"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.

Wednesday, March 7, 2012

SPECIAL REPORT: General Moly (GMO) - A Call from Good Neighbors

Morning Miners!

It is 6:52 AM. The ole Colonel is interrupting his planned two-day hiatus from the Eureka Miner to bring you this special report. We will return to our normal format tomorrow. Grab a cup of Joe and let's see who's on the phone...

General Moly (GMO) - A Call from from Good Neighbors

Yesterday afternoon I received a call from Zach Spencer of Eureka Moly LLC (our local subsidiary of General Moly). He wanted to set up a conference call with Chief Operations Officer Bob Pennington to give the Eureka Miner an update from the Eureka County Commissioner meeting held yesterday. They called me back about 3:00 PM following this press release which hit the wires at 1:32 PM:

General Moly Presents Good Neighbor Offer to Eureka Stakeholders (Press Release)

Mining Editor Adella Harding did an excellent follow-up piece in the Elko Daily Free Press:

General Moly offers $12 million settlement (ADELLA HARDING Mining Editor, Elko Daily Free Press, Tuesday, March 6, 2012 5:51 pm)

I encourage you to read the press release but essentially General Moly has presented the Eureka Commissioners with a $12 million global settlement offer to resolve the outstanding water rights appeal, "The Offer is comprised of $3 million immediately upon signing of an agreement and dismissal of all appeals before the Nevada District Court and $5 million contributed over time to the Diamond Valley Sustainability Trust. The funds would augment the existing $4 million Diamond Valley Sustainability Trust announced in August 2010, and bring the total commitment to $12 million."

Zach and Bob informed me that the timeline going forward is a second Commissioner's meeting planned for March 20 for public comment followed by a March 30 deadline for acceptance. If the offer is not accepted it's back to district court with Judge Papez April 3 and probably another 3-month "consideration cycle."

To accept the offer the Eureka Commissioners and all co-appellants must agree to sign on. From my view this appears to be a fair offer and the Monitoring Mitigation & Management Plan (the "3M Plan" that's currently under development) appears a reasonable process to close a loop around any unforeseen water depletion issues in the Diamond Valley.

The Eureka Miner respects the views of all miners, farmers and ranchers and their valuable contribution to the future of Eureka County. I hope this offer will provide an equitable path forward for all.

Chief Executive Officer Bruce Hansen concludes the press release saying, "2012 is expected to be a year full of significant milestones for this Company. We anticipate all our State and Federal permits to be issued in the second or third quarter of this year, anticipate closing over $800 million in financing shortly following the BLM's issuance of the ROD, and hope to be constructing our facility before the end of the year. We want to resolve these disputes over our water permits quickly and prepare ourselves, our team, and the Eureka Community for its exciting future. I feel this Offer is more than fair to all stakeholders involved in our project and hope this Offer can allow us to move on with our project."

On a lighter note, Bob said the ole Colonel could "train up" on their CAT 793 simulator so I'll be ready to rock and roll in a CAT 793 haul truck when the first ones arrive at Mt. Hope. Yee-ha!

The best of luck to all!


Colonel Possum

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