General Moly, Inc.
Annual Report 2011

Plain-text annual report

Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549 FORM 10-K xxANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934 For the fiscal year ended December 31, 2011 ooTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934 For the transition period from to Commission file number: 001-32986 GENERAL MOLY, INC.(Exact Name of Registrant as Specified in Its Charter) Delaware91-0232000(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.) 1726 Cole Blvd., Suite 115Lakewood, CO80401(Address of principal executive offices)(Zip Code) Registrant’s telephone number, including area code: (303) 928-8599 Securities registered pursuant to Section 12(b) of the Act: Common Stock, par value $0.001 per shareNYSE Amex and Toronto Stock Exchange(Title of Each Class)(Name of each Exchange on Which Registered) Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes x No o Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period thatthe registrant was required to submit and post such files). Yes x No o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not becontained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K. x Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Seedefinitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer oAccelerated filer x Non-accelerated filer oSmaller reporting company o Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x As of June 30, 2011, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $144,709,686 based on theclosing price as reported on the NYSE Amex. As of February 28, 2012, 91,185,249 shares of the registrant’s common stock, par value of $0.001 per share, were outstanding. Table of Contents DOCUMENTS INCORPORATED BY REFERENCE Certain portions of the registrant’s definitive proxy statement to be used in connection with its Annual Meeting of Stockholders and to be filed within 120 daysof December 31, 2011 are incorporated by reference into Part III, Items 10-14, of this report on Form 10-K. TABLE OF CONTENTS Page Part I ITEMS 1 & 2.BUSINESS AND PROPERTIES3 ITEM 1A.RISK FACTORS25 ITEM 1B.UNRESOLVED STAFF COMMENTS34 ITEM 3.LEGAL PROCEEDINGS34 ITEM 4.MINE SAFETY DISCLOSURES34 Part II ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUERPURCHASES OF EQUITY SECURITIES35 ITEM 6.SELECTED FINANCIAL DATA37 ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS37 ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK47 ITEM 8.FINANCIAL STATEMENTS50 ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE75 ITEM 9A.CONTROLS AND PROCEDURES76 ITEM 9B.OTHER INFORMATION76 Part III ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE77 ITEM 11.EXECUTIVE COMPENSATION77 ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATEDSTOCKHOLDER MATTERS77 ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE77 ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES77 Part IV ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES78 SIGNATURES82 Table of Contents PART I ITEMS 1 & 2. BUSINESS AND PROPERTIES The Company References made in this Annual Report on Form 10-K to “we,” “our,” “us,” “GMI,” and the “Company” refer to General Moly, Inc. and itsconsolidated subsidiary Eureka Moly, LLC. We are a development stage company in the business of the exploration, development and mining of properties primarily containing molybdenum. Our primary asset is an 80% interest in the Mt. Hope Project (“Mt. Hope Project”), a primary molybdenum property, located in Eureka County, Nevada. TheMt. Hope Project has contained proven and probable molybdenum reserves totaling 1.3 billion pounds (1.1 billion pounds owned by GMI) of which1.1 billion pounds (0.9 billion pounds owned by GMI) are estimated to be recoverable. We are currently in the process of acquiring regulatory approvals andproject financing for the Mt. Hope Project. In 2006, we acquired a second significant molybdenum project, the Liberty Property (“Liberty Property”), locatedin Nye County, Nevada, which we wholly own. The Liberty Property is anticipated to become our second molybdenum operation, after commencement ofcommercial production at the Mt. Hope Project, with initial production dependent on market conditions. Mt. Hope Project. In August, 2007, we completed a Bankable Feasibility Study (“Bankable Feasibility Study” or “BFS”) that provided data onthe viability, expected economics, and production and cost estimates of the project. Since publication of the BFS, we have revised several estimates, basedprimarily on engineering progress, which is currently 60% complete. Our current estimates for the Mt. Hope Project capital cost requirements are referred to asthe “Project Capital Estimate” and our current estimates for the Mt. Hope Project operating costs are referred to as the “Project Operating Cost Estimate”. Estimated costs for construction, equipment, owner’s cost, pre-stripping and contingency are $1,039 million. Additionally, financial assurance andpre-paid items are estimated at $115 million, resulting in a total Project Capital Estimate of $1,154 million. The Project Capital Estimate is based on 2009constant dollars and is subject to escalation. We anticipate updating the Project Capital Estimate later this year. These amounts do not include financing costsor amounts necessary to fund operating working capital and potential capital overruns. Through December 31, 2011, we have made deposits of $66.5million on $119.4 million in equipment orders, have spent approximately $110.5 million for the development of the Mt. Hope Project and have pre-paid $12.0million into an escrow arrangement for electricity transmission services. Approximately $38.8 million of the $119.4 million in outstanding equipment ordersis attributed to a non-binding purchase order for 2 electric shovels. This amount will not become a liability of the Company until such time as a bindingpurchase order is placed. Our Project Operating Cost Estimate projects (on a 100% basis) molybdenum production of approximately 40 million pounds per year for the firstfive years of operations at projected average direct operating costs of $5.29 per pound, based on $80 per barrel oil equivalent energy prices. The CostsApplicable to Sales (“CAS”) per pound, including anticipated royalties calculated at a market price of $15 per pound molybdenum, are anticipated to average$6.00 per pound. For a reconciliation of direct operating costs, a non-GAAP measure, see page 19. We currently estimate that, for each $10 per barrel changein oil-equivalent energy costs, the Mt. Hope Project’s direct operating costs will change by approximately $0.10 per pound. These cost estimates are based on2009 constant dollars and are subject to cost inflation or deflation. In the past several years, operating costs in the mining industry have escalated on a world-wide basis as a result of major factors beyond our control, including the cost of energy and labor. We anticipate updating these operating cost estimates laterthis year. Processed ore grades are expected to average 0.103% over the first five years. The mine is anticipated to have a 44-year life with 32 years of open pitmining and processing operations followed by 12 years of processing lower grade stockpiled ore. The Company continues to operate under a cash conservation plan implemented in March 2009 designed to reduce expenditures and conserve cash inorder to maximize financial flexibility until the Company acquires regulatory approvals and project financing. Engineering efforts related to the Mt. HopeProject were restarted in January 2012 following the publication of the Draft Environmental Impact Statement (“DEIS”) on December 2, 2011. We expect thatthe Record of Decision (“ROD”) will be received between June and September 2012. 3Table of Contents As of March 2009, the Company had issued purchase orders for mining and milling process equipment. Some orders for mining equipment werecancelled, while orders for electric shovels and haul trucks were modified to become cancellable or non-binding. Most equipment orders for the custom-builtgrinding and other milling process equipment are being completed by the manufacturers and the equipment is being stored. The grinding and milling processequipment required the longest lead times and maintaining these orders was critical to the Company’s ability to rapidly restart the Mt. Hope Projectdevelopment. The Company completed negotiations with other equipment manufacturers to suspend or terminate fabrication of other milling equipment. Asfunding becomes available and equipment procurement is restarted, agreements that were suspended or terminated will be renegotiated under new market termsand conditions, as necessary. Based on our current plan, we expect to make additional payments on milling process equipment orders of approximately $3.7 million in 2012 and$13.0 million in 2013. We will own the gyratory crusher, semi-autogenous grinding and ball mills and related electric mill drives, and some other long-leadequipment based on payments previously made and the final payments expected to be made in 2012 and early 2013. Also, at December 31, 2011, we have acontract to purchase two electric shovels that is cancellable, has no firm schedule of payments, and includes a $3.4 million deposit that is forfeitable if anadditional $13.0 million deposit is not made by June 30, 2012. The Company continues to need this equipment for construction phase mine development andpost-construction mining, and is committed to either renegotiate the timing and amount of the contractual deposit terms to provide more payment flexibility orobtaining additional funding sources in order to make this payment without impacting our liquidity position. On February 28, the Company issued a firm purchase order for 18 haul trucks to Cashman Equipment Company, the Nevada-based dealer forCaterpillar. The order provides for delivery of those haul trucks required to perform initial mine development, currently scheduled for the second half of2013. A non-refundable down-payment of $0.6 million was made at the time of order with an additional $0.6 million due 12 months prior to truck shipment,but the contract is cancellable with no further liability to the LLC up until the time of truck shipment. An additional 6 haul trucks are not required until afterthe commencement of commercial production, and will be ordered at a future date. The cash conservation plan has reduced our total cash utilization for general administrative and overhead expenses to approximately $1 million permonth, inclusive of maintenance costs at the Liberty Property. Such ongoing costs, combined with the $3.7 million in process equipment commitments andthe $9.0 million in construction royalty advances both described in Note 10, comprise the spending requirements the Company has in place through the endof 2012 without restarting the project. Based on our current cash on hand and our ongoing cash conservation plan, the Company expects it will have adequateliquidity through the restart of the project and execution of the financing plan without needing to drawdown available funds from the second tranche of theBridge Loan. From October 2005 to January 2008, we owned the rights to 100% of the Mt. Hope Project. Effective as of January 1, 2008, we contributed all of ourinterest in the assets related to the Mt. Hope Project, including our lease of the Mt. Hope Project into a newly formed entity, Eureka Moly, LLC (“LLC”), aDelaware limited liability company, and in February 2008 (“Closing Date”) entered into an agreement (“LLC Agreement”) for the development and operation ofthe Mt. Hope Project with POS-Minerals Corporation (“POS-Minerals”) an affiliate of POSCO, a large Korean steel company. Under the LLC Agreement,POS-Minerals owns a 20% interest in the LLC and General Moly, through a wholly-owned subsidiary, owns an 80% interest. The ownership interests and/orrequired contributions under the LLC Agreement can change as discussed below. Pursuant to the terms of the LLC Agreement, POS-Minerals made its first and second cash contributions to the LLC totaling $100.0 million duringthe year ended December 31, 2008 (“Initial Contributions”). Additional amounts will be due from POS-Minerals within 15 days after the date (“RODContribution Date”) that specified conditions (“ROD Contribution Conditions”) have been satisfied. The ROD Contribution Conditions are (i) the receipt ofmajor operating permits for the Mt. Hope Project, (ii) confirmation that the Record of Decision (“ROD”) from the United States Bureau of Land Management(“BLM”) for the Mt. Hope Project has become effective, and (iii) any administrative or judicial appeals with respect thereto are final. We are currently targetingthe effectiveness of the ROD and the satisfaction of the other ROD Contribution Conditions to occur between June and September 2012. However,circumstances beyond our control, including reviewing agency delays or requests for additional information or studies, and requests for review or appeals ofthe BLM decision, could cause the effectiveness of the ROD and/or the satisfaction of the other ROD Contribution Conditions to be delayed beyond thatestimated time. Once the ROD is effective and financing is in place, we expect that production will begin approximately 20 months following initiation ofproject construction. To maintain its 20% interest in the LLC, POS-Minerals will be required to make an additional $56.0 million contribution plus its 20% share of allMt. Hope Project costs incurred from the Closing Date to the ROD Contribution Date 4Table of Contents within 15 days after the ROD Contribution Date. If POS-Minerals does not make its additional $56.0 million contribution when due after the RODContribution Date, its interest will be reduced to 10%. In addition, as commercial production at the Mt. Hope Project was not achieved by December 31, 2011, the LLC may be required to return to POS-Minerals $36.0 million of its contributions to the LLC, with no corresponding reduction in POS-Minerals’ ownership percentage. Based on our current planand assuming POS-Minerals has made its additional $56.0 million contribution, a payment to POS-Minerals of $36.0 million will be due 20 days after thecommencement of commercial production, as defined in the LLC Agreement. We currently anticipate such payment being made during 2014. If POS-Minerals does not make its additional $56.0 million contribution when due, no return of contributions is required by us. Our wholly-owned subsidiary and80% owner of the LLC, Nevada Moly, LLC (“Nevada Moly”), is obligated under the terms of the LLC Agreement to make capital contributions to fund thereturn of contributions to POS-Minerals, if required. If Nevada Moly does not make these capital contributions, POS-Minerals has an election to either makea secured loan to the LLC to fund the return of contributions, or receive an additional interest in the LLC of approximately 5%. In the latter case, our interestin the LLC is subject to dilution by a percentage equal to the ratio of 1.5 times the amount of the unpaid contributions over the aggregate amount of deemedcapital contributions (as determined under the LLC Agreement) of both parties to the LLC (“Dilution Formula”). At December 31, 2011, the aggregate amountof deemed capital contributions of both parties was $880.0 million. Furthermore, the LLC Agreement permits POS-Minerals to put its interest in the LLC to Nevada Moly after a change of control of Nevada Moly orthe Company, as defined in the LLC Agreement, followed by a failure to use standard mining industry practice in connection with development and operationof the Mt. Hope Project as contemplated by the parties for a period of twelve consecutive months. If POS-Minerals puts its interest, Nevada Moly or itstransferee or surviving entity would be required to purchase the interest for 120% of POS-Minerals’ contributions to the LLC plus 10% interest per annum. The Initial Contributions of $100.0 million that were made by POS-Minerals during 2008 were expended by the second quarter of 2009 in accordancewith the program and budget requirements of the Mt. Hope Project. Nevada Moly is required, pursuant to the terms of the LLC Agreement, to advance fundsrequired to pay costs for the development of the Mt. Hope Project that exceed the Initial Contributions until the ROD Contribution Date, at which point thecontributions described above to be made by POS-Minerals will be applied to reimburse us for POS-Minerals’ share of such development costs. All costsincurred after the ROD Contribution Date will be allocated and funded pro rata based on each party’s ownership interest. POS-Minerals’ share of suchdevelopment costs amounted to approximately $37.5 million as of December 31, 2011. The interest of a party in the LLC that does not make its pro ratacapital contributions to fund costs incurred after the ROD Contribution Date is subject to dilution based on the Dilution Formula. Agreements with Hanlong (USA) Mining Investment Inc. We have signed a series of agreements (the “Hanlong Transaction”) with Hanlong (USA) Mining Investment, Inc. (“Hanlong”), an affiliate ofSichuan Hanlong Group, a large privately held Chinese company. The agreements described below form the basis of a $745 million transaction that isintended to provide the Company with adequate capital to develop the Mt. Hope Project. The agreements include: (a) a Securities Purchase Agreement thatprovides for the sale to Hanlong of shares of our common stock in two tranches that will aggregate 25% of our outstanding stock on a fully diluted basis for$80 million ($40 million per tranche), conditioned upon us receiving permits for Mt. Hope and Hanlong’s use of commercially reasonable efforts to procure a$665 million loan from a Prime Chinese Bank for our use in constructing Mt. Hope; (b) a Bridge Loan whereby Hanlong will provide up to $20 million tothe Company to preserve liquidity until permits are received; (c) a Stockholder Agreement that provides Hanlong representation on our Board of Directors andthe LLC management committee, governs how Hanlong will vote its shares of the Company and limits Hanlong’s ability to purchase or dispose of oursecurities; and (d) a long-term molybdenum supply off-take agreement. The Securities Purchase Agreement (“Purchase Agreement”) Stock Purchase. The Purchase Agreement provides, subject to its terms and conditions, for the purchase by Hanlong of $80.0 million of ourcommon stock, or approximately 27.6 million shares, which will equal 25% of our outstanding common stock on a fully-diluted basis. The Purchase Agreement has been amended four times including: (1) July 30, 2010 amendment extending the deadline for obtaining Chinesegovernment approvals by two months to October 13, 2010, as well as extending the Company’s deadline for publishing its DEIS and receiving its ROD toFebruary 28, 2011, and November 30, 2011, respectively. Hanlong has received Chinese government approvals for its equity investment in us and our DEIShas been 5Table of Contents published; (2) an October 26, 2010 amendment setting the closing of Hanlong’s purchase of the first $40.0 million tranche of equity for December 20, 2010and eliminating the condition that required us to have our DEIS published prior to closing this funding; (3) a December 20, 2010 amendment that made certainnon-substantive changes in connection with the Tranche 1 closing; and (4) July 7, 2011 amendment that eliminated the deadline for publication of the DEIS,extended the ROD deadline from November 30, 2011 to the earlier of nine months following DEIS publication or September 30, 2012, extended Hanlong’scommitment to make available the Term Loan from two months following ROD to nine months following the ROD, and extended the maturity date of theBridge Loan to the earlier of (i) 270 days after the issuance of the ROD, (ii) the date on which the Purchase Agreement terminates, and (iii) the earlier ofDecember 31, 2012 and the availability of the Term Loan. The ROD deadline is extendable by up to three months to December 31, 2012, as discussed below. The Purchase Agreement may be terminated byeither party (provided the terminating party is not in default) if the closing of the second tranche (“Tranche 2”) has not occurred on or before the earlier ofSeptember 30, 2012 (unless the parties have agreed to the ROD Condition Extension date of December 31, 2012) or twelve months after the issuance of theROD. As discussed above, the second tranche will also be for a purchase price of an additional $40.0 million. Significant conditions to the closing ofTranche 2 include issuance of the ROD for the Mt. Hope Project by the BLM, approval of the plan of operations for the Mt. Hope Project (the “POO”) by theBLM, and the completion of documentation for and satisfaction of conditions precedent for the availability of funding under the Term Loan, described below. Hanlong will have the right to purchase a portion of any additional shares of common stock that we issue so that it can maintain its percentageownership, unless its ownership is at the time below 5% at the earlier of the closing of Tranche 2 or closing of the Term Loan. It may also acquire additionalshares so that it maintains a 20% indirect interest in the Mt. Hope Project if our interest in the LLC is reduced below 80%. If we issue shares to fund theMt. Hope Project under certain circumstances, and on or before the date of commercial production, and Hanlong exercises its rights to maintain its percentageinterest, we will be obligated to refund to Hanlong the cost of such shares over a three-year period up to an aggregate of $9.0 million. Break Fees. A break fee is payable by both the Company and Hanlong if the Purchase Agreement terminates because of the failure of certainconditions. A break fee of $10.0 million is payable to the Company if the Purchase Agreement is terminated because Hanlong fails to obtain necessary Chinesegovernment approvals, which may be offset against any balances owed by the Company under the Bridge Loan. A break fee of $5.0 million is payable toHanlong if the ROD is not timely received or the condition waived and the Purchase Agreement is terminated. The Company’s break fee may be increased by$5.0 million if the Purchase Agreement is terminated and the Company has violated the “no-shop” provisions of the Purchase Agreement. The break fees mayalso be increased by up to $2.0 million if the Company requests and Hanlong grants an extension concerning the ROD (the “Extension Fee”). Any such feewill be credited against the arrangement fee described below. The break fee payable by the Company to Hanlong may be paid in cash, or, in certaincircumstances, in shares of our common stock at our option. If paid in shares, the price would be the volume weighted average of our common stock on theNYSE Amex for the five days ending six days after the announcement of the termination. On January 9, 2012, the Company and Hanlong executed an optionagreement concerning the Purchase Agreement for no consideration. The option must be exercised on or before December 31, 2012. If the option is exercised,the parties will amend the Purchase Agreement to extend payment of the Extension Fee from December 2012 until April 30, 2013. Chinese Bank Term Loan. Hanlong is obligated to use commercially reasonable efforts to procure a Term Loan in an amount of at least$665.0 million with a term of at least 14 years after commercial production begins at the Mt. Hope Project. The Term Loan will bear interest at a rate tied tothe London Interbank Offered Rate (“LIBOR”) plus a spread of between 2% and 4% per annum. The Purchase Agreement provides that the Term Loan willhave customary covenants and conditions; however, the terms of the Term Loan have not yet been negotiated with the lender and we have no assurance as tothe final terms of the Term Loan. On February 16, 2012, the Company announced China Development Bank (“CDB”) had confirmed the basic termsunderlying a proposed $665 million term loan to finance the Mt. Hope project, including a CDB commitment to lend $399 million and arrange a consortiumof Chinese and international banks to fund the balance. The term loan is anticipated to carry a maturity of 12 years including a 30 month grace period toallow for the construction of the Mt. Hope project. The interest rate will remain subject to market conditions and Chinese government policy. The Companyand Hanlong are continuing to work with CDB with a target of having the loan completed, approved and available to the Company upon receipt