General Moly ; UpdatePosted: August 2, 2012 | |
Costs creeped…but solution tabled.
General Moly announced an update to the Mt. Hope Project’s capital cost estimate, which has increased by $130 million, or 11% in total, to $1.284 billion of which $197 million has already been spent.
General Moly’s 80% share of the increase is $104 million. The company also announced that it has entered into a non-binding letter of intent with Hanlong (USA) Mining to provide additional capital to the Mt. Hope Project, up to $125 million in subordinated debt to supplement a previously announced $665 million Chinese sourced term loan that is being negotiated with China Development Bank, which is anticipated to meet the incremental project funding requirements.
Commenting on the news, General Moly’s CEO, Bruce Hansen, stated, “I am very pleased that the Mt. Hope Project has not seen the type of extraordinary escalation in its capital estimate as other projects have recently realized. Although an 11% increase is not an insignificant amount, we have benefited by the advanced engineering and scope definition for the Mt. Hope Project, and the fact that the 2008 estimate was completed pre-financial crisis, along with the previously purchased or contracted major long lead items that have not been subject to significant price escalation.”
The Mt. Hope project, located in central Nevada, is considered one of the world’s largest and highest grade molybdenum deposits.