"The history of Eureka lies in its future." - Lambert Molinelli, 1878


The author/editor of the Eureka Miner owns common shares of local mining stocks, General Moly (GMO) and Newmont Mining (NEM); together with benchmark miner Freeport-McMoRan (FCX). Please do your own research, markets can turn on you faster than a feral cat.

Monday, November 9, 2009

Genral Moly Reports, Mt. Hope Update

Morning Miners!

It is 6:45 AM and the Colonel has been reading General Moly's (GMO) third quarter report released this morning. Let me pour you a cup of coffee and we'll checkout the highlights. Before we begin, it is worth noting that fear has left the marketplace again; stock markets are roaring and and gold is reaching new highs (presently around $1106 on both the London spot and COMEX futures market). I guess this proves when the dollar is weak and the FED keeps interest rates near zero it will be giddy-up-go for some time to come. Simply amazing!

Here is the link to the complete General Moly Report; investors think it is good stuff, GMO share price is up 5%:


GMO expects the Record of Decision (ROD) for the Mt. Hope Project sometime in the third quarter of 2010 and The BLM should complete their administrative Draft Environmental Impact Statement (EIS) by the end of this year. As reported by Bruce D. Hansen, Chief Executive Officer:

"Finalizing our hydrologic reports after gathering extensive additional data and completing robust models represents a significant milestone in the Mt. Hope permitting effort as it paves the way to see the draft EIS ready for public comment in the first quarter of next year."

GMO looks good through 2010 without accessing new sources of financing. They also present a thorough operating cost and economic analysis of the Mt. Hope Project which remains positive with current molybdenum prices and oil at $80/bbl. Factors are given for higher oil prices and changes in moly pricing so you can do your own the "what if" scenarios.

Finally, there is the following rationale for current moly prices which the Report tracks closely:

"Over the third quarter of 2009, spot molybdenum prices traded between $10.15 and $17.45 per pound, ending the quarter at $14.13 and trading as low as $11.00 per pound more recently. Price fluctuations during the period were primarily attributable to changing Chinese demand patterns. Although Chinese crude steel production continues at record levels, Chinese imports of molybdenum have diminished recently, causing price weakness. Prices well above the lows seen earlier this year continue to be supported by Chinese molybdenum imports, increasing steel capacity utilization rates in developing nations, modestly improving steel capacity utilization in the United States and Europe, an end to global inventory de-stocking, and molybdenum supply reductions."

All that deserves a Colonel Yee-ha for the crew at Eureka Moly and the folks at General Moly HQ!

Enough talk, let's walk the walk:

4-WD is OFF - the VIX or "fear index" is below 25, smoother road market conditions expected (what's this?)

Yellow light is ON for possible adverse regulation/legislation (mercury emissions)

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

Oil is up 1.81 in early trading to $79.24 (December contract); Gold is up $11.3 to $1106.8 (December contract, most active); Silver is down $0.295 to $17.670 (December contract); Copper is down $.0325 to $2.9850 (December contract); Molybdenum steady at $12.00

The DOW is down 11.64 points to 9994.32; the S&P 500 is down 1.94 points to 1064.69. The miners are ballistic:

Barrick (ABX) $43.19 up 3.75%
Newmont (NEM) $50.452 up 2.88%
General Moly (Eureka Moly, LLC) (GMO) $2.59 down 4.86%
Freeport McMoran (FCX) $83.21 up 4.59% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are pouring metal, (a "tell" for General Moly):

Nucor (NUE) $40.93 up 4.04% - domestic steel manufacturing
ArcelorMittal (MT) $36.79 up 4.86% - global steel producer
POSCO (PKX) $116.89 up 3.95% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up a whopping 2.95% to $1,272,469.08 (what is this?).


Colonel Possum

Headline Photograph by Mariana Titus, Ackerman Ranch

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