of Mt. Hope’soperating permits. Hanlong or an affiliate is obligated to guarantee the Term Loan. When funds can be drawn by the Company under the Term Loan, theCompany will pay a $15.0 million arrangement fee to Hanlong who will pay fees and expenses associated with the Term Loan before the Term Loan Closing,including those charged by the Chinese bank. 6Table of Contents Bridge Loan Hanlong agreed to provide a $20.0 million Bridge Loan to the Company, available in two equal $10.0 million tranches. On April 28, 2010, we drewdown the first $10.0 million tranche. The second tranche became available after receiving stockholder approval of the Hanlong Transaction. The first trancheof the Bridge Loan bears interest at LIBOR plus 2% per annum. The second tranche of the Bridge Loan will bear interest at 10% per annum and is undrawn. The Bridge Loan will be repaid from the proceeds of the Term Loan. The second tranche may also be repaid at the Company’s election, in shares of theCompany’s common stock. If paid in shares, the price would be the volume weighted average of the Company’s shares on the NYSE Amex for a five-dayperiod after public announcement of the event that required repayment. The Company may offset its right to receive the break fee against its obligations torepay borrowings under the Bridge Loan. On January 9, 2012, the Company and Hanlong executed an option agreement concerning the Bridge LoanAgreement. The option must be exercised on or before December 31, 2012. If exercised, the parties will amend the Bridge Loan Agreement to extend thematurity date of the Bridge Loan from December 31, 2012 to April 30, 2013. This option also has the effect of potentially extending the availability of theundrawn $10.0 million second tranche to April 30, 2013 since the availability of the second tranche ends the earliest of the Tranche 2 closing date, thematurity date of the Bridge Loan and the first borrowing under the Term Loan. The outstanding balance of the Bridge Loan and related accrued interest are recorded as a current liability as of December 31, 2011 as the Companyanticipates the Term Loan will become available within the next twelve months. The Bridge Loan and our obligation to pay a break fee to Hanlong under thePurchase Agreement are secured by a pledge by us of a 10% interest in the LLC. Stockholder Agreement In connection with Hanlong’s purchase of our shares, Hanlong signed a Stockholder Agreement with the Company that limits Hanlong’s futureacquisitions of our common stock, provides for designation of up to two directors to our Board and representation on the LLC management committee, andplaces some restrictions on Hanlong’s voting and disposition of our shares. After the Tranche 1 closing, Hanlong became entitled to nominate one director to serve on our Board and one representative to the LLC managementcommittee. Nelson Chen currently serves in both of these capacities. After the Tranche 2 closing, Hanlong will be entitled to nominate a second director. TheCompany will include and recommend the election of Hanlong’s nominees in the Board’s slate of nominees submitted to our stockholders, subject to theBoard’s fiduciary obligations concerning nomination of directors and compliance by the nominee with applicable law and Company requirements concerningdisclosure of information. The Hanlong nominees may also serve on committees for which they are eligible. Hanlong has agreed not to purchase additional shares, except as permitted by the Purchase Agreement, without the Company’s prior consent, andhas agreed that it will not solicit proxies, join a group with respect to our equity securities, solicit or encourage an offer from another person for the Company,call a meeting of the Company’s stockholders or make a proposal to the Company’s stockholders, except to the Board. If our Board receives an offer for theCompany, for its assets or a merger that the Board determines is in the best interests of the Company’s stockholders, Hanlong is required to vote in favor ofsuch a transaction or tender its shares unless it proposes an alternative transaction that our Board determines is more favorable to our stockholders than theoffer received. Hanlong may not, without the prior written consent of the Board, transfer ownership of their securities if the recipient would acquire beneficialownership of more than 5% of our common stock as of the date of such transfer. The restrictions on Hanlong’s share ownership, voting, disposition anddrag-along rights will terminate on the earlier of the time that Hanlong owns less than 10% of our common stock, the date that is 6 months after the date thatcommercial production begins at the Mt. Hope Project, and June 30, 2014. 7Table of Contents ArcelorMittal n/k/a APERAM Participation The Company’s November 2007 private placement of 8.257 million shares with ArcelorMittal, included certain anti-dilution rights. Pursuant tothose rights, ArcelorMittal had an option to participate in the Tranche 1 and Tranche 2 equity issuances. On April 16, 2010, the Company and ArcelorMittalentered into a Consent and Waiver Agreement (the “Agreement”) whereby ArcelorMittal waived its anti-dilution rights with respect to the Company’s proposedissuance of stock under the Hanlong investment. ArcelorMittal will retain anti-dilution rights for future issuances of Company stock outside of shares soldunder the Hanlong investment. On January 25, 2011, the boards of directors of ArcelorMittal S.A. and APERAM each approved the transfer of the assetscomprising ArcelorMittal’s stainless and specialty steels businesses from its carbon steel mining businesses to APERAM, a separate entity incorporated in theGrand Duchy of Luxembourg. This transfer included the off-take agreement the Company had in place with ArcelorMittal and the shares of the Company’scommon stock previously owned by ArcelorMittal. Liberty Property In March 2006, we purchased the Liberty Property in Nye County, Nevada, including water rights, mineral and surface rights, buildings andcertain equipment, from High Desert Winds LLC. The Liberty Property includes the former Hall molybdenum and copper deposit that was mined by open pitmethods between 1982 and 1985 by the Anaconda Minerals Company (“Anaconda”) and, between 1988 and 1991, by Cyprus Metals Company(“Cyprus”). In addition, Equatorial Tonopah, Inc. mined copper from 1999 to 2000 on this property, although their operations were in a separate open pit. Much of the molybdenum deposit was drilled but not developed or mined by these previous owners. In January 2007, we purchased the corporation that owned a 12% net smelter royalty on the Liberty Property, effectively eliminating all third partyroyalties on the property. Additionally in 2007, we purchased all outstanding mineral claims associated with this property that were not previously owned byus, thus giving us control over all mineral rights within the boundary of the Liberty Property. Since purchasing the Liberty Property, we completed two drilling programs that, combined with previous evaluation work performed by formerowners, identified mineralization totaling 541.4 million tons with ore grades averaging 0.067% molybdenum and 0.08% copper. In April 2008 we completed apre-feasibility study outlining project viability, expected economics, and production and cost estimates. On October 3, 2011 the Company released an updatedNational Instrument 43-101, Standards of Disclosure for Mineral Projects (“NI 43-101”) compliant resource estimate and on November 15, 2011 releasedan updated pre-feasibility study detailing updated resource estimates and project economics. The NI 43-101 is a codified set of rules and guidelines forreporting and displaying information related to mineral properties owned by, or explored by, companies which report these results on stock exchanges withinCanada. The completed report estimates molybdenum and copper reserves and resources, production, capital and operating cost parameters, along with projecteconomics. The Company spent approximately $0.9 million to complete the pre-feasibility study and NI 43-101. Other Mining Properties We also have mining claims and land purchased prior to 2006 which consist in part of (a) approximately 107 acres of fee simple land in the LittlePine Creek area of Shoshone County, Idaho, (b) six patented mining claims known as the Chicago-London group, located near the town of Murray inShoshone County, Idaho, (c) 265 acres of private land with three unpatented claims in Josephine County, Oregon, known as the Turner Gold project, (d) anundivided 50% interest in the reserved mineral rights known as the Margaret Property and 105 unpatented mining claims comprising the Red BonanzaProperty, situated in the St. Helens Mining District, Skamania County, Washington; and (e) 34 unpatented mining claims in Marion County, Oregon, knownas the Detroit property. Our efforts at these properties are minimal and consume no significant financial resources. We have entered into option to purchase agreements on three of these properties. See Note 4 for additional discussion on these agreements. Corporate Information The Company was initially incorporated in Idaho under the name “General Mines Corporation” in 1925. We have gone through several namechanges and on October 5, 2007, we reincorporated the Company in the State of Delaware (“Reincorporation”) through a merger of Idaho General Mines, Inc.with and into General Moly, Inc., a Delaware corporation that was a wholly owned subsidiary of Idaho General Mines, Inc. with General Moly being thesurviving entity. In 8Table of Contents connection with the Reincorporation, all of the outstanding securities of Idaho General Mines, Inc. were converted into securities of General Moly on a one-for-one basis. For purposes of the Company’s reporting status with the U.S. Securities and Exchange Commission (“SEC”), General Moly is deemed a successorto Idaho General Mines, Inc. Our common stock is traded on the NYSE Amex under the symbol “GMO” and, in February 2008, the Company began tradingon the Toronto Stock Exchange (“TSX”) under the same symbol. Our registered and principal executive office is located at 1726 Cole Blvd., Suite 115,Lakewood, Colorado 80401 and the phone number for that office is (303) 928-8599. We maintain a website at www.generalmoly.com, on which we will post free of charge our annual reports on Form 10-K, quarterly reports onForm 10-Q, Extensible Business Reporting Language (“XBRL”) documents, and any amendments to these reports under the heading “Investors” as soon asreasonably practicable after we electronically file such material with, or furnish it to, the SEC. We also routinely post important information about theCompany on our website under the heading “Investors.” We do not incorporate the information on our website into this document and you should not considerany information on, or that can be accessed through, our website as part of this document. You may read and copy any materials we file with the SEC at theSecurities and Exchange Commission Public Reference Room at 100 F Street NE Washington, DC 20549. Information regarding the operation of the PublicReading Room may be obtained by calling the SEC at 1.800.SEC.0330. The SEC also maintains a website that contains our reports and other information atwww.sec.gov. Corporate Strategy and Objective Our corporate strategy is to acquire and develop highly profitable advanced stage mineral deposits. Our near-term corporate objective is to profitablydevelop and operate the Mt. Hope Project and to complete our evaluation and commence development of the Liberty Property. In the short-term, we are focusedon receiving permits and financing required to complete the development of the Mt. Hope Project based on our current schedule, while at the same timeconserving our cash resources until such permits are received. We believe we have the following business strengths that will enable us to achieve our objectives: · A strong, proven management team with experience in mine development, project financing, and operations. · The Mt. Hope Project, of which we own 80%, currently in the permitting and development stage, is anticipated to be one of largest andlowest cost primary molybdenum projects in the world, driven, in part, by high ore grades that will be processed early in the mine life. · Our Liberty Property has the potential to become a second, significant, molybdenum operation and is wholly-owned by the Company androyalty-free. · The Mt. Hope Project and the Liberty Property are located in Nevada, which has a long and ongoing history of large-scale, open pit miningoperations. · Both the Mt. Hope Project and the Liberty Property have near-by infrastructure for power, access roads, and water and have anenvironmentally friendly design. · We have strong international support from the steel industry. · We anticipate favorable long-term market fundamentals for molybdenum. Products We do not currently produce any products. When the Mt. Hope Project is developed, we expect production (on a 100% basis) of 40 million pounds ofmolybdenum per year over the first five years on average and approximately 1.1 billion pounds of molybdenum over the expected 44-year life of the project. The Mt. Hope Project will primarily focus on producing Technical Grade Molybdenum Oxide (“TMO”), which is widely utilized by the steel industry. In thefuture, we may also consider producing FerroMolybdenum (“FeMo”), and have designed the Mt. Hope Project plant to accommodate this process, which isalso used by the steel industry and would make the Company a more complete supplier to the steel industry. Molybdenum is a refractory metal with very unique properties. Approximately 70% to 80% of molybdenum applications are in steel making. Molybdenum, when added to plain carbon and low alloy steels, increases strength, 9Table of Contents corrosion resistance and high temperature properties of the alloy. The major applications of molybdenum containing plain and low alloy steels are automotivebody panels, construction steel and oil and gas pipelines. When added to stainless steels, molybdenum imparts specialized corrosion resistance in severecorrosive environments while improving strength. The major applications of stainless steels are in industrial chemical process plants, desalinization plants,nuclear reactor cooling systems and environmental pollution abatement. When added to super alloy steels, such as those used in Jet turbine blades and otheradvance aerospace engine components, molybdenum dramatically improves high temperature strength, thermal expansion and contraction resistance andresistance to oxidation. The effects of molybdenum additions to steels are not readily duplicated by other elements and as such are not significantly impactedby substitution of other materials. Other significant molybdenum applications include lubrication, catalytic sulfur reduction in petrochemicals, lighting, LCD activation screens, x-raygeneration, high temperature heat dissipation and high temperature conductivity. These areas represent the highest technical and value-added applications ofmolybdenum, but are also the most readily replaceable in times of technical or economic downturns. Competitive Conditions Molybdenum exploration, development and production is a competitive business. We anticipate competing with numerous molybdenum suppliersonce the Mt. Hope Project achieves production. The supply of molybdenum comes from both primary molybdenum mines, such as our proposed Mt. Hope Project, and as a byproduct ofporphyry copper production. Each source of supply represents approximately 50% of the molybdenum produced annually, which was forecast to grow to535 million pounds in 2011, according to CPM Group, an industry consultant. Although many companies produce molybdenum, many of which also mineother minerals, approximately two-thirds of global production is concentrated among ten companies. After we commence production at both our Mt. Hope Project and Liberty Property, our competitive position will be based on the quality and grade ofour ore bodies and our ability to manage costs compared with other producers. Our costs are driven by the grade and nature of our ore bodies as well as inputcosts, including energy, labor and equipment. Our ability to have a competitive position over the long-term will be based on, among other things, the large sizeof our combined ore resources and anticipated production rate capacity as well as our intention to hire and retain a skilled workforce, and manage our costs. Employees The Company had a total of 36 employees, including 32 exempt and 4 hourly employees, as of December 31, 2011. Description of the Mt. Hope Project Overview The discussion in this section is based on the entire Project, of which we own an 80% interest. The LLC is proceeding with the permitting anddevelopment of the Mt. Hope Project. The Project will include the development of an open pit mine, construction of a concentrator and a roaster, andconstruction of all related infrastructure to produce TMO, the most widely used molybdenum product. From November 2004 through August 2007 we conducted numerous exploration, drilling and evaluation studies, culminating in the BFS for the Mt.Hope Project. In 2005, we initiated the baseline studies necessary for development of an Environmental Impact Statement (“EIS”). We completed an initialPOO, which the BLM accepted in September 2006. In December 2006, the BLM selected an environmental firm to complete the EIS for the Mt. Hope Project. Since that time, the Company has been working with the environmental firm to complete the EIS. We are currently targeting the effective date of the ROD andthe satisfaction of the other ROD Contribution Conditions to occur between June and September of this year. The public comment period for the DEIScommenced at its publication on December 2, 2011 and ended on March 1, 2012. Circumstances beyond our control, including reviewing agency delays orrequests for additional information or studies, and requests for review or appeals of the BLM decision, could cause the effectiveness of the ROD and/or thesatisfaction of the other ROD Contribution Conditions to be delayed. Once the ROD is effective and financing is in place, we can commence construction. Weestimate that production will begin approximately 20 months following initiation of project construction. 10Table of Contents In addition to working to complete the EIS, we are working to finalize the transfer of water rights to mining use. In March 2009 we were granted ourwater applications in a Ruling by the State Engineer. However, that Ruling was successfully appealed in April 2010 in Nevada District Court (“NDC”),remanding the matter for another hearing by the State Engineer. On July 15, 2011, the State Engineer issued a second Ruling granting the Company’s water right applications. In August 2011, Eureka County andtwo other parties comprised of three individual water rights holders in Diamond Valley and one in Kobeh Valley, filed Petitions and Amended andSupplemental Petitions (“Petitions”) with the NDC appealing the second Ruling of the State Engineer. We continue to anticipate a favorable NDC decision,upholding the State Engineer’s second Ruling. The appeal hearing is set for April 3, 2012 before the NDC. A decision by the NDC is expected in mid-2012,although the NDC is not required to act under any specified timeline. The appeal does not prevent the State Engineer from issuing the permits and as such,the State Engineer completed issuance of all permits on December 14, 2011 and certain amended permits on January 4, 2012 subject to the second Ruling. The water will become available for consumptive use following the State Engineer’s approval of the Company’s Monitoring, Management and Mitigation Plan(“3M Plan”), developed with the input and cooperation of Eureka County. The Company is continuing to work with the State Engineer and Eureka Countyfollowing our prior submissions, to finalize the 3M Plan and we anticipate the State Engineer will approve the 3M Plan prior to commencement of construction,in the second half of 2012. On August 19, 2010, the LLC entered into an agreement with the Eureka Producers’ Cooperative (the “EPC”) whereby the LLC will fund aSustainability Trust (the “Trust”) in exchange for the cooperation of the EPC with respect to the LLC’s water rights and permitting of the Mt. Hope Project. The Trust will be tasked with developing and implementing programs that will serve to enhance the sustainability and well-being of the agricultural economyin the Diamond Valley Hydrographic Basin through reduced water consumption. The Trust may be funded by the LLC over several years based on the achievement of certain milestones. The achievement of these milestones isconsidered to be probable, and as such $4.0 million is accrued in the Company’s December 31, 2011, financial statements and is included in miningproperties, land, and water rights. In addition to the ROD and the water rights, three state-issued permits are viewed as major environmental permits; the Water Pollution Control(“WPC”) Permit, the Air Quality Permit (“AQP”), and the Reclamation Permit. The LLC continues to develop the applications and supporting informationfor these permits. At the request of Eureka County, the Nevada Department of Environmental Protection, Bureau of Air Pollution Control (“NDEP-BAPC”)scheduled a public meeting on the Company’s draft AQP on February 28, 2012 in Eureka, Nevada. These permits are anticipated to be received on or beforethe date that the ROD is received (see “Permitting- Mt. Hope Permitting Requirements” below). The Mt. Hope Project — the LLC The Mt. Hope Project is owned and will be operated by the LLC under the LLC Agreement. The LLC currently has a 30-year renewable lease (“Mt.Hope Lease”) with Mount Hope Mines, Inc. (“MHMI”) for the Mt. Hope Project. Located in Eureka County, Nevada, the Mt. Hope Project consists of 13patented lode claims and one millsite claim, which are owned by MHMI and leased to the LLC, and 1,521 unpatented lode claims, including 109 unpatentedlode claims owned by MHMI and leased to the LLC and 1,412 unpatented lode claims owned by the LLC. Patented claims are owned real property andunpatented claims are held subject to the paramount title of the United States and remain valid for as long as the claim contains a discovery of valuableminerals as defined by law and the holder pays the applicable fees. The Mt. Hope Lease is subject to the payment of certain royalties. See “Business—Description of the Mt. Hope Project—Royalties, Agreementand Encumbrances” below. In addition to the royalty payments, the LLC is obligated to maintain the property and its associated water rights, including thepayment of all property taxes and claim maintenance fees. The LLC must also indemnify MHMI against any and all losses incurred as a result of any breachor failure to satisfy any of the terms of the Mt. Hope Lease or any activities or operations on the Mt. Hope property. The LLC is not permitted to assign or otherwise convey its obligations under the Mt. Hope Lease to a third party without the prior written consent ofMHMI, which consent may be withheld at its sole discretion. If, however, the assignment takes the form of a pledge of our interest in the Mt. Hope Project forthe purpose of obtaining financing, MHMI’s consent may not be unreasonably withheld. The Mt. Hope Lease further requires the LLC to keep the propertyfree and clear of all liens, encumbrances, claims, charges and burdens on production except as allowed for a project financing. The Mt. Hope Lease requires that the terms of any project financing must provide that: (i) any principal amount of debt can only be repaid afterpayment of the periodic payments as set out in the Mt. Hope Lease; (ii) the lenders may not 11Table of Contents prohibit or interfere with any advance royalty payments due to MHMI under the Mt. Hope Lease; and (iii) no cash sweeps or payments of excess cash flowmay be made to the lenders in priority of such advance royalty payments. The Mt. Hope Lease also contains an after acquired property clause, which requires that any property acquired by the LLC within two miles of theboundary of the Mt. Hope Project be conveyed to MHMI if requested within a certain time period following notification of such acquisition. MHMI hasrequested that we maintain ownership of all new claims filed by the LLC, which now includes 1,412 unpatented lode claims. The Mt. Hope Lease is for a term of 30 years, but is extended beyond 30 years if the Mt. Hope Project is in production or intends to resumeproduction (and has provided notice to MHMI accordingly). The lease may be terminated at the election of the LLC, or upon a material breach and failure tocure such breach. If the LLC terminates the lease, the termination is effective 30 days after receipt by MHMI of written notice to terminate the Mt. Hope Lease. If MHMI terminates the lease, termination is effective upon receipt of a notice of termination of a material breach, representation, warranty, covenant or termcontained in the Mt. Hope Lease and followed by failure to cure such breach within 90 days of receipt of a notice of default. MHMI may also elect to terminatethe Mt. Hope Lease if the LLC has not cured the non-payment of obligations under the lease within 10 days of receipt of a notice of default. Property Description and Location The Mt. Hope Project is located on the eastern flank of Mt. Hope approximately 21 miles north of Eureka, Nevada. The Mt. Hope Project is locatedat the southern end of the northwest-trending Battle Mountain-Eureka mineral belt. Mt. Hope is approximately 2.6 miles due west of State Route 278, and theMt. Hope Project centers in sections 1 and 12, T22N-R51E and sections 12 and 13, T22N-R51½E. Royalties, Agreements and Encumbrances Advance Royalty The Mt. Hope Lease is for a period of 30 years from October 19, 2005 and for so long thereafter as operations are being conducted on the property. The lease may be terminated earlier at the election of the LLC, or upon a material breach of the agreement and failure to cure such breach. If the LLCterminates the lease, termination is effective 30 days after receipt by MHMI of written notice to terminate the Mt. Hope Lease and no further payments would bedue to MHMI. In order to maintain the lease, the LLC must pay certain deferral fees and advance royalties as discussed below. 