moly, formerly Idaho General Mines, is a U.S.-based molybdenum
mineral development, exploration and mining company listed on the American
Stock Exchange under the symbol GMO. Our primary asset, the Mount Hope Project
located in central Nevada, is considered one of the world's largest and
highest grade molybdenum deposits. Combined with our second molybdenum
property, the Hall-Tonopah project which is also located in central Nevada,
our goal is to become the largest primary molybdenum producer by the middle of
the next decade. For more information on the Company, please visit our website
at http://www.generalmoly.com.

    Forward-Looking Statements

    Statements herein that are not historical facts, such as anticipated
timing for closing of the agreements and other transactions contemplated above
and plans for additional off-take arrangements and goals with respect thereto,
are "forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, and involve a number of risks and uncertainties
that could cause actual results to differ materially from those projected,
anticipated, expected or implied. These risks and uncertainties include, but
are not limited to, the possibility that the Company and POSCO may not be able
to successfully negotiate definitive investment documents for the joint
venture or other aspects of the strategic relationship described above, or
other anticipated difficulties or interruptions. For a more detailed
discussion of risks and other factors that may impact these forward looking
statements please refer to the Risk Factors and other discussion contained in
the Company's quarterly and annual periodic reports on Forms 10-QSB and
10-KSB, as the same are amended from time to time, on file with the SEC. The
Company undertakes no obligation to update forward-looking statements.




For further information:

For further information: General Moly Investors: Seth Foreman,
303-928-8591 sforeman@generalmoly.com Business Development: Greg McClain,
303-928-8601 gmcclain@generalmoly.com http://www.generalmoly.com
info@generalmoly.com

Organization Profile

GENERAL MOLY, INC.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890