RBC Capital Markets: Underperform rating and $2.30 price target for General Moly Inc.
According to RBC Capital Markets:
Price Target: USD 2.30 ↓ 3.50
Still working to secure another strategic partner: General Moly continues to work with Hanlong to secure an additional Chinese strategic partner to advance financing for the Mt. Hope project. General Moly believes a Chinese partner is the best route to finance the project due to the advanced stage of negotiations with the China Development Bank. On March 20 General Moly announced that legal counsel had suspended work on the $665 million term loan being negotiated with the China Development Bank until further notice. The suspension was related to media reports that Mr. Liu Han, Chairman of Hanlong, was detained by Chinese authorities.
Early construction activities continue: Work on cultural clearance, clearing and grubbing, wood harvesting, and development of early construction water progressed as planned. Areas for the mine, process plant, and tailings dam have been substantially cleared in preparation for earthworks. Ames Construction has completed four miles of water pipeline (8 miles planned in total) to supply construction water to the plant site.
Challenge issued to Record of Decision: In February 2013 a Motion of Preliminary Injunction was filed challenging the ROD issued for the Mt. Hope project. General Moly has filed its opposition to the motion. Currently neither a hearing date nor a ruling have been given. General Moly believes the ROD complies with all federal statutes and rules.
Project update: Engineering is approximately 64% complete. Most of the long-lead milling equipment, haul trucks, and mine production drills have been ordered or purchased. General Moly has also entered into a letter of intent to purchase electric shovels.
Current financial position: General Moly had $56.9 million in cash at the end of Q1/13
Estimate revisions: We have revised our estimates for the Q1/13 balance sheet and have pushed first production at Mt. Hope out to 2016 from 2015.