General Moly Inc. said March 13 that it is evaluating strategic alternatives amid a "challenging market," with options including possibly selling the company or its assets.
General Moly owns 80% of the Mount Hope molybdenum joint venture with POSCO in Nevada, where the company has assets worth US$88.1 million. It also has over US$9.8 million in assets attributed to the Liberty molybdenum project in Nevada as well as other assets.
General Moly retained XMS Capital Partners, Headwall Partners and Odinbrook Global Advisors to help with the evaluation process, which may also result in sourcing capital financing and restructuring a US$7.1 million convertible debt that matures in December.
As part of a previously announced agreement, General Moly's largest shareholder, AMER International Group, agreed to subscribe to 20 million shares for US$10 million, or 50 U.S. cents apiece, subject to receiving water permits, which the company expects by midyear.
The company said it is in talks with AMER to accelerate a portion of the share purchase. In addition, AMER will help the company secure a US$700 million loan to develop Mount Hope.
In the meantime, General Moly launched a private placement of up to US$900,000 of convertible preferred shares at US$100 apiece with a 5% annual dividend.
The transaction, expected to close in March, remains subject to a definitive agreement and approval by the disinterested members of the board.
The company said the placement will provide the liquidity it needs to continue operations while awaiting the water permits.