12Table of Contents The Mt. Hope Lease requires a royalty advance (“Construction Royalty Advance”) of 3% of certain construction capital costs, as defined in the Mt.Hope Lease. The LLC is obligated to pay a portion of the Construction Royalty Advance each time capital is raised for the Mt. Hope Project based on 3% ofthe expected capital to be used for those certain construction capital costs defined in the Mt. Hope Lease. Through December 31, 2011, we have paid $13.7million of the total Construction Royalty Advance, including $9.0 million paid on October 19, 2011. Based on our Mt. Hope Project capital budget weestimate that an additional $9.0 million must be paid on or before October 19, 2012, which has been accrued. Once the Construction Royalty Advance has been paid in full, the LLC is obligated to pay an advance royalty (“Annual Advance Royalty”) eachOctober 19 thereafter in the amount of $0.5 million per year. The Construction Royalty Advance and the Annual Advance Royalty are collectively referred toas the “Advance Royalties.” All Advance Royalties are credited against the MHMI production royalties once the mine has achieved commercial production. After the mine begins production, the LLC estimates that the Production Royalties will be in excess of the Annual Advance Royalties for the life of the Mt. HopeProject and, further, that the Construction Royalty Advance will be fully recovered (credited against MHMI production royalties) by the end of the third year ofcommercial production. Production Royalty Following commencement of commercial production, the LLC will be required to pay a production royalty to MHMI and Exxon Corporation(“Exxon”) as follows: (a) MHMI Production Royalty After commencement of commercial production at the Mt. Hope Project, the LLC will be required to pay to MHMI a productionroyalty equal to the greater of: (i) $0.25 per pound of molybdenum metal (or the equivalent of some other product) sold or deemed to be sold from theMt. Hope Project; or (ii) 3.5% of net returns (“Base Percentage”), if the average gross value of products sold is equal or lower than $12.00 per pound,or the Base Percentage plus 1% of net returns if the average gross value of products sold is higher than $12.00 per pound but equal or lower than$15.00 per pound, or the Base Percentage plus 1.5% of net returns if the average gross value of products sold is higher than $15.00 per pound(“MHMI Production Royalties”). As used in this paragraph, the term “products” refers to ores, concentrates, minerals or other material removed andsold (or deemed to be sold) from the Mt. Hope Project; the term “gross value” refers generally to proceeds received by us or our affiliates for theproducts sold (or deemed to be sold); and the term “net returns” refers to the gross value of all products, less certain direct out of pocket costs,charges and expenses actually paid or incurred by us in producing the products. (b) Exxon Production Royalty Exxon will receive a perpetual 1% royalty interest in and to all ores, metals, minerals and metallic substances mineable orrecoverable from the Mt. Hope Project in kind at the mine or may elect to receive cash payment equal to 1% of the total amount of gross paymentsreceived from the purchaser of ores mined/removed/sold from property net of certain deductions. Environmental Regulations and Permits The Mt. Hope Project is subject to numerous state and federal environmental regulations and permits. See “Applicable Mining Laws” and“Permitting” below for a detailed description of these requirements. Accessibility, Climate, Local Resources, Infrastructure and Physiography Access The Mt. Hope Project has year-round access from Nevada State Route 278 (“Route 278”). The land package includes the land between the projectsite and Route 278 making the project accessible from existing roads. Climate Climate in the area is moderate, with average highs in July of about 86 degrees Fahrenheit and lows in January of about 13 degrees Fahrenheit. Precipitation in the area is relatively low with annual precipitation averages of about 12 inches. Operations at the site are planned to continue year-round. 13Table of Contents Local Resources and Infrastructure The town of Eureka, Nevada is approximately 21 miles to the south of the Mt. Hope Project, via Route 278. The infrastructure requirements tosupport the mine and concentrator consist of bringing power and water to the property, commensurate with the operational requirements, including developinga water well field within the Kobeh Valley, constructing site access roads, and constructing maintenance shops for the mine and plant administrative offices. A 230kV power line is expected to be developed from the Machacek substation near the town of Eureka to the mine site. Water Rights and Surface Rights Planned water wells, located approximately 6 miles to the southwest of the planned operating facilities, are anticipated to supply approximately7,000 gallons per minute (“gpm”) to the Mt. Hope Project. Exploration for water is sufficiently advanced to identify the source of water that will be used for allproject water needs, with final fresh water development to occur during the construction of the project. (See “Permitting — Mt. Hope Permitting Requirements— Water Appropriation Permits-Nevada Division of Water Resources” below for a discussion of the current status of our applications for water rights for usein the Mt. Hope Project). Surface rights on the Mt. Hope Project include BLM open range grazing rights and stock water rights. Two power line easements cross within theproperty boundaries. An existing easement for a 345kV transmission line runs north-south on the western edge of the property and the other existing easementis a medium-voltage power line that runs east along the main existing access road that connects to Route 278 to the eastern property boundary. Physiography The Mt. Hope area lies within an area of north-south trending mountains separated by alluvial valleys. The primary mountain ranges in the Mt.Hope area include the Roberts Mountains, Sulphur Spring Range, Diamond Mountains, Simpson Park Range, and the Cortez Mountains. Elevations of themountains range from approximately 6,800 feet for the crests of the Sulphur Spring range to over 10,000 feet for the Roberts Mountains. The major valleys in the Mt. Hope region are Diamond Valley to the east, Pine Valley to the north, and Kobeh Valley to the west. Diamond and PineValleys are elongated in a north-south direction. Kobeh Valley is located to the west and southwest of the Mt. Hope Project. The upper portions of the valleys are similar in nature and are characterized by slightly incised stream channels with no significant associatedfloodplain. The uplands and mountains have slopes ranging from moderate to steep (over 30 percent) with shallow to deep, moderately alkaline to mediumacidic soils. Bedrock is often within 0.5 meters of the surface, particularly on the steep upland slopes. Lake sediments make up the largest areas in the valleys. The slopes range from smooth to rolling (0 to 15 percent), and the soils vary from shallowto deep and mildly to strongly alkaline. The surface textures range from silty clay loams to gravelly sandy loams and local sand. The permeability of thesesoils ranges from slow to rapid. The natural vegetation of the region consists of pinion juniper and sagebrush with grass. The pinion juniper occupies the higher elevations of themountain slopes, with the lower areas in the valley covered predominantly with sagebrush and shrubs with perennial bunchgrasses. Mt. Hope, located in the lower foothills of the southeast flank of the Roberts Mountains, stands approximately 8,400 feet in elevation. Areas to theeast and southeast slope gently to elevations from 6,400 to 7,900 feet. Diamond Valley, situated to the south and east, is approximately 6,000 feet in elevation. History Prior Ownership and Results of Exploration Work Lead-zinc ores were discovered at Mt. Hope in 1870, and small-scale mining was carried out sporadically until the 1970s. Zinc and adjacent coppermineralization were the focus of drilling activities by Phillips Petroleum in the early 1970s and by ASARCO and Gulf (“ASARCO”) in the mid-1970s, whichoutlined further zinc mineralization. The last drill hole of this series encountered significant molybdenum mineralization at depth west of the zinc deposits. The significance of this 14Table of Contents mineralization was first recognized by ASARCO in 1976, but ASARCO did not reach an agreement with MHMI to test this potential. Exxon recognized molybdenum potential at Mt. Hope in 1978 and acquired an option on the property from MHMI. By 1982, Exxon had completed69 holes, which partially defined a major molybdenum deposit underlying the east flank of the Mt. Hope property. Exxon conducted a +/-25% feasibilitystudy of the Mt. Hope project in 1982. A draft EIS was completed on the project and public hearings were held in early 1985. Exxon drilled an additional60 holes on the property between 1983 and 1988 but did not update their deposit block model with data from the post-1982 holes. Cyprus drilled four holeson the property in 1989-90 under an agreement with Exxon but did not pursue the project. We established an agreement with MHMI in 2004 pursuant to which we obtained access to the work completed by previous companies that hadevaluated the property, including drill core and drill data. We used this data as the basis for developing an evaluation of the Mt. Hope deposit. The evaluationprovided the basic engineering, plant design and other aspects of analysis of the Mt. Hope Project and outlined a positive operating process, waste disposal,mine design and plan, preliminary Environmental Assessment (“EA”), permitting plan, operating and capital cost estimates, and the corresponding estimatesof mineralized material. Geology Mt. Hope is located in north-central Nevada on the eastern edge of a mineral belt linking ore deposits of diverse ages. The Battle Mountain-Eurekamineral belt, a northwest-southeast trending corridor about 250 miles long, has localized major deposits of gold, silver, copper, and molybdenum. The Mt. Hope molybdenum ore deposit occurs in an area of about two square miles of elevated igneous rocks. The mineralized complex includes avariety of igneous rocks derived from a common volcanic source. Quartz porphyry, the primary molybdenum host rock, is commonly veined withmolybdenite. Subordinate molybdenum mineralization also occurs in hornfels. The known orebody occurs in two zones of the quartz porphyry stock andhornfels wallrocks. The ore deposit is a molybdenum porphyry, which is classified as a “Climax—type” deposit. This type of deposit has well zoned molybdenummineralization. The molybdenum mineral content, termed grade zoning, surrounds the central area of the deposit and forms geometries that are circular inplan and arch shaped in section. The mineral zones or “shells” consist of quartz porphyry and hornfels cross-cut by quartz stockwork veining containingmolybdenite. Drilling has proven strong ore grades near the surface and indications of deeper ore grade zones. Mineralization The main form of molybdenum mineralization that occurs within the orebody is molybdenite (MoS2 - molybdenum disulfide). Much of the knownmolybdenite is distributed around two lobes and apophyses of the main quartz porphyry stock and within two separate mineralized zones. A concentration ofhigher-grade mineralization, averaging 0.15% molybdenum, is present between the eastern and western mineral zones. Referred to as the Mt. Hope Fault Zone,this area is approximately 1,300 feet in diameter and varies from 325 to 985 feet deep. This zone will be the target of open pit mining in the first 32 years. Lower grade ore will also be mined and stockpiled during the first 32 years and will be processed in the succeeding 12 years. Exploration Since acquiring access to the Mt. Hope Project, we have completed additional exploration drilling for molybdenum for the purposes of supporting ourBFS and obtaining engineering information for items such as geotechnical design, hydrology, and condemnation for waste dumps and tailing ponds as well asinfill drilling for ore calculation purposes. The Mt. Hope property has been extensively drilled and all core and assay results are available to the Company. Accordingly, this data has beenused to analyze and quantify the mineral resource based on an extensive high quality database. The drilling at the Mt. Hope Project has been predominatelyperformed by utilizing diamond core methods, and some reverse circulation (“RC”) in areas of condemnation and water well drilling. To date, 311 holes havebeen drilled into the property for a total of 357,177 feet of drilling; 234,402 feet of which is core, the remaining 122,775 feet is RC. 15Table of Contents Ore to Be Mined The table below summarizes the ore grades we expect to mill under our BFS mine plans for Mt. Hope. Mill Feed Ore Statistics AverageGradeMoCategoryKtonsMo%Recovery %Ore in Years 1-5110,3460.10387.7Ore in Years 1-10220,7370.09487.3Ore in Years 1-20439,1950.08686.2 The modeled pit, including the above mineralized material and waste, contains an estimated 2.7 billion tons of total material. Based on these estimates, fromthe inception of production through year 32, the mill will process 702,953 thousand tons of ore at an average ore grade of 0.078%. During this time periodlow-grade ore totaling 262,973 thousand tons with an average ore grade of 0.042% will be stockpiled for later feed into the mill from years 32 through 44. Waste material totaling 1,741,815 thousand tons will also be mined and disposed of on site. The total production is based on estimated life of mine and has a0.034% Mo cutoff grade. Mining The Mt. Hope Project is planned for production by conventional large-scale, hardrock, open-pit mining methods. The current mine plan provides forprimary loading with a fleet of two electric cable shovels, one hydraulic shovel, and two front-end loaders. The mine fleet is expected to include 24 240-tontrucks by the end of the first full year of production. The Company anticipates engaging a contractor to perform approximately 10 months of pre-productionstripping concurrent with the initial phases of construction of the Mt. Hope Project. Ore will be hauled directly to the crusher at the southeast side of the pit. Waste will be delivered to one of four waste sites located around the mine. One low grade stockpile will be located to the east of the pit. The low-grade material will be re-handled and processed through the plant following the initial32 years of mining. The planned storage of low-grade ores is 263 million tons at a grade of 0.042% Mo. Process Overview The process circuit will include: · Primary Crusher & Coarse Ore Stockpile—The primary crusher (60x89 superior gyratory) will be located adjacent to the pit andcrushed ore will be fed to a 70,000 ton live capacity stockpile. · Semi-Autogenous Grinding (“SAG”) & Ball Mill Circuit—Ore will be reclaimed from the stockpile from up to four feeders and fed byconveyor to the SAG mill. The design will allow for the addition of a pebble crusher. Following the SAG mill, the ore will be ground to80% passing 150 microns in the two ball mills at an average daily processing rate of 60,625 tons. · Flotation Circuit—Following the grinding circuit, the ore will be processed in a conventional flotation plant. The molybdenum ore will betreated through two banks of rougher/scavenger flotation, one stage of first cleaners followed by regrind, and four additional stages ofcleaner flotation. Some molybdenum concentrates with higher levels of included metals will be treated through a concentrate leach facility toproduce the cleaned, final molybdenum concentrate. Metallurgical results have indicated that an estimated mill recovery of approximately85.8% is achievable across grades ranging from 0.04% through 0.1% Mo with final concentrate grades of approximately 54% to 56% Mo. The initial 32 years of higher-grade ores will achieve recoveries of about 87%. · Roaster Circuit—Molybdenum concentrate will be further processed in two multi-hearth roasters to produce technical grade molybdenumtrioxide product. The roasting facility will provide a fully integrated process. 16Table of Contents Tailing Facility The proposed mining and processing operation is expected to produce approximately 22 million tons of tailing (including SO scrubber residue) peryear. Approximately 966 million tons of tailing will be produced under the current mine plan. The Tailing Storage Facility layout provides for theconstruction of one tailing impoundment that will contain the first 30 plus years of operations. A second facility is planned for the remaining years of the minelife. Both tailing impoundments will be constructed with HDPE plastic liners to provide for greater groundwater protection. Bankable Feasibility Study On August 30, 2007, we completed the BFS, which established proven reserves totaling 189,675 thousand tons of ore at an average grade of 0.083%molybdenum and probable reserves totaling 776,251 thousand tons of ore at an average grade of 0.065% molybdenum summarized as follows: Statement of Reserves and Mineralized MaterialUnits = Short Tons Reserves Cutoff GradeProven ReservesProbable ReservesProven+Probable ReservesK$Net/hr%Mo SulfideKtonsMo Grade%KtonsMo Grade%KtonsMo Grade% $3.0000.034%189,6750.083776,2510.065965,9260.068 Additional Mineralized Material Cutoff GradeMeasuredIndicatedMeasured+IndicatedK$Net/hr%MoKtonsMo Grade%KtonsMo Grade%KtonsMo Grade% $0.0010.024%11,0890.02998,5520.030109,6410.030 Footnotes to Statements of Reserves and Mineralized Material The cutoff grades are determined by optimizing the net present value based on process costs combined with throughput estimates of recoverablemolybdenum included in each phase of the mining and milling processes. The derived income, based on assumed molybdenum prices, net ofprocessing costs is calculated on a per ton basis and on a per hour milled basis and is expressed in units of thousands of dollars (“K$Net/hr”). Mineralized material is tabulated at the cutoff grade of 0.024% Mo. Breakeven cutoff covers the cost to mine and process the material. The Molycutoff grades in sulfide form are close approximations to K$Net/hr. The final reserve pit design was based on a molybdenum price of $10/lb molybdenum in the saleable form of moly tri-oxide. As of December 31,2011, the approximate three year backward average price for molybdenum was $14.19/lb, according to Ryan’s Notes, a ferro-alloy industry newsand pricing publication. The spot price for molybdenum on the same date was approximately $13.40/lb, also according to Ryan’s Notes. The pitdesign price is below the 3-year backward average and below current spot prices. The reserve at Mt. Hope is based on a block model that utilized the statistical process of Ordinary Linear Kriging constrained by appropriate rocktype and grade boundaries. Base metal models that utilize these common techniques generally account for mining dilution and recovery so thatadditional factors are not required to be applied to the block model. The metallurgical recovery applied to the determination of reserves was 90% in the flotation mill and 99.2% in the molybdenum roaster. Moredetailed process testing and design work later in the feasibility study resulted in a revised average flotation recovery estimate of 85.8%. Thisrecovery difference is not material because the final open pit design is a practical plan with access roads and mine equipment working room. Thefinal design is consequently a conservative representation of the mathematical economic pit that was guided by the initial estimates. 