Sojitz arrangement will invest one million annual pounds

Tag : Molybdenum Oxide
General Moly Inc.'s agreement with Sojitz Corporation provides for the supply of five million pounds per yearof molybdenum for five years, beginning once Mt. Hope reachescommercial production levels. The agreement also provides Sojitzthe exclusive right to distribute General Moly Technical-gradeMolybdenum Oxide (TMO) in Japan and a non-exclusive right to sellGeneral Moly TMO within South Korea.

One million annual pounds sold under the Sojitz arrangement will besubject to a floor price significantly higher than the Mt. Hopeestimated cash costs per pound and are offset by a flat discount tospot moly prices above the floor. The remaining four million annualpounds sold under the agreement will be sold with reference to spotmoly prices without regard to a floor price. The floor-priceprotected pounds will be sold in equal installments on a monthlybasis.

Bruce D. Hansen, Chief Executive Officer of General Moly, said, "Weare very pleased to announce Sojitz as our third significantcustomer at Mt. Hope. This off-take arrangement, together with thepreviously announced arrangements with ArcelorMittal and SeAHBesteel, amount to 11.5 million pounds, or nearly 38%, of ouranticipated share of production from the Mt. Hope Project,protected by floor price arrangements, and approximately one-halfof our anticipated share of production being committed for thefirst five years of operations.

"Investors will take note that these agreements should furtherenhance our ability to access the capital markets in a way ourcompetitors cannot, which we believe will ultimately preserveshareholder value through higher debt leverage and less equitydilution as we seek to finance the remainder of our capital needswith respect to Mt. Hope. With these off-take arrangements in hand,we forecast the ability to more than cover the interest on ourprojected project debt, even if moly prices fall to the level ofour operating costs."

General Moly is a U.S.-based molybdenum mineral exploration anddevelopment company listed on the American Stock Exchange and theToronto Stock Exchange under the symbol GMO. Our primary asset, ourinterest in the Mt. Hope project located in central Nevada, isconsidered one of the world's largest and highest grade molybdenumdeposits. Combined with our second molybdenum property, the Libertyproject that is also located in central Nevada, our goal is tobecome the largest primary molybdenum producer by the middle of thenext decade. For more information on the Company, please visit ourwebsite at http://www.generalmoly.com.

Forward-Looking Statements

Statements herein that are not historical facts, such as statementsrelating to the possibility of accessing capital markets,preservation of shareholder value, projected capital needs for theMt. Hope Project, the amount of interest on any projected projectdebt, anticipated mine production levels, and estimated productionor cash costs, are "forward-looking statements" within the meaningof the Private Securities Litigation Reform Act of 1995, andinvolve a number of risks and uncertainties that could cause actualresults to differ materially from those projected, anticipated,expected or implied. These risks and uncertainties include, but arenot limited to, the Company's ability to obtain required permits tocommence production and its ability to raise required financing,metals price and production volatility, exploration risks andresults, and project development risks. For a detailed discussionof risks and other factors that may impact these forward-lookingstatements please refer to the Risk Factors and other discussioncontained in the Company's quarterly and annual periodic reports onForms 10-Q and 10-KSB, as the same are amended from time to time,on file with the SEC. The Company undertakes no obligation toupdate forward-looking statements.