[Ferro-Alloys.com]General Moly reported a loss for its first quarter Friday, but is continuing with construction of Mt. Hope and its search for another financial partner.

 

Net loss for the quarter that ended March 31 was $3 million, compared with a loss of $3.2 million for the same period a year ago.

 

General Moly owns 80 percent of Mt. Hope, a molybdenum mine in development about 21 miles north of the town of Eureka.

 

General Moly was told in March that China Development Bank had provided instructions to its legal counsel to suspend work on the $665 million Term Loan. This suspension relates to reports that Liu Han, chairman of Sichuan Hanlong Group, has been detained by Chinese authorities. General Moly is continuing efforts with Hanlong (USA) Mining to secure another strategic partner to help advance the full financing of the Mt. Hope Project.

 

“The company made substantial progress with regards to our preliminary construction activities at Mt. Hope during the first quarter including early well field development, clearing and grubbing of terrain and cultural clearance,” said General Moly Chief Executive Officer Bruce D. Hansen.

 

“We are working with Hanlong to secure another Chinese strategic partner to help advance the full financing of the Mt. Hope Project and reinvigorate advanced stage loan negotiations with China Development Bank. Our efforts to secure such a strategic partner are enhanced, given that we are advancing a fully permitted, construction-ready, high grade/lower cost molybdenum deposit along with our EMLLC partner POS-Minerals.”

 

Excluding restricted cash, General Moly’s cash balance at March 31 was about $57 million compared to $68 million at Dec. 31. During the first quarter, cash use of $16 million was the result of Mt. Hope Project development, engineering, and procurement costs as well as general and administrative expenses partially offset by the receipt of $5 million in contribution payments from POS-Minerals Corporation.

 

In December, the company and POS-Minerals, as members of Eureka Moly, LLC, agreed to hold $36 million of the approximately $100 million received from POS-Minerals’ December 2012 contributions in a reserve account to maintain additional liquidity until the company arranges full project financing.