172Table of Contents Capital Cost Estimates Our current estimate of the initial capital cost estimate is $1,039 million. Additionally, we estimate approximately $115 million in cash financialassurance requirements and pre-paid items, resulting in a total of $1,154 million. Many of these cost estimates are based on 2009 constant dollars and aresubject to cost inflation or deflation. In the past several years, costs associated with capital expenditures have escalated on an industry-wide basis as a resultof major factors beyond our control, including the prices of oil, steel and other commodities. We anticipate updating the capital estimate during the second halfof 2012 in conjunction with the expected restart of the Mt. Hope Project. Furthermore, ongoing replacement and sustaining mine equipment and process plantcapital over the expected 44-year operating life plus the three-year reclamation period is currently estimated to be approximately $642 million. These amountsdo not include financing costs or amounts necessary to fund operating working capital. We expect that these cost estimates will continue to evolve over timebased on changes in the industry-wide cost structure as well as changes in our operating strategies and initiatives for the project. The Mt. Hope Project’scurrent anticipated capital requirements are broken down in the following table: Estimated Capital Costs$ MillionsMining Equipment$134Milling Equipment$176Construction$347Owners Costs, Pre-Stripping$169Taxes, freight, spares$68Engineering, Procurement, and Construction Management$59Contingency$86Total Capital$1,039Financial Assurance and pre-paid items$115Total Capital Requirement$1,154Sustaining Capital (40+ years)$642 Pricing The worldwide molybdenum price fluctuated between $5.33 per pound in 2003 to over $40.00 per pound in 2005 and traded in the mid-$30s perpound prior to October 2008, when prices fell from approximately $33.50 per pound to $7.70 per pound in April 2009 as a result of the global financialcrisis. Subsequent to April 2009, prices slowly rose finishing 2009 at $12.00 per pound and further increasing to finish 2010 at $16.40 per pound. During2011, prices traded in a relatively narrow range between $12.85 and $17.70 per pound, finishing the year at $13.40 per pound, according to Ryan’s Notes. Since the beginning of 2012, prices have traded slightly higher and are currently trading at $14.70 per pound as of late February 2012. In our BFS and for a portion of our financial evaluations, we use molybdenum prices prepared by an independent commodities research company,CPM Group. Their research is a comprehensive look at both the supply and demand side of the molybdenum market. Through their research, they forecastglobal growth rates for molybdenum for both supply and demand. CPM Group continues to forecast prices in excess of current spot prices over the long-term. In August 2011, CPM Group forecast that molybdenum prices would average $20.00 in 2012, $23.55 in 2013; $22.00 in 2014; $13.50 in 2015;$11.15 in 2016; $12.50 in 2017, $13.50 in 2018, $16.15 in 2019 and $17.20 thereafter. Production Production over the life of the project is estimated to be 1.1 billion pounds of saleable molybdenum on a 100% basis. Production over the first fullfive years is estimated at 40 million pounds of molybdenum. Direct operating costs for the Mt. Hope Project over the first full five years of operation areanticipated to average $5.29 per pound, using $80 per barrel oil equivalent energy costs, and CAS per pound over the first full five years of operation,including anticipated royalties calculated at $15 per pound molybdenum, are anticipated to average $6.00 per pound. For each $10 change in per barrel oilcosts, Mt. Hope’s anticipated direct operating cost changes approximately $0.10 per pound. Life of mine CAS are estimated to be approximately $7.94 perpound of molybdenum at $80 per barrel oil, inclusive of anticipated royalty payments calculated at $15 per pound molybdenum. These cost estimates arebased on 2009 constant dollars and are subject to cost inflation or deflation. In the past several years, operating costs in the mining industry have escalated ona world-wide 18Table of Contents basis as a result of major factors beyond our control, including the cost of energy and labor. We anticipate updating these operating cost estimates later thisyear. Reconciliation between CAS, a measure based on accounting principles generally accepted in the United States of America (“GAAP”), and directoperating costs, a non-GAAP measure, is provided in the table below. DescriptionFirst Five YearsLife of MineDirect operating costs$5.29$7.13Royalty payments (1).71.81Total$6.00$7.94 (1) Royalty payments are a function of assumed molybdenum prices realized. Description of the Liberty Property On March 17, 2006, we purchased the Liberty Property, an approximately ten square mile property in Nye County, Nevada, including water rights,mineral and surface rights, buildings and certain equipment from High Desert Winds LLC (“High Desert”). The property includes the former Hallmolybdenum and copper deposit that was mined for molybdenum by open pit methods between 1982 and 1985 by Anaconda and between 1988 and 1991by Cyprus. Equatorial Tonopah, Inc. mined copper from 1999 to 2000 on this property, although their operations were in a separate open pit also located onthe property. Much of the molybdenum deposit was drilled but not developed or mined by these previous owners. At closing, we paid High Desert a cashpayment of $4.5 million for a portion of the property, and in November 2006, made an additional payment of $1.0 million for the remainder of the property. On January 30, 2007, we purchased Equatorial Mining North America, Inc. and its two subsidiaries, which owned a 12% net smelter returnsroyalty on the Liberty Property, from Equatorial Mining Pty. Limited, effectively eliminating all third party royalties on the property. The consideration paidfor the Equatorial acquisition was $4.8 million with an additional deferred payment of $6.0 million due upon commencement of commercial operation of theproperty. In connection with the transaction, we acquired $1.2 million in cash accounts and assumed all environmental liabilities on the reclaimed site. Additionally in 2007, we purchased all outstanding mineral claims associated with this property that were not previously owned by us thus giving theCompany 100% control over all mineral rights within the boundary of the property, as well as claims on BLM property adjacent to the patented grounds. Since purchasing the Liberty Property, we completed two drilling programs that, combined with previous evaluation work performed by formerowners, identified mineralization totaling 541.4 million tons with ore grades averaging 0.067% molybdenum and 0.08% copper. We completed a pre-feasibilitystudy on the Liberty Property in April 2008 that detailed initial capital and operating costs, anticipated mining and milling rates and permitting requirements. On October 3, 2011 the Company released an updated NI 43-101 compliant resource estimate and on November 15, 2011 released a pre-feasibility studydetailing updated resource estimates and project economics. The completed report estimates molybdenum and copper reserves and resources, production,capital and operating cost parameters, along with project economics. The Liberty Property is viewed by the Company as a follow-on project to the Mt. HopeProject that we intend to actively pursue following development of the Mt. Hope Project, and dependent on market conditions. History In 1955, Anaconda leased and optioned the Liberty molybdenum prospect and mine in order to evaluate extensive molybdenum and copperoccurrences. From 1956 through 1966, Anaconda explored or delineated molybdenum mineralization over an approximate one square mile area. Drillingindicated extensive mineralization from the surface to a depth of approximately 2,000 feet. Drilling delineated approximately 200 million tons of mineralizationgrading 0.091 percent molybdenum, which was included in a long term mining plan. Mine construction began in 1979 with production from the Hall Minestarting in 1981. Anaconda ceased operations in 1985 due to low metal prices. Between 1982 and 1991, Anaconda and successor operator CyprusMinerals mined a total of 50 million tons of ore grading 0.11 percent molybdenum. No further molybdenum mining took place after 1991, leaving anestimated 150 million tons of un-mined ore at a grade of 0.09 percent molybdenum. 19Table of Contents A 100 million ton copper ore zone independent of the molybdenum was the subject of a copper leach operation by Equatorial between 1995 and2002. Approximately 10 million tons were mined before operations ceased in 2002. The copper zone is not currently being evaluated. The molybdenum mine open pit remains easily accessible for mining. Various facilities and improvements continue to exist on the property that maybe of future use for molybdenum operations including a power supply, water rights, water and well system, offices, truck and vehicle shops, thickeningtanks, water and fuel tanks, roads and other structures. All of the mobile equipment was removed from the property. Much of the plant area was reclaimedafter the 2002 closure with most of the crushing, conveying, grinding, concentrator equipment and other milling equipment being removed from the property. Our combined purchases of the assets and mineral rights at the Liberty Property included all of the lands required for future operations and all of themineral rights. The initial years for a new molybdenum operation and mine on this property could be entirely on fee lands owned by us. As a result, initialpermitting is anticipated to be through state agencies, including the Nevada Department of Environmental Protection (“NDEP”). There are minor BLMlandholdings in the footprint of planned waste stockpiles and the open pit, and at some future time we will pursue acquisition of these lands or performFederal National Environmental Policy Act (“NEPA”) evaluations to permit use of these lands. Based on this and the project’s previous operations, we expectto have an expedited permitting schedule as compared to other greenfield start-up projects, such as Mt. Hope. Geology The ore body at the Liberty Property is geometrically displayed as a cylinder, roughly coincident with and draped across, the igneous contact of aCretaceous quartz porphyry stock and the metamorphosed volcanic host rock. The cylinder plunges -35° to the southeast. Molybdenite occurs as selvageson stockwork quartz veins and on bedding planes and tensional shears in the country rock with the majority of the molybdenum resource located in theintrusive. Host rocks consist of fine-grained volcaniclastic rocks, formerly identified as schists and quartzites, intruded by Cretaceous coarse-grained quartz-feldspar porphyry. These are overlain by Tertiary volcanic rocks varying from rhyolitic-welded ash-flow tuffs to dacitic and basaltic lava flows. Tertiaryandesite dikes intrude the welded tuffs. The Cretaceous quartz-feldspar porphyry is extensively altered by quartz-muscovite and K-spar flooding. Internal textures are often obscured byoverprinting alteration. The deposit is crosscut and offset by a number of post mineral faults. Major structural trends are north-south and east by northeast-west bysouthwest. Molybdenum mineralization is concentrated in molybdenite, molybdenum di-sulfide, with lesser amounts of molybdenum oxide. Copper isconcentrated in a blanket of chalcocite above the oxidation boundary and in chalcopyrite below the oxide zone. Pyrite is a common constituent of most of theore body. Environmental Investigation - Shoshone County, Idaho The Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (“CERCLA”), imposes strict, joint, andseveral liability on parties associated with releases or threats of releases of hazardous substances. Liable parties include, among others, the current owners andoperators of facilities at which hazardous substances were disposed or released into the environment and past owners and operators of properties who ownedsuch properties at the time of such disposal or release. This liability could include response costs for removing or remediating the release and damages tonatural resources. We are unaware of any reason why our undeveloped properties would currently give rise to any potential CERCLA liability. We cannotpredict the likelihood of future CERCLA liability with respect to our properties, or to surrounding areas that have been affected by historic mining operations. Our mineral property holdings in Shoshone County, Idaho include lands contained in mining districts that have been designated as a “SuperfundSite” pursuant to CERCLA. This “Superfund Site” was established to investigate and remediate primarily the Bunker Hill properties of Smelterville, Idaho, asmall portion of Shoshone County where a large smelter was located. However, because of the extent of environmental impact caused by the historical miningin the mining districts, the Superfund Site covers the majority of Shoshone County including our Chicago-London and Little Pine Creek properties as well asmany small towns located in Northern Idaho. We have conducted a property environmental investigation of these properties, which revealed no evidence ofmaterial adverse environmental effects at either property. We are unaware of any 20Table of Contents pending action or proceeding relating to any regulatory matters that would affect our financial position due to these inactive mining claims in ShoshoneCounty. Applicable Mining Laws Mining in the State of Nevada is subject to federal and state law. Three types of laws are of particular importance to the Mt. Hope Project: thoseaffecting land ownership and mining rights; those regulating mining operations; and those relating to the environment. The Mt. Hope Project is situated on lands owned by the United States (“federal lands”). The LLC, as the owner or holder of the unpatented miningclaims, has the right to conduct mining operations on the lands subject to the required operating permits and approvals, compliance with the terms andconditions of the Mt. Hope Lease, and compliance with applicable federal, state, and local laws, regulations and ordinances. On federal lands, mining rightsare governed by the General Mining Law of 1872, as amended, 30 U.S.C. UU 21-161 (various sections), which allows for the location of mining claims oncertain federal lands upon the discovery of a valuable mineral deposit and on proper compliance with claim location requirements. The operation of mines is governed by both federal and state regulatory programs. The predominant non-environmental federal regulatory programaffecting operation of the Mt. Hope Project is the mine safety regulations administered by the Mine Safety and Health Administration. Additional federal laws,such as those governing the purchase, transport, storage or usage of explosives, and those governing communications systems, labor and taxes also apply. State non-environmental regulatory programs affecting operations include the permitting programs for drinking water systems, sewage and septic systems,water rights appropriations, Department of Transportation, and dam safety (engineering design and monitoring). Environmental regulations require various permits or approvals before any mining operations on the Mt. Hope Project can begin. Federalenvironmental regulations are administered primarily by the BLM. The Environmental Protection Agency (“EPA”) has delegated authority for the Clean WaterAct and Clean Air Act to the State of Nevada. The NDEP, therefore, has primacy for these programs and is responsible for administering the associatedpermits for the Mt. Hope Project. The Bureau of Mining Regulations and Reclamation (“BMRR”) within NDEP administers the WPC and Reclamationpermits. The Bureau of Air Pollution Control (“BAPC”) within NDEP administers the Air Quality Permit. The NDEP also administers the permit programfor onsite landfills. The Nevada Division of Wildlife administers the artificial industrial pond permit program. Local laws and ordinances may also apply tosuch activities as waste disposal, road use and noise levels. Both our Mt. Hope and Liberty properties will be subject to these various environmental laws andregulations. Permitting Permit Acquisition and Fundamental Environmental Permitting Considerations We are working to obtain the required principal environmental operating permits for the Mt. Hope Project in anticipation of a possible constructionstart upon receipt of the permits and availability of financing for the project. Baseline studies and data acquisition to support permitting were initiated in thefourth quarter of 2005. Facility designs and operational plans have been refined as data was collected and reviewed to minimize environmental impacts andfacilitate the permitting process. The planned mining and processing operations are consistent with numerous other permitted projects in Nevada, in terms ofmethods, facility design, equipment, and related engineering plans. Permitting Process Overview The development, operation, closure and reclamation of mining projects in the United States require numerous notifications, permits, authorizations,and public agency decisions. This section does not attempt to exhaustively identify all of the permits and authorizations that need to be granted, but insteadfocuses on those that are considered to be critical for project start-up. Environmental Inventories There are certain environmental evaluations that routinely must be completed in order to provide the information against which project impacts aremeasured. Both the BLM and the NDEP have requirements to profile existing conditions and to evaluate what effects will result from implementing the Mt.Hope Project. 21Table of Contents Background information on geology, air quality, soils, biology, water resources, wildlife, vegetation, noise, visual resources, social and economicconditions, and cultural resources have been assembled and have been submitted to the appropriate regulatory agencies. Mt. Hope Permitting Requirements The Mt. Hope Project will require both federal and state permits before it can commence construction and operations. Major permits required for theMt. Hope Project include the ROD, a BLM issued permit, water appropriation permits from the Nevada Division of Water Resources, the WPC permit andreclamation permit from the NDEP—BMRR, and an AQP from the NDEP—BAPC. NDEP—BAPC held a public meeting on the Company’s draft AQP onFebruary 28, 2012 in Eureka, Nevada. Applications for other time-critical state permits have been submitted for agency review and approval. The LLCcontinues to develop and evolve the information supporting these permits based on agency review and feedback. We believe these other major operating permitswill be received on or prior to the effective date of the ROD. Although we currently are targeting the effectiveness of the ROD and the receipt of all major operating permits to occur between June andSeptember 2012, circumstances beyond our control, including reviewing agency delays or requests for additional information or studies, and appeals of theBLM decision, could cause the effective date of the ROD to be delayed. The occurrence of any or a combination of these adverse circumstances may increasethe estimated costs of development, require us to obtain additional interim financing, and/or delay our ability to obtain project financing or other significantfinancing. A delay in the ROD or the receipt of major operating permits also affects the satisfaction of the ROD Contribution Conditions as well as theconditions to Tranche 2 of Hanlong’s investment in our common stock. Plan of Operations Approval—Bureau of Land Management The BLM is preparing an EIS analyzing the environmental impacts of the Mt. Hope Project and alternatives in accordance with the NEPA. Uponcompletion and approval of the EIS, the BLM will issue the ROD for the Mt. Hope Project. The ROD will be effective on the date the BLM has recorded itsdecision to approve the EIS and POO for the Mt. Hope Project. We currently expect to receive the ROD between June and September 2012. In September 2006,the BLM determined that the POO met the regulatory requirements with respect to completeness and comprehensiveness. Since that time, baseline technicalreports have been submitted and approved by the BLM and POO updates have been submitted to accommodate additional detail based on progression ofproject design. The BLM has also been working with its environmental firm to complete the EIS. The DEIS was published in the Federal Register onDecember 2, 2011. The public comment period for the DEIS commenced at its publication on December 2, 2011 and ended on March 1, 2012. Potential environmental issues associated with the proposed operations have been identified and mitigation measures have been developed to minimizepotential impacts. These actions are anticipated to support permitting efforts and to reduce potential environmental liability, and promote good community andsocial responsibility. Issues of concern are primarily related to geochemistry and the associated potential for acid generation from waste rock, the water quality in the post-mining pit lake, and the potential mobilization of constituents in the tailings. Other significant potential impacts include effects of groundwater pumping onexisting water rights and/or surface water flows, air emissions, reduction of wildlife habitat, including a federally listed sensitive species, and thesocioeconomic impact to the community of Eureka. Extensive laboratory testing has been conducted to fully evaluate the geochemistry of all material typesthat will be mined. The waste rock disposal facilities and tailing impoundment designs incorporate components to minimize potential impacts, consistent withaccepted and demonstrated industry practices. Hydrological and geochemical computer modeling predicts that the post-mining pit lake water quality will notpose a threat to wildlife and will therefore not require treatment. Air emissions will be reduced by using control technology and leading industry practices. Adetailed reclamation plan has been developed to re-establish post-mining land uses, including wildlife habitat. Other resource-specific mitigation plans havebeen developed, including those for wild horses and burros, cultural resources, the Pony Express Trail, sage grouse habitat, water resources, bats, andminimizing fugitive dust. Environmental regulations related to reclamation require that the cost for a third party contractor to perform reclamation activities onthe mine site be estimated. This reclamation cost estimate, once approved by BLM and the NDEP will become the basis for the required financial assuranceamount. The LLC will be required to post a financial instrument in addition to the $0.8 million currently held by the BLM upon receiving the ROD to providea guarantee that this amount will be available to BLM and NDEP for use in conducting reclamation should we become insolvent or default on our reclamationobligations. Although the Reclamation Permit is administered by the NDEP-BMRR, BLM review is required and the reclamation cost estimate must beapproved in conjunction with approval of the POO. To accommodate this process, the reclamation permit application and reclamation cost estimate isincluded as part of the POO submittal. 22Table of Contents A phased reclamation cost estimate will address the anticipated activities for a three-year period from the point of POO approval. The financialassurance estimate must then be recalculated every three years to include the current activities and those activities anticipated to be completed during thesubsequent three-year period. Preliminary estimates indicate that the project reclamation financial assurance requirements during the first three-year period willbe approximately $71.9 million, and could be met with financial instruments other than cash. Financial guarantees held by the BLM will increase with everythree-year update in conjunction with the growth of the waste rock pile and the tailing impoundments. It is estimated that financial assurance requirementscould reach $171.8 million at the anticipated end of the project (year 44), assuming no concurrent reclamation activities occur. Water Appropriation Permits—Nevada Division of Water Resources The Mt. Hope Project is primarily centered between two water basins: the Kobeh Valley Basin and the Diamond Valley Basin. Operation of the Mt.hope Project is expected to require 7,000 gallons per minute of fresh water that will be sourced from wells located in Kobeh Valley, west of the Mt. HopeProject. The Company has purchased from existing water rights holders essentially all available water rights in the Kobeh Valley Basin, totaling more than16,000 acre feet annually. In addition to working to complete the EIS, we are working to finalize the transfer of water rights to mining use. In March 2009 we were granted ourwater applications in a Ruling by the State Engineer. However, that Ruling was successfully appealed in April 2010 in the NDC, remanding the matter foranother hearing by the State Engineer. On July 15, 2011, the State Engineer issued a second Ruling granting the Company’s water right applications. In August 2011, Eureka County andtwo other parties comprised of three individual water rights holders in Diamond Valley and one in Kobeh Valley, filed Petitions and Amended andSupplemental Petitions (“Petitions”) with the NDC appealing the second Ruling of the State Engineer. We continue to anticipate a favorable NDC decision,upholding the State Engineer’s second Ruling. The appeal hearing is set for April 3, 2012 before the NDC. A decision by the NDC is expected in mid-2012,although the NDC is not required to act under any specified timeline. The appeal does not prevent the State Engineer from issuing the permits and as such,the State Engineer completed issuance of all permits on December 14, 2011 and certain amended permits on January 4, 2012 subject to the second Ruling. The water will become available for consumptive use following the State Engineer’s approval of the Company’s Monitoring, Management and Mitigation Plan(“3M Plan”), developed with the input and cooperation of Eureka County. The Company is continuing to work with the State Engineer and Eureka Countyfollowing our prior submissions, to finalize the 3M Plan and we anticipate the State Engineer will approve the 3M Plan prior to commencement of construction,in the second half of 2012. Water Pollution Control Permit—Nevada Division of Environmental Protection—Bureau of Mining Regulation and Reclamation The BMRR administers the programs for the WPC Permit and the Reclamation Permit, both of which are required for the Mt. Hope Project. TheWPC Permit program specifies design criteria for containment of process fluids and mandates development of monitoring, operational, and closure plans. Webelieve that the standards for facility design are well-defined and we do not anticipate that the WPC permitting process will be delayed by technical issues. Inaddition, the permit review process is well-defined, including timelines, and is codified in regulation. The permit application was originally submitted in thethird quarter of 2008. We anticipate receiving the WPC Permit close to the BLM’s issuance of the ROD. Air Quality Permit—Nevada Division of Environmental Protection—Bureau of Air Quality Prior to the commencement of construction activities and in conjunction with facility operations, an AQP will be necessary. The Nevada BAPCregulations categorize permit types as Class 1 or Class 2, based on the estimated emissions amounts. The Mt. Hope Project is subject to a Class 2 permit(smaller emissions) based on emissions estimates. The permit application included an emissions inventory and dispersion modeling to demonstrate thatemissions from the project will not exceed established air quality standards. Emissions are primarily associated with the crush/grind circuit (particulatematter) and the roaster (sulfur oxides). Roaster emissions will be controlled with a 99.7% estimated removal efficiency for sulfur oxides. The permitapplication was originally submitted in the third quarter of 2008 and has been subsequently revised to address BAPC comments. NDEP has issued a draftpermit for the project and made the draft permit available for public review and comment. At the request of Eureka County, NDEP scheduled a hearing inEureka on February 28, 2012. We anticipate receiving the permit close to the BLM’s issuance of the ROD. 23Table of Contents Liberty Property Permitting Requirements We anticipate that the permitting schedule for the Liberty Property could be shorter than for the Mt. Hope Project, due to a relatively shorter permittingprocess under Nevada State regulations as opposed to the Federal NEPA process. We control over 14,000 acres, including 5,054 acres of fee land, 946 acresof patented lode claims, 63 acres of patented mill site claims and 7,984 acres of unpatented lode claims. Our ownership of the assets and mineral rights at theLiberty Property include most of the lands required for future operations and all of the mineral rights. Thus, we are evaluating the option of initiating a newmolybdenum mine and ore processing operation completely on lands owned by us. Based on the pre-feasibility study completed in November 2011, the initialthree years for a new molybdenum operation and mine on this property will be completely on fee owned by us. As a result, construction and initial productioncould occur simultaneously with federal permitting efforts. State permits, including the water pollution control, reclamation and air quality permitscomparable to those described in previous sections, would be required for the Liberty Property site and the level of analysis and time required is anticipated tobe consistent with those described for the Mt. Hope Project. In addition to land ownership, two other factors distinguish the Liberty property from Mt. Hope with respect to environmental permitting. First,water consumption is not as significant an issue at Liberty. Unlike Mt. Hope, the areas surrounding Liberty are not extensively irrigated. In addition, we ownsignificant water rights at the Liberty site and have water wells in place. Second, the area has been mined previously which has resulted in significant surfacedisturbance. By conducting exploration drilling on pre-existing disturbance to the extent possible, the amount of disturbance created by exploration drilling isgreatly reduced, and permitting requirements to support exploration are reduced. Furthermore, there is extensive environmental information developed tosupport permitting of the previous mine operation. We anticipate that this information can be used to streamline the permitting process for us by reducing theamount of baseline studies and other technical information that must be developed. Other United States Regulatory Matters The Resource Conservation and Recovery Act (“RCRA”) and related state laws regulate generation, transportation, treatment, storage, or disposal ofhazardous or solid wastes associated with certain mining-related activities. RCRA also includes corrective action provisions and enforcement mechanisms,including inspections and fines for non-compliance. Mining operations may produce air emissions, including dust and other air pollutants, from stationary equipment, such as crushers and storagefacilities, and from mobile sources such as trucks and heavy construction equipment. All of these sources are subject to review, monitoring, permitting,and/or control requirements under the federal Clean Air Act and related state air quality laws. Air quality permitting rules may impose limitations on ourproduction levels or create additional capital expenditures in order to comply with the permitting conditions. Under the federal Clean Water Act and delegated state water-quality programs, point-source discharges into “Waters of the State” are regulated by theNational Pollution Discharge Elimination System program, while Section 404 of the Clean Water Act regulates the discharge of dredge and fill material into“Waters of the United States,” including wetlands. Stormwater discharges also are regulated and permitted under that statute. All of those programs mayimpose permitting and other requirements on our operations. NEPA requires an assessment of the environmental impacts of “major” federal actions. The “federal action” requirement can be satisfied if theproject involves federal land or if the federal government provides financing or permitting approvals. NEPA does not establish any substantive standards; itmerely requires the analysis of any potential impact. The scope of the assessment process depends on the size of the project. An EA may be adequate forsmaller projects. An EIS, which is much more detailed and broader in scope than an EA, is required for larger projects. NEPA compliance requirements forany of our proposed projects could result in additional costs or delays. The Endangered Species Act (“ESA”) is administered by the U.S. Department of Interior’s U.S. Fish and Wildlife Service (“USFWS”). Thepurpose of the ESA is to conserve and recover listed endangered and threatened species and their habitat. Under the ESA, “endangered” means that a speciesis in danger of extinction throughout all or a significant portion of its range. “Threatened” means that a species is likely to become endangered within theforeseeable future. Under the ESA, it is unlawful to “take” a listed species, which can include harassing or harming members of such species or significantlymodifying their habitat. We conduct wildlife and plant inventories required by regulatory agencies prior to initiating exploration or mining project permitting. We currently are unaware of any endangered species issues at any of our projects. A threatened species occurs in limited segments of two creeks approximately10 miles to the north of the proposed well field for the Mt. Hope Project. Although hydrologic modeling predicts no impacts to these stream segments, 24Table of Contents consultation with the USFWS was required. Future identification of endangered species or habitat in our project areas may delay or adversely affect ouroperations. We are committed to fulfilling or exceeding our requirements under applicable environmental laws and regulations. These laws and regulations arecontinually changing and, as a general matter, are becoming more restrictive. Our policy is to conduct our business in a manner that strives to safeguardpublic health and mitigates the environmental effects of our business activities. To comply with these laws and regulations, we have made, and in the futuremay be required to make, capital and operating expenditures. ITEM 1A. RISK FACTORS You should carefully consider the risks described below and elsewhere in this report, which could materially and adversely affect our business,results of operations or financial condition. If any of the following risks actually occurs, the market price of our common stock would likely decline. Therisks and uncertainties we have described below, however, are not the only ones we face. Additional risks and uncertainties not presently known to us or thatwe currently deem immaterial may also affect our operations. Our investors may lose their entire investment in our securities An investment in our securities is speculative and the price of our securities has been and will likely continue to be volatile. Only investors who areexperienced in high risk investments and who can afford to lose their entire investment should consider an investment in our securities. Our profitability depends largely on the success of the Mt. Hope Project, the failure of which would have a material adverse effect on ourfinancial condition We are focused primarily on the development of the Mt. Hope Project. Accordingly, our profitability depends largely upon the successfuldevelopment and operation of this project. We are currently incurring losses and we expect to continue to incur losses until sometime after molybdenumproduction begins at the Mt. Hope Project. The LLC may never achieve production at the Mt. Hope Project and may never be profitable even if production isachieved. The failure to successfully develop the Mt. Hope Project would have a material adverse effect on our financial condition, results of operations andcash flows. Even if the LLC is successful in achieving production, an interruption in operations at the Mt. Hope Project that prevents the LLC from extractingore from the Mt. Hope Project for any reason would have a material adverse impact on our business. If certain conditions are not met under the Hanlong transaction documents, our ability to begin construction of the Mt. Hope Project could bedelayed further The additional investments by Hanlong in our common stock and the related financing with a Chinese bank and the molybdenum supply agreementare subject to a number of conditions precedent, including receipt by us of required governmental permits, approval by Chinese government authorities forinvestment in us by Hanlong and loans expected to be made by a Chinese bank, and negotiation of acceptable loan terms with that bank. These conditionsmay not be met, in which case our ability to begin construction of the Mt. Hope Project could be delayed further while we attempt to obtain alternativefinancing. We may not be successful in obtaining acceptable financing since the current credit markets are difficult for development stage companies. Inaddition, we may be subject to financial penalties under the Hanlong transaction if certain milestones are not met in accordance with the agreement asdiscussed in “The Securities Purchase Agreement — Break Fees” above. We may require and may not be able to obtain substantial additional financing in order to fund the operations of the Company and the LLCand if we are successful in raising additional capital, it may have dilutive and other adverse effects on our stockholders If the actual costs to complete the development of the Mt. Hope Project are significantly higher than we expect, we may not have enough funds to coverthese costs and we may not be able to obtain other sources of financing. The failure to obtain all necessary financing would prevent the LLC from achievingproduction at the Mt. Hope Project and impede our ability to become profitable. Our financing plan assumes that POS-Minerals will make their requiredcontributions as outlined in the LLC Agreement. We may not be able to obtain additional financing necessary for achieving production at the Mt. Hope Projectif these contributions are not made. 25Table of Contents We continue to review the technical merits of the Liberty Property, which will also require significant additional capital to permit and/or commencemining activities at this property. We may not be able to obtain the financing necessary to develop the Liberty Property should we decide to do so. If additional financing is not available, or available only on terms that are not acceptable to us, we may be unable to fund the development andexpansion of our business, attract and retain qualified personnel, take advantage of business opportunities or respond to competitive pressures. Any of theseevents may harm our business. Also, if we raise funds by issuing additional shares of our common stock, preferred stock, debt securities convertible intopreferred or common stock, or a sale of additional minority interests in our assets, our existing stockholders will experience dilution, which may besignificant, to their ownership interest in us or our assets. If we raise funds by issuing shares of a different class of stock other than our common stock or byissuing debt, the holders of such different classes of stock or debt securities may have rights senior to the rights of the holders of our common stock. Our inability to satisfy certain conditions under the LLC Agreement required to be satisfied by December 31, 2011 may require the LLC to paya penalty to our LLC partner, POS-Minerals Commercial production at the Mt. Hope Project did not occur by December 31, 2011. If POS-Minerals has made its additional $56.0 millioncontribution within 15 days after the ROD Contribution Date, the LLC Agreement with POS-Minerals requires the LLC to make a distribution to POS-Minerals of up to $36.0 million, 20 days after the commencement of commercial production, as defined by the LLC Agreement, as a penalty (“Penalty”) forthe delay in commencement of production, with no corresponding reduction in POS-Minerals’ ownership interest in the LLC. The LLC may not be able to satisfy the ROD Contribution Conditions at all. The satisfaction of the ROD Contribution Conditions are subject to anumber of factors that are beyond our control, including the issuance of the ROD by the BLM and the ability of third parties to initiate administrative orjudicial appeals after the issuance of the ROD. In addition, the Mt. Hope Project did not achieve commercial production by December 31, 2011, and may notachieve commercial production at all. As a result, we expect that we will be required to pay the Penalty if POS-Minerals makes its additional $56.0 millioncontribution. Because POS-Minerals has elected to retain its 20% interest in the LLC and we anticipate being required to make the Penalty payment to POS-Minerals, we may not be able to provide sufficient funding to the LLC to develop the Mt. Hope Project, which could have a material adverse effect on ourfinancial condition, results of operations and cash flows. In addition, in such cases we may be required to seek additional capital, which may not beavailable to us on commercially reasonable terms, if at all. Any such additional financing could dilute or otherwise adversely impact the rights of our existingstockholders. The LLC Agreement gives POS-Minerals the right to approve certain major decisions regarding the Mt. Hope Project The LLC Agreement requires unanimous approval of the members for certain major decisions regarding the Mt. Hope Project. This effectivelyprovides either member with a veto right over the specified decisions. These decisions include: · Approval of the operations to be conducted and objectives to be accomplished by the Mt. Hope Project (“Program and Budget”); · Approval of the budget for costs to be incurred by the LLC and the schedule of cash capital contributions to be made to the LLC (“Budget”); · Approval of cost overruns in excess of 15% of the approved Program and Budget; · Approval of an expansion or contraction of the average tons per day(“ tpd”) planned of 20% or more from the relevant tpd throughput schedulein the BFS; · Approval of the LLC’s acquisition or disposition of significant real property, water rights or real estate assets; · Approval of the incurrence of indebtedness by the LLC that requires (1) an asset of the LLC to be pledged as security, (2) the pledge of amembership interest in the LLC, or (3) a guaranty by either the Company or POS- 26Table of Contents Minerals, other than in each instance a purchase money security interest or other security interest in the LLC to finance the acquisition or leaseof equipment; and · Approval of the issuance by the LLC of an ownership interest to any person other than Nevada Moly or POS-Minerals. The requirement that certain decisions be approved by POS-Minerals may make it more difficult for our stockholders to benefit from certaindecisions or transactions that we would otherwise cause the LLC to make if they are opposed by POS-Minerals. Fluctuations in the market price of molybdenum could adversely affect the value of our company and our securities The profitability of our mining operations will be influenced by the market price of the metals we mine. The market prices of metals such asmolybdenum fluctuate widely and are affected by numerous factors including those beyond the control of any mining company. These factors includefluctuations with respect to the rate of inflation, the exchange rates of the U.S. dollar and other currencies, interest rates, global or regional political andeconomic conditions and banking crises, global and regional demand, production costs in major molybdenum producing areas, and a number of otherfactors. Sustained periods of low molybdenum prices would adversely impact our revenues, profits, and cash flows. In particular, a sustained lowmolybdenum price could: · Cause a continued delay and suspension of our development activities and, ultimately, mining operations at our Mt. Hope Project, if suchoperations become uneconomic at the then-prevailing molybdenum price; · Prevent us from fulfilling our obligations under our agreements or under our permits and licenses which could cause us to lose our interests in,or be forced to sell our properties; and · Have a continued negative impact on the availability of financing to us. Furthermore, the need to reassess the feasibility of any of our projects if molybdenum prices were to significantly decline could cause substantialdelays. Mineral reserve calculations and life-of-mine plans using lower molybdenum prices could result in reduced estimates of mineral reserves and inmaterial write-downs of our investment in mining properties and increased amortization, reclamation and closure charges. The volatility in metals prices is illustrated by the quarterly average price range from January 2002 through February 2012 for molybdenum: $2.73- $35.37 per pound. Average molybdenum prices are quoted in Platt’s Metals Week. After a period of high, sustained molybdenum prices in 2004 throughSeptember 2008, where the price of molybdenum averaged $27.34 per pound, the price of molybdenum fell to approximately $7.70 per pound in April 2009. Although we estimate the Mt. Hope Project’s average cost of production over the first five years to be approximately $6.00 per pound, a sustained period oflower molybdenum prices would have material negative impacts on the Company’s profitability. Our profitability is subject to demand for molybdenum, and any decrease in that demand, or increase in the world’s supply, could adverselyaffect our results of operations Molybdenum is used primarily in the steel industry. The demand for molybdenum from the steel industry and other industries was extremely robustthrough the third quarter of 2008, primarily fueled by growth in Asia and other developing countries. Beginning in the fourth quarter of 2008, the globalfinancial crisis forced steel companies to substantially reduce their production levels with a corresponding reduction in the consumption of molybdenum,which contributed to the decline in the price of molybdenum. Demand growth in 2011 has promoted a gradual increase in the price of molybdenum. However, sustained low molybdenum demand resulting from a prolonged global financial crisis may cause prolonged periods of low molybdenum pricesultimately resulting in a continued suspension of our development or, in the future, a suspension of our mining operations at our Mt. Hope Project. A sustained significant increase in molybdenum supply could also adversely affect our results. The CPM Group estimate that during the next fiveyears a total of 201.3 million annual pounds of production could be added to the supply of molybdenum (including 40 million of supply from our Mt. HopeProject). In the event demand for molybdenum does not increase to consume the potential additional production, the price for molybdenum may be adverselyaffected. 27Table of Contents We are exposed to counter party risk, which may adversely affect our results of operations The off-take agreements the Company has completed including contracts with APERAM, SeAH Besteel, Sojitz, and Hanlong contain provisionsallowing for the sale of molybdenum at certain floor prices, or higher, over the life of the five year agreements. During the past 18 months there have beenperiods where the spot molybdenum prices fell below the inflation-adjusted floor prices in the contracts. During these time periods all four contracts wouldhave provided for the Company to sell molybdenum at above-spot prices. In the event that our contract parties choose not to honor their contractualobligations, our profitability may be adversely impacted. We may not be able to obtain or renew licenses, rights and permits required to develop or operate our mines, or we may encounter environmentalconditions or requirements that would adversely affect our business In the ordinary course of business, mining companies are required to seek governmental permits for expansion of existing operations or for thecommencement of new operations. The LLC will be required to obtain a ROD from the BLM authorizing implementation of the Mt. Hope Project POO. Thisapproval can be obtained only after successful completion of the process of environmental evaluation, which incorporates substantial public comment. TheLLC will also need to obtain various state and federal permits including water protection, air quality, water rights and reclamation permits. In addition torequiring permits for the development of the Mt. Hope Project, we will need to obtain and modify various mining and environmental permits during the life ofthe project. Obtaining, modifying, and renewing the necessary governmental permits is a complex and time-consuming process involving numerousjurisdictions and often involving public hearings and substantial expenditures. The duration and success of our efforts to obtain, modify or renew permitswill be contingent upon many variables, some of which are not within our control. Increased costs or delays could occur, depending on the nature of theactivity to be permitted and the interpretation of applicable requirements implemented by the permitting authority. All necessary permits may not be obtainedand, if obtained, may not be renewed, or the costs involved in each case may exceed those that we previously estimated. It is possible that the costs and delaysassociated with compliance with such standards and regulations could become such that we would not proceed with the development or operation of the Mt.Hope Project. The development of the Mt. Hope Project may be delayed, which could result in increased costs or an inability to complete its development The LLC may experience delays in developing the Mt. Hope Project. These could increase its development costs, affect its economic viability, orprevent us from completing its development. The timing of development of the Mt. Hope Project depends on many factors, some of which are beyond our andthe LLC’s control, including: · Timely issuance of permits and licenses; · Timely availability of equipment; · Continued appeal or unfavorable order concerning the water rights ruling, 3M plan, or permits; · Sustained low prices for molybdenum; · Acquisition of surface land and easement rights required to develop and operate the project; · Completion of advanced engineering; · Timely execution of the remaining portions of the Hanlong transaction; · Timely availability of the Term Loan; and · Construction of the project. In addition, factors such as sustained low prices of molybdenum and volatility in foreign exchange or interest rates, as well as international politicalunrest, could adversely affect our ability to obtain adequate financing to fund the development of the project on a timely basis. Any delays caused by ourinability to raise capital when needed may lead to the cancellation or extension of, or defaults under, agreements with equipment manufacturers or a need to sellequipment already purchased, any of which may adversely impact the Mt. Hope Project timeline. Additionally, delays to the Mt. Hope Project 28Table of Contents schedule have consequences with regard to our LLC agreement with POS-Minerals, including potential claims by POS-Minerals, which may serve to increaseour capital obligations and further enhance this risk factor. Our mineralization and reserve estimates are uncertain, and any material inaccuracies in those estimates could adversely affect the value of ourmineral reserves There are numerous uncertainties inherent in estimating mineralization and reserves, including many factors beyond our control. The estimation ofmineralization and reserves is a subjective process and the accuracy of any such estimates is a function of the quality of available data and of engineering andgeological interpretation and judgment. Results of drilling, metallurgical testing, production, and the evaluation of mine plans subsequent to the date of anyestimate may justify revision of such estimates. The volume and grade of mineralization and reserves recovered and rates of production may be less thananticipated. Assumptions about prices are subject to greater uncertainty and metals prices have fluctuated widely in the past. Further declines in the marketprice of molybdenum and copper may render mineralization and reserves containing relatively lower grades of ore uneconomic to exploit, which may materiallyand adversely impact our reserve and mineralization estimates at our projects. Changes in operating and capital costs and other factors including, but notlimited to, short-term operating factors such as the need for sequential development of ore bodies and the processing of new or different ore grades, may alsomaterially and adversely affect mineralization and reserves. Any material inaccuracies in our production estimates could adversely affect our results of operations We have prepared estimates of future molybdenum production. We or the LLC may never achieve these production estimates or any production atall. Our production estimates depend on, among other things: · The accuracy of our mineralization and reserves estimates; · The accuracy of assumptions regarding ore grades and recovery rates; · Ground conditions and physical characteristics of the mineralization, such as hardness and the presence or absence of particular metallurgicalcharacteristics; · The accuracy of estimated rates and costs of mining and processing; and · The ability to obtain all permits and construct a processing facility at Mt. Hope. Our actual production may vary from our estimates if any of our assumptions prove to be incorrect. With respect to the Mt. Hope Project, we do nothave the benefit of actual mining and production experience in verifying our estimates, which increases the likelihood that actual production results will varyfrom the estimates. Mining is inherently dangerous and subject to conditions or events beyond our control, and any operating hazards could have a material adverseeffect on our business Mining at the Mt. Hope Project will involve the potential for various types of risks and hazards, including: environmental hazards, industrialaccidents, metallurgical and other processing problems, unusual or unexpected rock formations, structure cave-in or slides, flooding, fires, and interruptiondue to inclement or hazardous weather conditions. These risks could result in damage to, or destruction of, mineral properties, production facilities or other properties, personal injury or death,environmental damage, delays in mining, increased production costs, monetary losses, and possible legal liability. We may not be able to obtain insurance tocover these risks at economically feasible premiums and some types of insurance may be unavailable or too expensive to maintain. We may suffer a materialadverse effect on our business and the value of our securities may decline if we incur losses related to any significant events that are not covered by ourinsurance policies. Our operations make us susceptible to environmental liabilities that could have a material adverse effect on us Mining is subject to potential risks and liabilities associated with the potential pollution of the environment and the necessary disposal of miningwaste products occurring as a result of mineral exploration and production. Insurance against environmental risk (including potential liability for pollution orother hazards as a result of the disposal of waste products occurring from exploration and production) is not generally available to us or the LLC (or to othercompanies in the minerals 29Table of Contents industry) at a reasonable price. To the extent that we become subject to environmental liabilities, the satisfaction of any such liabilities would reduce fundsotherwise available to us and could have a material adverse effect on us. Laws and regulations intended to ensure the protection of the environment areconstantly changing, and are generally becoming more restrictive. Legal title to the properties in which we have an interest may be challenged, which could result in the loss of our rights in those properties The ownership and validity, or title, of unpatented mining claims are often uncertain and may be contested. A successful claim contesting our title orinterest to a property or, in the case of the Mt. Hope Project, the landowner’s title or interest to such property could cause us and/or the LLC to lose the rights tomine that property. In addition, the success of such a claimant could result in our not being compensated for our prior expenditures relating to the property. Climate change and climate change legislation or regulations may adversely impact General Moly’s planned future operations Energy is anticipated to be a significant input in General Moly’s operations. A number of governmental bodies have introduced or are contemplatinglegislative and regulatory change in response to the possible impacts of climate change. The United States (“U.S.”) Congress and several U.S. States haveinitiated legislation regarding climate change that could affect energy prices and demand. In December 2009, the U.S. EPA issued an endangerment findingunder the U.S. Clean Air Act indicating that current and projected concentrations of certain mixed greenhouse gases in the atmosphere, including carbondioxide, threaten the public health and welfare. It is possible that proposed regulation may be promulgated in the United States to address the concerns raisedby the endangerment finding. Legislation and increased regulation regarding climate change could impose increased costs on us, our partners and our suppliers, includingincreased energy, capital equipment, environmental monitoring and reporting and other costs to comply with such regulations. Until the timing, scope andextent of any future regulation becomes known, we cannot predict the effect on our financial condition, financial position, results of operations and ability tocompare. The possible physical impacts of climate change on the Company’s planned future operations are highly uncertain and would be particular to thegeographic circumstances in the area in which we operate. These may include changes in rainfall, storm patterns and intensities, shortages of water or othernatural resources, changing sea levels, and changing temperatures. These effects may adversely impact the cost, production and financial performance ofGeneral Moly’s planned future operations. Mineral exploration and mining activities require compliance with a broad range of laws and regulations, and compliance with or violation ofthese laws and regulations may be costly Mining operations and exploration activities are subject to federal, state, and local laws and regulations governing prospecting, development, mining,production, exports, taxes, labor standards, occupational health and safety, waste disposal, toxic substances, land use, environmental protection, reclamationobligations, and mine safety. In order to comply with applicable laws and regulations, we may be required to make capital and operating expenditures or toclose an operation until a particular problem is remedied. In addition, if our activities violate any such laws and regulations, we may be required tocompensate those suffering loss or damage, and may be fined if convicted of an offense under such legislation. We may also incur additional expenses andour projects may be delayed as a result of changes and amendments to such laws and regulations, including changes in local, state, and federal taxation. Land reclamation requirements for exploration properties may be burdensome, may divert funds from our exploration programs and couldhave an adverse effect on our financial condition Although variable, depending on location and the governing authority, land reclamation requirements are generally imposed on mineral explorationcompanies, as well as companies with mining operations, in order to minimize long term effects of land disturbance. Reclamation may include requirementsto control dispersion of potentially deleterious effluents and to reasonably re-establish pre-disturbance landforms and vegetation. In order to carry outreclamation obligations imposed on us in connection with our mineral exploration, we and the LLC must allocate financial resources that might otherwise bespent on further exploration programs. Such costs could also have an adverse effect on our financial condition. 30Table of Contents Non-compliance with our Mt. Hope Lease could result in loss of the LLC’s rights to develop the Mt. Hope Project and may adversely affect ourbusiness The LLC leases the Mt. Hope Project from MHMI under the Mt. Hope Lease. Failure to comply with the terms of the Mt. Hope Lease (whichprincipally require us to make prescribed payments on or before certain prescribed dates) could result in loss of the LLC’s rights to develop the Mt. HopeProject. Any loss of rights under the Mt. Hope Lease would have a material adverse effect on us and our ability to generate revenues. Our ability to operate our Company effectively could be impaired if we lose key personnel or if we are not able to attract and retain theadditional personnel we will need to develop any of our projects, including the Mt. Hope Project We are a small company with a limited operating history and relatively few employees. The development of any of our proposed projects, includingthe Mt. Hope Project, will place substantial demands on us. We depend on the services of key executives and a small number of personnel, including ourChief Executive Officer, Chief Financial Officer, Chief Operating Officer, Corporate Counsel and Vice President of Human Resources, Mt. Hope GeneralManager, Controller and Treasurer, and Director of Environmental and Permitting. We will be required to recruit additional personnel and to train, motivateand manage these new employees. The number of persons skilled in the development and operation of mining properties is limited and significant competitionexists for these individuals. We may not be able to employ key personnel or to attract and retain qualified personnel in the future. We do not maintain “keyperson” life insurance to cover our executive officers. Due to the relatively small size of our company, the loss of any of our key employees or our failure toattract and retain key personnel may delay or otherwise adversely affect the development of the Mt. Hope Project, which could have a material adverse effect onour business. We rely on independent contractors and experts and technical and operational service providers over whom we may have limited control Because we are a small development stage company, we rely on independent contractors to assist us with technical assistance and services,contracting and procurement and other matters, including the services of geologists, attorneys, engineers and others. Our limited control over the activities andbusiness practices of these service providers or any inability on our part to maintain satisfactory commercial relationships with them may adversely affect ourbusiness, results of operations, and financial condition. Changes to the General Mining Law of 1872 and related federal legislation that impact unpatented mining claims could adversely impact theMt. Hope Project The Mt. Hope Project is located substantially on unpatented mining claims administered by the BLM. Mining on unpatented mining claims isconducted pursuant to the General Mining Law of 1872 and amendments thereto. Legislation for the amendment of the mining laws applicable to miningproperty has been considered by the United States Congress, which may include imposition of a governmental royalty and new permitting and environmentalrules. Amendments to the mining laws could cause delays, increase the costs, and have an adverse effect on the returns anticipated from the Mt. Hope Project. Increased costs could affect our ability to become profitable Costs at any particular mining location frequently are subject to variation due to a number of factors, such as changing ore grade, changingmetallurgy, and revisions to mine plans in response to the physical shape and location of the ore body. In addition, costs are affected by the price ofcommodities, such as fuel, electricity, and labor. Commodity costs are at times subject to volatile price movements, including increases that could makeproduction at our projects less profitable or uneconomic. We anticipate significant capital expenditures over the next several years in connection with the development of the Mt. Hope Project. In the pastseveral years, costs associated with capital expenditures have escalated on an industry-wide basis as a result of major factors beyond our control, includingthe prices of oil, steel and other commodities. Increased costs for capital expenditures have an adverse effect on the returns anticipated from the Mt. HopeProject. 31Table of Contents Shortages of critical parts, equipment and skilled labor may adversely affect our development projects The industry has been impacted at times by increased worldwide demand for critical resources such as input commodities, drilling equipment, tires,and skilled labor. Shortages may cause unanticipated cost increases and delays in delivery times, potentially impacting operating costs, capital expenditures,and production schedules. Cost estimates and timing of new projects are uncertain The capital expenditures and time required to develop new mines or other projects are considerable and changes in costs or construction schedulescan affect project economics. There are a number of factors that can affect costs and construction schedules, including, among others: · Availability of water, labor, power, transportation, commodities, and infrastructure; · Increases in input commodity prices and labor costs; · Fluctuations in exchange rates; · Availability of financing; · Difficulty of estimating construction costs over a period of years; and · Delays in obtaining environmental or other government permits, including appeals of granted water applications. Legislation, including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act, may make itdifficult for us to retain or attract officers and directors and increase the costs of doing business, which could adversely affect our financial positionand results of operations We may be unable to attract and retain qualified officers, directors and members of board committees required to provide for our effectivemanagement as a result of the recent changes and currently proposed changes in the rules and regulations, which govern publicly-held companies. TheSarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executiveofficers. The Dodd-Frank Wall Street Reform and Consumer Protection Act, adopted in July 2010, imposes significant additional obligations and disclosurerequirements, as to which SEC rulemaking is ongoing. We are a small company with a limited operating history and no revenues or profits, which mayinfluence the decisions of potential candidates we may recruit as directors or officers. The real and perceived increased personal risk associated with theserequirements may deter qualified individuals from accepting these roles. In addition, costs of compliance with such legislation, including several provisionsspecifically applicable to companies engaged in mining operations, could have a significant impact on our financial position and results of operations. Provisions of Delaware law and our charter and bylaws may delay or prevent transactions that would benefit stockholders Our certificate of incorporation and bylaws and the Delaware General Corporation Law contain provisions that may have the effect of delaying,deferring or preventing a change of control of the company. These provisions, among other things: · Provide for staggering the terms of directors by dividing the total number of directors into three groups; · Authorize our board of directors to set the terms of preferred stock; · Restrict our ability to engage in transactions with stockholders with 15% or more of outstanding voting stock; · Authorize the calling of special meetings of stockholders only by the board of directors, not by the stockholders; · Limit the business transacted at any meeting of stockholders to those purposes specifically stated in the notice of the meeting; and 32Table of Contents · Prohibit stockholder action by written consent without a meeting and provide that directors may be removed only at a meeting of stockholders. Because of these provisions, persons considering unsolicited tender offers or other unilateral takeover proposals may be more likely to negotiate withour board of directors rather than pursue non-negotiated takeover attempts. As a result, these provisions may make it more difficult for our stockholders tobenefit from transactions that are opposed by an incumbent board of directors. Forward-Looking Statements Certain statements in this document may constitute forward-looking statements, which involve known and unknown risks, uncertainties and otherfactors, which may cause actual results, performance or achievements of our company, the Mt. Hope Project and our other projects, or industry results, to bematerially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We use the words “may,”“will,” “believe,” “expect,” “anticipate,” “intend,” “future,” “plan,” “estimate,” “potential,” and other similar expressions to identify forward-lookingstatements. Forward-looking statements may include, but are not limited to, statements with respect to the following: · Our dependence on the success of the Mt. Hope Project; · The ability to obtain all required permits, water rights, and approvals for the Mt. Hope Project and the Liberty Property; · Issues related to the management of the Mt. Hope Project pursuant to the LLC Agreement; · The dependence of additional investments by Hanlong and a loan from a Chinese bank on significant consents, approvals and conditionsprecedent which may not be obtained or met; · Negotiation of acceptable loan terms with a Chinese bank in connection with the Hanlong transaction; · Risks related to the failure of POS-Minerals to make contributions pursuant to the LLC Agreement; · Fluctuations in the market price of, and demand for, molybdenum and other metals; · The estimation and realization of mineral reserves and production estimates, if any; · The timing of exploration, development and production activities and estimated future production, if any; · Estimates related to costs of production, capital, operating and exploration expenditures; · Requirements for additional capital and our ability to obtain additional capital in a timely manner and on acceptable terms; · Our ability to renegotiate, restructure, suspend, cancel or extend payment terms of contracts as necessary or appropriate in order to conservecash; · Government regulation of mining operations, environmental conditions and risks, reclamation and rehabilitation expenses; · Title disputes or claims; · Limitations of insurance coverage; and · The future price of molybdenum, copper or other metals. These forward-looking statements are based on our current expectations and are subject to a number of risks and uncertainties, including those identifiedunder “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Although we believe that theexpectations reflected in these forward-looking 33Table of Contents statements are reasonable, our actual results could differ materially from those expressed in these forward-looking statements, and any events anticipated in theforward-looking statements may not actually occur. ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 3. LEGAL PROCEEDINGS On March 26, 2009, the Nevada State Engineer approved the Company’s water applications that requested mining and milling use of 11,300 acrefeet annually of water to be drawn from a well field near the Mt. Hope Project. Two appeals of the ruling were filed with the Seventh Judicial District Court ofthe State of Nevada (“NDC”) challenging the State Engineer’s decision. On April 21, 2010, the District Court entered an order remanding the matter foranother hearing by the State Engineer. In June 2010, the Company filed a second set of applications with the State Engineer’s office requesting permits formining and milling use of 11,300 acre feet annually of water to be drawn from a well field near the Mt. Hope Project. On July 15, 2011, the State Engineer issued a second Ruling granting the Company’s water right applications. In August 2011, Eureka County andtwo other parties comprised of three individual water rights holders in Diamond Valley and one in Kobeh Valley, filed Petitions and Amended andSupplemental Petitions (“Petitions”) with the NDC appealing the second Ruling of the State Engineer. We continue to anticipate a favorable NDC decision,upholding the State Engineer’s second Ruling. The appeal hearing is set for April 3, 2012 before the NDC. A decision by the NDC is expected in mid-2012,although the NDC is not required to act under any specified timeline. The appeal does not prevent the State Engineer from issuing the permits and as such,the State Engineer completed issuance of all permits on December 14, 2011 and certain amended permits on January 4, 2012 subject to the second Ruling. The water will become available for consumptive use following the State Engineer’s approval of the Company’s Monitoring, Management and Mitigation Plan(“3M Plan”), developed with the input and cooperation of Eureka County. The Company is continuing to work with the State Engineer and Eureka Countyfollowing our prior submissions, to finalize the 3M Plan and we anticipate the State Engineer will approve the 3M Plan prior to commencement of construction,in the second half of 2012. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 34Table of Contents PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASESOF EQUITY SECURITIES Market Information On August 16, 2006 our common stock began trading on the American Stock Exchange (“NYSE Amex”) under the symbol “GMO.” OnFebruary 14, 2008 our common stock began trading on the Toronto Stock Exchange (“TSX”), also under the symbol “GMO.” The following table sets forth our common stock closing price as reported on the NYSE Amex: YearQuarterHighLow2011First Quarter$6.52$4.82Second Quarter$5.81$4.04Third Quarter$4.78$2.81Fourth Quarter$3.84$2.372010First Quarter$3.99$2.12Second Quarter$4.30$3.08Third Quarter$3.66$2.90Fourth Quarter$7.00$3.56 Holders As of February 28, 2012, there were approximately 522 holders of record of our common stock. Dividends We have never declared or paid dividends on our common stock and we do not anticipate paying any dividends on our common stock in theforeseeable future. We will pay dividends on our common stock only if and when declared by our board of directors. Our board’s ability to declare adividend is subject to limits imposed by Delaware corporate law. In determining whether to declare dividends, the board will consider these limits, ourfinancial condition, results of operations, working capital requirements, future prospects, and other factors it considers relevant. Equity Compensation Plans See Note 7 to the Financial Statements herein for information relating to our Equity Compensation Plan. Stock Performance Graph The performance graph covers the period from December 31, 2006 through December 31, 2011. The graph compares the total return of our commonstock (GMO) to the Dow Jones US Mining Index, the AMEX Russell 2000 Index and selected competitors in our industry, assuming an initial investment of$100.00. 35Table of Contents Company31-Dec-0631-Dec-0731-Dec-0831-Dec-0931-Dec-1031-Dec-11General Moly (GMO)$100.00$399.66$40.41$71.23$221.92$105.82Thompson Creek Metals(TCM)100.00172.0449.65124.92147.9270.52Moly Mines (MOL)100.00316.3525.9677.88155.7728.85Freeport McMoRan (FCX)100.00186.8745.78150.40231.49146.26Augusta Resources (AZC)100.00204.1921.40112.56177.21144.19iShares Dow Jones BasicMaterials100.00131.5964.67106.28139.24118.00iShares Russell 2000100.0098.2364.6983.13105.51100.83 36Table of Contents ITEM 6. SELECTED FINANCIAL DATA (in millions, except per share data)For the Years Ended December 31,20112010200920082007Loss from operations(15.2)(16.6)(10.5)(16.1)(39.0)Net loss(14.8)(16.7)(10.5)(14.4)(37.7)Basic and diluted net loss per share$(0.16)$(0.22)$(0.14)$(0.21)$(0.71) At December 31,20112010200920082007Total assets$271.1$273.2$209.6$220.9$110.3Contingently redeemable noncontrolling interest98.198.899.8100.0—Total stockholders’ equity$143.1$136.4$104.9$113.0$102.1 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations constitutes management’s review of the factors thataffected our financial and operating performance for the years ended December 31, 2011, 2010 and 2009. This discussion should be read in conjunction withthe consolidated financial statements and notes thereto contained elsewhere in this report. Overview We are a development stage company and began the development of the Mt. Hope Project on October 4, 2007. During the year ended December 31,2008 we also completed work on a pre-feasibility study of our Liberty Property, which we updated during 2011. The development of the Mt. Hope Project has a Project Capital Estimate of $1,154 million including development costs of approximately $1,039million (in 2008 dollars) and $115 million in cash financial assurance requirements and pre-payments. The Project Capital Estimate is based on 2009constant dollars and is subject to escalation. We anticipate updating the Project Capital Estimate later this year. These amounts do not include financing costsor amounts necessary to fund operating working capital and potential capital overruns. From October 2007 through the year ended December 31, 2011, wehave spent approximately $189.0 million on the Mt. Hope Project. In 2009, because of declining molybdenum prices and unanticipated delays in the Mt. Hope Project permitting process, we implemented a cashconservation plan whereby total cash utilization, other than equipment purchases and permitting efforts, was reduced to approximately $1 million per month. The Company has maintained its orders for grinding, milling, and other specialty long-lead equipment. However, other engineering, administrative and thirdparty work was slowed or suspended. We restarted some procurement and engineering efforts in January 2012 following the publication of the DEIS and ourbelief that we are getting closer to the commencement of actual Mt. Hope Project construction. The Company had cash on hand as of December 31, 2011 of$40.7 million to meet its funding requirements for 2012. Based on our current cash on hand and our ongoing cash conservation plan, the Company expects itwill have adequate liquidity through the restart of the project and execution of the financing plan without needing to drawdown available funds from the secondtranche of the Bridge Loan. The worldwide molybdenum price fluctuated between $5.33 per pound in 2003 to over $40.00 per pound in 2005 and traded in the mid-$30s perpound prior to October 2008, when prices fell from approximately $33.50 per pound to $7.70 per pound in April 2009 as a result of the global economiccollapse. Subsequent to April 2009, prices slowly rose, finishing 2009 at $12.00 per pound and further increasing to finish 2010 at $16.40 per pound. During 2011, prices traded in a relatively narrow range between $12.85 and $17.70 per pound, finishing the year at $13.40 per pound, according to Ryan’sNotes. Since the beginning of 2012, prices have traded slightly higher and are currently trading at $14.70 per pound. 37Table of Contents The permitting process for the Mt. Hope Project has also had an impact on our activities because of delays experienced from extensive regulatoryreviews and additional requests for information on environmental impacts. Nevertheless, the process continues to move toward completion, and our efforts inthis regard have continued full-time. Once the major operating permits and the ROD from the BLM are effective, and financing is available, it is expected thatMt. Hope can be constructed and in production within approximately 20 months. Restructuring and Suspension of Project Development As discussed above, in March 2009, we implemented a cash conservation plan to reduce expenditures and conserve cash in order to maximizefinancial flexibility. Engineering efforts related to the Mt. Hope Project, which currently are approximately 60% complete, were restarted in January 2012following the publication of the DEIS. As of March 2009, the LLC had purchase orders for mining and milling process equipment. Some orders for mining equipment were cancelled,while orders for electric shovels and haul trucks were modified to become cancellable or non-binding. Most equipment orders for the custom-built grindingand other milling process equipment are being completed by the manufacturers, and this equipment is being or will be stored pending commencement ofconstruction. The grinding and milling process equipment require the longest lead times and maintaining these orders is critical to the Company’s ability torapidly restart the Mt. Hope Project development. The LLC completed negotiations with other equipment manufacturers to suspend or terminate fabrication ofother milling equipment. As funding becomes available and equipment procurement is restarted, agreements that were suspended or terminated will berenegotiated under new market terms and conditions, as necessary. Based on our current plan, expected timetable, and the results of such negotiations, we expect to make additional payments on milling processequipment orders of approximately $3.7 million in 2012 and $13.0 million in 2013. For the gyratory crusher, SAG and ball mills and related electric milldrives, and some other long-lead equipment, we will own the equipment upon final payments forecasted to occur in 2012 and early 2013. Also, atDecember 31, 2011, we have a contract to purchase two electric shovels that is cancellable, has no firm schedule of payments, and includes a $3.4 milliondeposit that is forfeitable if an additional $13.0 million deposit is not made by June 30, 2012. The LLC continues to need this equipment for constructionphase mine development and post-construction mining, and is committed to either renegotiate the timing and amount of the contractual deposit terms to providemore payment flexibility or obtaining additional funding sources in order to make this payment without impacting our liquidity position. On February 28, the LLC issued a firm purchase order for 18 haul trucks to Cashman Equipment Company, the Nevada-based dealer forCaterpillar. The order provides for delivery of those haul trucks required to perform initial mine development, currently scheduled for the second half of2013. A non-refundable down-payment of $0.6 million was made at the time of order with an additional $0.6 million due 12 months prior to truck shipment,but the contract is cancellable with no further liability to the LLC up until the time of truck shipment. An additional 6 haul trucks are not required until afterthe commencement of commercial production, and will be ordered at a future date. The cash conservation plan reduced our total cash utilization for general administrative and overhead expenses to approximately $1 million permonth, inclusive of maintenance costs at the Liberty Property. Based on our current cash on hand and our cash conservation plan, the Company expects itwill have adequate liquidity through the restart of the project and execution of the financing plan. The Mt. Hope LLC Agreement Effective as of January 1, 2008, we contributed all of our interest in the assets related to the Mt. Hope Project, including our lease of the Mt. HopeProject into a newly formed entity, Eureka Moly, LLC, a Delaware limited liability company (“LLC”), and in February 2008 (“Closing Date”) entered into anagreement (“LLC Agreement”) for the development and operation of the Mt. Hope Project with POS-Minerals Corporation (“POS-Minerals”) an affiliate ofPOSCO, a large Korean steel company. Under the LLC Agreement, POS-Minerals owns a 20% interest in the LLC and General Moly, through a wholly-owned subsidiary, owns an 80% interest. The ownership interests and/or required contributions under the LLC Agreement can change as discussed below. Pursuant to the terms of the LLC Agreement, POS-Minerals made its first and second cash contributions to the LLC totaling $100.0 million duringthe year ended December 31, 2008 (“Initial Contributions”). Additional amounts will be due from POS-Minerals within 15 days after the date (“RODContribution Date”) that specified conditions (“ROD Contribution Conditions”) have been satisfied. The ROD Contribution Conditions are (i) the receipt ofmajor operating permits for the Mt. Hope Project, (ii) confirmation that the Record of Decision (“ROD”) from the United States Bureau of Land Management 38Table of Contents (“BLM”) for the Mt. Hope Project has become effective, and (iii) any administrative or judicial appeals with respect thereto are final. We are currently targetingthe effective date of the ROD and the satisfaction of the other ROD Contribution Conditions to occur between June and September 2012. However,circumstances beyond our control, including reviewing agency delays or requests for additional information or studies, and requests for review or appeals ofthe BLM decision, could cause the effectiveness of the ROD and/or the satisfaction of the other ROD Contribution Conditions to be delayed beyond thatexpected time. Once the ROD is effective and financing is in place, we expect that production will begin approximately 20 months following initiation ofproject construction. To maintain its 20% interest in the LLC, POS-Minerals will be required to make an additional $56.0 million contribution plus its 20% share of allMt. Hope Project costs incurred from the Closing Date to the ROD Contribution Date within 15 days after the ROD Contribution Date. If POS-Minerals doesnot make its additional $56.0 million contribution when due after the ROD Contribution Date, its interest will be reduced to 10%. In addition, as commercial production at the Mt. Hope Project was not achieved by December 31, 2011, the LLC may be required to return to POS-Minerals $36.0 million of its contributions to the LLC, with no corresponding reduction in POS-Minerals’ ownership percentage. Based on our current planand assuming POS-Minerals has made its additional $56.0 million contribution within 15 days after the ROD Contribution Date, a payment to POS-Minerals of $36.0 million will be due 20 days after the commencement of commercial production, as defined in the LLC Agreement. We currently anticipatesuch payment being made during 2014. If POS-Minerals does not make its additional $56.0 million contribution when due, no return of contributions isrequired by us. Our wholly-owned subsidiary and 80% owner of the LLC, Nevada Moly, LLC (“Nevada Moly”), is obligated under the terms of the LLCAgreement to make capital contributions to fund the return of contributions to POS-Minerals, if required. If Nevada Moly does not make these capitalcontributions, POS-Minerals has an election to either make a secured loan to the LLC to fund the return of contributions, or receive an additional interest in theLLC of approximately 5%. In the latter case, our interest in the LLC is subject to dilution by a percentage equal to the ratio of 1.5 times the amount of theunpaid contributions over the aggregate amount of deemed capital contributions (as determined under the LLC Agreement) of both parties to the LLC (“DilutionFormula”). At December 31, 2011, the aggregate amount of deemed capital contributions of both parties was $880.0 million. Furthermore, the LLC Agreement permits POS-Minerals to put its interest in the LLC to Nevada Moly after a change of control of Nevada Moly orthe Company, as defined in the LLC Agreement, followed by a failure to use standard mining industry practice in connection with development and operationof the Mt. Hope Project as contemplated by the parties for a period of twelve consecutive months. If POS-Minerals puts its interest, Nevada Moly or itstransferee or surviving entity would be required to purchase the interest for 120% of POS-Minerals’ contributions to the LLC plus 10% interest per annum. The Initial Contributions of $100.0 million that were made by POS-Minerals during 2008 were expended by the second quarter of 2009 in accordancewith the program and budget requirements of the Mt. Hope Project. Nevada Moly is required, pursuant to the terms of the LLC Agreement, to advance fundsrequired to pay costs for the development of the Mt. Hope Project that exceed the Initial Contributions until the ROD Contribution Date, at which point thecontributions described above to be made by POS-Minerals will be applied to reimburse us for POS-Minerals’ share of such development costs. All costsincurred after the ROD Contribution Date will be allocated and funded pro rata based on each party’s ownership interest. POS-Minerals’ share of suchdevelopment costs amounted to approximately $37.5 million as of December 31, 2011. The interest of a party in the LLC that does not make its pro ratacapital contributions to fund costs incurred after the ROD Contribution Date is subject to dilution based on the Dilution Formula. Agreements with Hanlong (USA) Mining Investment Inc. We have signed a series of agreements (the “Hanlong Transaction”) with Hanlong (USA) Mining Investment, Inc. (“Hanlong”), an affiliate ofSichuan Hanlong Group, a large privately held Chinese company. The agreements described below form the basis of a $745 million transaction that isintended to provide the Company with adequate capital to develop the Mt. Hope Project. The agreements include: (a) a Securities Purchase Agreement thatprovides for the sale to Hanlong of shares of our common stock in two tranches that will aggregate 25% of our outstanding stock on a fully diluted basis for$80 million ($40 million per tranche), conditioned upon us receiving permits for Mt. Hope and Hanlong’s use of commercially reasonable efforts to procure a$665 million loan from a Prime Chinese Bank for our use in constructing Mt. Hope; (b) a Bridge Loan whereby Hanlong will provide up to $20 million tothe Company to preserve liquidity until permits are received; (c) a Stockholder Agreement that provides Hanlong representation on our Board of Directors andthe LLC management committee, governs how Hanlong will vote its shares of the Company and limits Hanlong’s ability to purchase or dispose of oursecurities; and (d) a long-term molybdenum supply off-take agreement. 39Table of Contents The Securities Purchase Agreement (“Purchase Agreement”) Stock Purchase. The Purchase Agreement provides, subject to its terms and conditions, for the purchase by Hanlong of $80.0 million of ourcommon stock, or approximately 27.6 million shares, which will equal 25% of our outstanding common stock on a fully-diluted basis. The Purchase Agreement has been amended four times including: (1) a July 30, 2010 amendment extending the deadline for obtaining Chinesegovernment approvals by two months to October 13, 2010, as well as extending the Company’s deadline for publishing its DEIS and receiving its ROD toFebruary 28, 2011, and November 30, 2011, respectively. Hanlong has received Chinese government approvals for its equity investment in us and our DEIShas been published; (2) an October 26, 2010 amendment setting the closing of Hanlong’s purchase of the first $40.0 million tranche of equity forDecember 20, 2010 and eliminating the condition that required us to have our DEIS published prior to closing this funding; (3) a December 20, 2010amendment that made certain non-substantive changes in connection with the Tranche 1 closing; and (4) July 7, 2011 amendment that eliminated the deadlinefor publication of the DEIS, extended the ROD deadline from November 30, 2011 to the earlier of nine months following DEIS publication or September 30,2012, extended Hanlong’s commitment to make available the Term Loan from two months following the ROD to nine months following the ROD, and extendedthe maturity date of the Bridge Loan to the earlier of (i) 270 days after the issuance of the ROD, (ii) the date on which the Purchase Agreement terminates, and(iii) the earlier of December 31, 2012 and the availability of the Term Loan. The ROD deadline is extendable by up to three months to December 31, 2012, as discussed below. The Purchase Agreement may be terminated byeither party (provided the terminating party is not in default) if the closing of the second tranche (“Tranche 2”) has not occurred on or before the earlier ofSeptember 30, 2012 (unless the parties have agreed to the ROD Condition Extension date of December 31, 2012) or twelve months after the issuance of theROD. As discussed above, the second tranche will be for a purchase price of an additional $40.0 million. Significant conditions to the closing ofTranche 2 include issuance of the ROD for the Mt. Hope Project by the BLM, approval of the plan of operations for the Mt. Hope Project (the “POO”) by theBLM, and the completion of documentation for and satisfaction of conditions precedent for the availability of funding under the Term Loan, described below. Hanlong will have the right to purchase a portion of any additional shares of common stock that we issue so that it can maintain its percentageownership, unless its ownership is at the time below 5% at the earlier of the closing of Tranche 2 or closing of the Term Loan. It may also acquire additionalshares so that it maintains a 20% indirect interest in the Mt. Hope Project if our interest in the LLC is reduced below 80%. If we issue shares to fund theMt. Hope Project under certain circumstances, and on or before the date of commercial production, and Hanlong exercises its rights to maintain its percentageinterest, we will be obligated to refund to Hanlong the cost of such shares over a three-year period up to an aggregate of $9.0 million. Break Fees. A break fee is payable by both the Company and Hanlong if the Purchase Agreement terminates because of the failure of certainconditions. A break fee of $10.0 million is payable to the Company if the Purchase Agreement is terminated because Hanlong fails to obtain necessary Chinesegovernment approvals, which may be offset against any balances owed by the Company under the Bridge Loan. A break fee of $5.0 million is payable toHanlong if the ROD is not timely received or the condition waived and the Purchase Agreement is terminated. The Company’s break fee may be increased by$5.0 million if the Purchase Agreement is terminated and the Company has violated the “no-shop” provisions of the Purchase Agreement. The break fees mayalso be increased by up to $2.0 million if the Company requests and Hanlong grants an extension concerning the ROD (the “Extension Fee”). Any such feewill be credited against the arrangement fee described below. The break fee payable by the Company to Hanlong may be paid in cash, or, in certaincircumstances, in shares of our common stock at our option. If paid in shares, the price would be the volume weighted average of our common stock on theNYSE Amex for the five days ending six days after the announcement of the termination. On January 9, 2012, the Company and Hanlong executed an optionagreement concerning the Purchase Agreement for no consideration. The option must be exercised on or before December 31, 2012. If the option is exercised,the parties will amend the Purchase Agreement to extend payment of the Extension Fee from December 2012 until April 30, 2013. Chinese Bank Term Loan. Hanlong is obligated to use commercially reasonable efforts to procure a Term Loan in an amount of at least$665.0 million with a term of at least 14 years after commercial production begins at the Mt. Hope Project. The Term Loan will bear interest at a rate tied tothe London Interbank Offered Rate (“LIBOR”) plus a spread of between 2% and 4% per annum. The Purchase Agreement provides that the Term Loan willhave customary covenants and conditions; however, the terms of the Term Loan have not yet been negotiated with the lender and we have no assurance as to 40Table of Contents the final terms of the Term Loan. On February 16, 2012, the Company announced China Development Bank (“CDB”) had confirmed the basic termsunderlying a proposed $665 million term loan to finance the Mt. Hope project, including a CDB commitment to lend $399 million and arrange a consortiumof Chinese and international banks to fund the balance. The term loan is anticipated to carry a maturity of 12 years including a 30 month grace period toallow for the construction of the Mt. Hope project. The interest rate will remain subject to market conditions and Chinese government policy. The Companyand Hanlong are continuing to work with CDB with a target of having the loan completed, approved and available to the Company upon receipt of Mt. Hope’soperating permits. Hanlong or an affiliate is obligated to guarantee the Term Loan. When funds can be drawn by the Company under the Term Loan, theCompany will pay a $15.0 million arrangement fee to Hanlong who will pay fees and expenses associated with the Term Loan before the Term Loan Closing,including those charged by the Chinese bank. Bridge Loan Hanlong agreed to provide a $20.0 million Bridge Loan to the Company, available in two equal $10.0 million tranches. On April 28, 2010, we drewdown the first $10.0 million tranche. The second tranche became available after receiving stockholder approval of the Hanlong Transaction. The first trancheof the Bridge Loan bears interest at LIBOR plus 2% per annum. The second tranche of the Bridge Loan will bear interest at 10% per annum and is undrawn. The Bridge Loan will be repaid from the proceeds of the Term Loan. The second tranche may also be repaid at the Company’s election, in shares of theCompany’s common stock. If paid in shares, the price would be the volume weighted average of the Company’s shares on the NYSE Amex for a five-dayperiod after public announcement of the event that required repayment. The Company may offset its right to receive the break fee against its obligations torepay borrowings under the Bridge Loan. On January 9, 2012, the Company and Hanlong executed an option agreement concerning the Bridge LoanAgreement. If exercised, the parties will amend the Bridge Loan Agreement to extend the maturity date of the Bridge Loan from December 31, 2012 untilApril 30, 2013. This option also has the effect of potentially extending the availability of the undrawn $10.0 million second tranche to April 30, 2013 since theavailability of the second tranche ends the earliest of the Tranche 2 closing date, the maturity date of the Bridge Loan, and the first borrowing under the TermLoan. The outstanding balance of the Bridge Loan and related accrued interest are recorded as a current liability as of December 31, 2011 as the Companyanticipates the Term Loan will become available within the next twelve months. The Bridge Loan and our obligation to pay a break fee to Hanlong under thePurchase Agreement are secured by a pledge by us of a 10% interest in the LLC. Stockholder Agreement In connection with Hanlong’s purchase of our shares, Hanlong signed a Stockholder Agreement with the Company that limits Hanlong’s futureacquisitions of our common stock, provides for designation of up to two directors to our Board and representation on the LLC management committee, andplaces some restrictions on Hanlong’s voting and disposition of our shares. After the Tranche 1 closing, Hanlong became entitled to nominate one director to serve on our Board and one representative to the LLC managementcommittee. Nelson Chen currently serves in both of these capacities. After the Tranche 2 closing, Hanlong will be entitled to nominate a second director. TheCompany will include and recommend the election of Hanlong’s nominees in the Board’s slate of nominees submitted to our stockholders, subject to theBoard’s fiduciary obligations and compliance by the nominee with applicable law and Company requirements concerning disclosure of information. TheHanlong nominees may also serve on committees for which they are eligible. Hanlong has agreed not to purchase additional shares, except as permitted by the Purchase Agreement, without the Company’s prior consent, and hasagreed that it will not solicit proxies, join a group with respect to our equity securities, solicit or encourage an offer from another person for the Company, call ameeting of the Company’s stockholders or make a proposal to the Company’s stockholders, except to the Board. If our Board receives an offer for theCompany, for its assets or a merger that the Board determines is in the best interests of the Company’s stockholders, Hanlong is required to vote in favor ofsuch a transaction or tender its shares unless it proposes an alternative transaction that our Board determines is more favorable to our stockholders than theoffer received. Hanlong may not, without the prior written consent of the Board, transfer ownership of their securities if the recipient would acquire beneficialownership of more than 5% of our common stock as of the date of such transfer. The restrictions on Hanlong’s share ownership, voting, disposition anddrag-along rights will terminate on the earlier of the time that Hanlong owns less than 10% of our common stock, the date that is 6 months after the date thatcommercial production begins at the Mt. Hope Project, and June 30, 2014. 41Table of Contents ArcelorMittal n/k/a APERAM Participation The Company’s November 2007 private placement of 8.257 million shares with ArcelorMittal included certain anti-dilution rights. Pursuant tothose rights, ArcelorMittal had an option to participate in the Tranche 1 and Tranche 2 equity issuances. On April 16, 2010, the Company and ArcelorMittalentered into a Consent and Waiver Agreement (the “Agreement”) whereby ArcelorMittal waived its anti-dilution rights with respect to the Company’s proposedissuance of stock under the Hanlong investment. ArcelorMittal will retain anti-dilution rights for future issuances of Company stock outside of shares soldunder the Hanlong investment. On January 25, 2011, the boards of directors of ArcelorMittal S.A. and APERAM each approved the transfer of the assetscomprising ArcelorMittal’s stainless and specialty steels businesses from its carbon steel mining businesses to APERAM, a separate entity incorporated in theGrand Duchy of Luxembourg. This transfer included the off-take agreement the Company had in place with ArcelorMittal and the shares of the Company’scommon stock previously owned by ArcelorMittal. For further detail on our off-take agreements, see Item 7A below. Liquidity, Capital Resources and Capital Requirements Year Ended December 31, 2011 Compared to Year Ended December 31, 2010 Our total consolidated cash balance at December 31, 2011 was $40.7 million compared to $53.6 million at December 31, 2010. The decrease in ourcash balances for the year ended December 31, 2011 was due primarily to development expenditures and debt issuance costs incurred of $12.8 million,advance royalty payments of $9.5 million, and general and administrative costs of $10.2 million offset by $19.4 million in proceeds from the exercise ofoutstanding warrants. Deposits on property, plant and equipment relate primarily to scheduled payments for long-lead time equipment for the Mt. HopeProject. See “— Contractual Obligations” below. The majority of funds expended were used to advance the Mt. Hope Project. Total assets as of December 31, 2011 decreased to $271.1 million compared to $273.2 million as of December 31, 2010 primarily due to forfeitedlong-term deposits on mining equipment of $3.4 million with the passage of a June 30, 2011 deadline for a firm purchase order. As discussed above under “— Permitting and Water Rights Update”, we currently anticipate the effectiveness of the ROD and the satisfaction of theother ROD Contribution Conditions to occur between June and September 2012, but circumstances beyond our control could cause the effectiveness of theROD and/or the satisfaction of the other ROD Contribution Conditions to be delayed. As discussed above under “— Securities Purchase Agreement with Hanlong (USA) Mining Investment Inc. ,” we have signed a series of agreementswith Hanlong that form the basis of a significant investment by Hanlong in the Company that is intended to provide the Company with adequate capital todevelop the Mt. Hope Project. On April 28, 2010, we drew down the first tranche of the bridge loan from Hanlong in the amount of $10.0 million. OnDecember 20, 2010, Hanlong completed the purchase of 12.5% of our fully-diluted shares, or approximately 11.8 million shares, for $40.0 million. With our cash conservation plan, our non-equipment related cash requirements have declined to approximately $1 million per month. Based on ourcurrent plan and expected timetable, we expect to make additional payments of approximately $3.7 million under milling process equipment orders through theend of 2012 and $13.0 million in 2013. As additional financing becomes available and equipment procurement is restarted, agreements that were suspended orterminated will be renegotiated under current market terms and conditions, as necessary. Based on our Project Capital Estimate we estimate that an additional$9.0 million related to the Construction Royalty Advance must be paid on or before October 19, 2012, which amount has been accrued. Accordingly, basedon our current cash on hand and our ongoing cash conservation plan, the Company expects it will have adequate liquidity through the restart of the project andexecution of the financing plan without needing to drawdown available funds from the second tranche of the Bridge Loan. Year Ended December 31, 2010 Compared to Year Ended December 31, 2009 Our cash balance at December 31, 2010 was $53.6 million compared to $48.6 million at December 31, 2009. The increase in our cash balances forthe year ended December 31, 2010 was due primarily to proceeds from the sale of Tranche 1 equity to Hanlong of $40.0 million, $10.0 million advanced underthe Bridge Loan, and $3.0 million from the exercise of outstanding warrants offset by development costs incurred of $14.1 million, deposits on property, plantand equipment 42Table of Contents totaling $25.1 million, and general and administrative costs of $8.8 million. Deposits on property, plant and equipment relate primarily to scheduledpayments for long-lead time equipment for the Mt. Hope Project. Total assets as of December 31, 2010 increased to $273.2 million compared to $209.6 million as of December 31, 2009 primarily as a result of thecash received upon issuance of the Tranche 1 shares to Hanlong and proceeds from the drawdown of the Tranche 1 Bridge Loan. Results of Operations Year Ended December 31, 2011 Compared to Year Ended December 31, 2010 For the year ended December 31, 2011 we had a consolidated net loss of $15.4 million compared with a net loss of $16.7 million in the same periodfor 2010. For the year ended December 31, 2011 and 2010, exploration and evaluation expenses were $1.6 million and $0.6 million, respectively. The increasein costs compared to the previous year relates to work performed at the Liberty Project to update the pre-feasibility study. For the year ended December 31, 2011 and 2010, general and administrative expenses were $10.2 million and $10.9 million, respectively. For theyear ended December 31, 2011 the decrease in costs compared to the previous year were due primarily to lower costs associated with outside legal counsel. For the year ended December 31, 2011 and 2010, write downs of development and deposits were $3.4 million and $5.0 million, respectively. Thesecosts are due to forfeited long-term deposits on mining equipment with the passage of a June 30, 2011 deadline for a firm purchase order, and therelinquishment of the annex lease to Eureka County during the third quarter of 2010, respectively. For the year ended December 31, 2011 and 2010, interest income rounded to nil as a result of low deposit interest rates on consolidated cash balancesin 2011 and 2010. Interest expense for the year ended December 31, 2011 and 2010 was $0.2 million and $0.2 million, respectively, as a result of interestaccrued on the bridge loan. Year Ended December 31, 2010 Compared to Year Ended December 31, 2009 For the year ended December 31, 2010 we had a net loss of $16.7 million compared with a net loss of $10.5 million in the same period for 2009. For the year ended December 31, 2010 and 2009, exploration and evaluation expenses were $0.6 million and $0.8 million, respectively. For the yearended December 31, 2010 the Liberty remained on a care and maintenance status, and accordingly, the resulting exploration and evaluation expenses areconsiderable lower for the year. For the year ended December 31, 2010 and 2009, general and administrative expenses were $10.9 million and $9.7 million, respectively. For theyear ended December 31, 2010 general and administrative costs were significantly higher than in 2009 as a greater amount of equity compensation wasincurred as a result of the impact of increasing share prices on equity compensation plans and additional awards granted. For the year ended December 31, 2010, write downs of development and deposits was $5.0 million as a result of the Company’s relinquishment of aland lease held by the LLC in Eureka County, Nevada. The LLC had invested $5.0 million in preliminary development costs for the property covered by thelease. As a result of the relinquishment, these costs were written off by the Company. Interest income was nil for the year ended December 31, 2010 and 2009 as a result of low interest rates and cash balances in both years. Interestexpense was $0.2 million and nil for the years ended December 31, 2010 and 2009 as a result of interest accrued on the bridge loan outstanding during 2010. Off-Balance Sheet Arrangements None. 43Table of Contents Contractual Obligations Our contractual obligations as of December 31, 2011 were as follows, based on permitting expectations: Payments due by period(in millions)Contractual obligationsTotal20122013 - 20152016 - 20172018 & BeyondLong-Term Debt (Capital Lease) Obligations$0.1$0.1$—$—$—Operating Lease Obligations0.30.20.1——Agricultural Sustainability Trust Contributions4.02.02.0——Equipment Purchase Contracts16.73.713.0——Advance Royalties and Deferral Fees9.09.0———Provision for post closure reclamation andremediation0.6———0.6Total$30.7$15.0$15.1$—$0.6 At December 31, 2011, the LLC has a contract to purchase two electric shovels that is cancellable and has no firm schedule of payments. We alsohad a non-binding letter of agreement on 24 haul trucks that establishes our priority for delivery. Both agreements provide for the then current pricing usingmarket indices upon initiation of an order. We have active orders with varying stages of fabrication on milling process equipment comprised of two 230kVprimary transformers and substation, a primary crusher, a semi-autogenous mill, two ball mills, and various motors for the mills. We have suspendedfabrication on 16 flotation cells, lime slaking equipment, hydrocyclones, and other smaller milling process equipment with the ability to re-initiate fabricationat any time. The LLC terminated the fabrication of two multi-hearth molybdenum roasters and have received finished goods of the partially completed order. The LLC plans to re-establish a new purchase order with this manufacturer as financing becomes available and equipment procurement is restarted under thencurrent market terms and conditions. On February 28, the LLC issued a firm purchase order for 18 haul trucks to Cashman Equipment Company, the Nevada-based dealer forCaterpillar. The order provides for delivery of those haul trucks required to perform initial mine development, currently scheduled for the second half of2013. A non-refundable down-payment of $0.6 million was made at the time of order with an additional $0.6 million due 12 months prior to truck shipment,but the contract is cancellable with no further liability to the LLC up until the time of truck shipment. An additional 6 haul trucks are not required until afterthe commencement of commercial production, and will be ordered at a future date. 44Table of Contents The following table sets forth the LLC’s cash commitments under mining and milling equipment contracts (collectively, “Purchase Contracts”) atDecember 31, 2011 (in millions): PeriodCash CommitmentsUnder EquipmentPurchase Contracts asof December 31, 20111 Quarter 2012$2.32 Quarter 2012—3 Quarter 2012—4 Quarter 20121.4Total 20123.7201313.02014—2015—Total$16.7 If the Company does not make payments required under the purchase contracts, it could be subject to claims for breach of contract or to cancellationof the purchase contract. In addition, we may proceed to selectively suspend, cancel or attempt to renegotiate additional purchase contracts if we are forced tofurther conserve cash. See “Liquidity, Capital Resources and Capital Requirements” above. If we cancel or breach any contracts, we will take allappropriate action to minimize any losses, but could be subject under the contracts or applicable law. The cancellation of certain key contracts would cause adelay in the commencement of operations, have ramifications under the LLC Agreement with POS-Minerals and would add to the cost to develop our interest inthe Mt. Hope Project. Obligations under capital and operating leases We have contractual obligations under capital and operating leases that will require a total of $0.4 million in payments over the next three years. Assets under capital lease relate to light vehicles leased by the Company for use in operations. Operating leases consist primarily of rents on office facilitiesand office equipment. Our expected payments are $0.3 million, $0.1 million, and nil for the years ended December 31, 2012, 2013 and 2014, respectively. Creation of Agricultural Sustainability Trust On August 19, 2010, the LLC entered into an agreement with the Eureka Producers’ Cooperative (the “EPC”) whereby the LLC will fund aSustainability Trust (the “Trust”) in exchange for the cooperation of the EPC with respect to the LLC’s water rights and permitting of the Mt. Hope Project. The Trust will be tasked with developing and implementing programs that will serve to enhance the sustainability and well-being of the agricultural economyin the Diamond Valley Hydrographic Basin through reduced water consumption, which may include the Trust purchasing and relinquishing water rights inDiamond Valley to help bring the Diamond Valley basin into a more sustainable water balance. The Trust’s activities will be governed by a five-memberboard including one LLC representative. The Trust may be funded by the LLC over several years based on the achievement of certain milestones. The achievement of these milestones isconsidered to be probable, and as such $4.0 million is accrued in the Company’s December 31, 2011, financial statements and is included in miningproperties, land, and water rights. At least 50% of the contributions would be provided upon receipt of all permits, full financing and the Company’s Boardof Directors’ decision to proceed with construction. The remaining payments would be split evenly with one payment due no later than 150 days from thecommencement of commercial production at the Mt. Hope Project and the remaining payment due one year thereafter. Permitting Considerations In the ordinary course of business, mining companies are required to seek governmental permits for expansion of existing operations or for thecommencement of new operations. The LLC will be required to obtain a ROD from the BLM authorizing implementation of the Mt. Hope Project POO. Thisapproval can be obtained only after successful completion of the process of environmental evaluation, which incorporates substantial public comment. TheLLC will also need to obtain various state and federal permits including water protection, air quality, water rights and reclamation permits. In addition torequiring permits for the development of the Mt. Hope Project, we will need to obtain and modify various mining and 45stndrdthTable of Contents environmental permits during the life of the Mt. Hope Project. Obtaining, modifying, and renewing the necessary governmental permits is a complex and time-consuming process involving numerous jurisdictions and often involving public hearings and substantial expenditures. The duration and success of theLLC’s efforts to obtain, modify or renew permits will be contingent upon many variables, some of which are not within the LLC’s control. Increased costs ordelays could occur, depending on the nature of the activity to be permitted and the interpretation of applicable requirements implemented by the permittingauthority. All necessary permits may not be obtained and, if obtained, may not be renewed, or the costs involved in each case may exceed those that wepreviously estimated. It is possible that the costs and delays associated with compliance with such standards and regulations could become such that the LLCwould not proceed with the development or operation of the Mt. Hope Project. Water Rights Considerations In addition to working to complete the EIS, we are working to finalize the transfer of water rights to mining use. In March 2009 we were granted ourwater applications in a Ruling by the State Engineer. However, that Ruling was successfully appealed in April 2010 in Nevada District Court (“NDC”),remanding the matter for another hearing by the State Engineer. On July 15, 2011, the State Engineer issued a second Ruling granting the Company’s water right applications. In August 2011, Eureka County andtwo other parties comprised of three individual water rights holders in Diamond Valley and one in Kobeh Valley, filed Petitions and Amended andSupplemental Petitions (“Petitions”) with the NDC appealing the second Ruling of the State Engineer. We continue to anticipate a favorable NDC decision,upholding the State Engineer’s second Ruling. The appeal hearing is set for April 3, 2012 before the NDC. A decision by the NDC is expected in mid-2012,although the NDC is not required to act under any specified timeline. The appeal does not prevent the State Engineer from issuing the permits and as such,the State Engineer completed issuance of all permits on December 14, 2011 and certain amended permits on January 4, 2012 subject to the second Ruling. The water will become available for consumptive use following the State Engineer’s approval of the Company’s Monitoring, Management and Mitigation Plan(“3M Plan”), developed with the input and cooperation of Eureka County. The Company is continuing to work with the State Engineer and Eureka Countyfollowing our prior submissions, to finalize the 3M Plan and we anticipate the State Engineer will approve the 3M Plan prior to commencement of construction,in the second half of 2012. Environmental Considerations Our mineral property holdings in Shoshone County, Idaho include lands contained in mining districts that have been designated as “Superfund”sites pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act. This “Superfund Site” was established to investigate andremediate primarily the Bunker Hill properties of Smelterville, Idaho, a small portion of Shoshone County where a large smelter was located. However,because of the extent of environmental impact caused by the historical mining in the mining district, the Superfund Site covers the majority of ShoshoneCounty including our Chicago-London and Little Pine Creek properties as well as many small towns located in Northern Idaho. We have conducted aproperty environmental investigation of these properties, which revealed no evidence of material adverse environmental effects at either property. We areunaware of any pending action or proceeding relating to any regulatory matters that would affect our financial position due to these inactive mining claims inShoshone County. Critical Accounting Policies and Estimates Estimates The process of preparing financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions regarding certain typesof assets, liabilities, revenues, and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts. Provision for Taxes Income taxes are provided based upon the asset and liability method of accounting. Under this approach, deferred income taxes are recorded to reflectthe tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. Inaccordance with authoritative guidance for Income Taxes, a valuation allowance is recorded against the deferred tax asset if management does not believe theCompany has met the “more likely than not” standard to allow recognition of such an asset. 46Table of Contents Property, Plant and Equipment The Company evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amount maynot be recoverable. If the sum of estimated future net cash flows on an undiscounted basis is less than the carrying amount of the related asset grouping, assetimpairment is considered to exist. The related impairment loss is measured by comparing estimated future net cash flows on a discounted basis to thecarrying amount of the asset. Changes in significant assumptions underlying future cash flow estimates may have a material effect on the Company’sfinancial position and results of operations. To date no such impairments have been identified. Property and equipment are being depreciated over useful livesof three to twenty-seven and one-half years using straight-line depreciation. Stock-Based Compensation We account for stock-based compensation in accordance with authoritative guidance for Share-Based Payments. Under the fair value recognitionprovisions of this statement, share-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over thevesting period. Determining the fair value of share-based awards at the grant date requires judgment; including estimating expected dividends and estimatingthe amount of share-based awards that are expected to be forfeited. If actual results differ significantly from these estimates, stock-based compensationexpense and our results of operations could be materially impacted. Contingently Redeemable Noncontrolling Interest (“CRNCI”) On January 1, 2009, we adopted Financial Accounting Standards Board (“FASB”) authoritative guidance related to Noncontrolling Interests inConsolidated Financial Statements, the provisions of which, among others, require the recognition of a noncontrolling interest (previously referred to asminority interest), as a component of equity in the consolidated financial statements and separate from the parent’s equity for all periods presented. Inaddition, the amount of net income or loss attributable to the noncontrolling interest is included in net income or loss on the face of the consolidated statementof operations. Under GAAP, certain noncontrolling interests in consolidated entities meet the definition of mandatorily redeemable financial instruments if theability to redeem the interest is outside of the control of the consolidating entity. As described in Note 1, the LLC Agreement permits POS-Minerals the optionto put its interest in the LLC to Nevada Moly upon a change of control, as defined in the LLC Agreement, followed by a failure to use standard miningindustry practice in connection with development and operation of the Mt. Hope Project as contemplated by the parties for a period of twelve consecutivemonths. As such, the CRNCI has continued to be shown as a separate caption between liabilities and equity (mezzanine section). The carrying value of theCRNCI reflects the investment of the noncontrolling interest, less losses attributable to the interest. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Commodity Price Risk We are a development stage company in the business of the exploration, development and mining of properties primarily containing molybdenum. As a result, upon commencement of production, our financial performance could be materially affected by fluctuations in the market price of molybdenumand other metals we may mine. The market prices of metals can fluctuate widely due to a number of factors. These factors include fluctuations with respectto the rate of inflation, the exchange rates of the U.S. dollar and other currencies, interest rates, global or regional political and economic conditions, bankingenvironment, global and regional demand, production costs, and investor sentiment. In order to better manage commodity price risk and to seek to reduce the negative impact of fluctuations in prices, we will seek to enter into long termsupply contracts for our portion of the Mt. Hope production. On December 28, 2007, we entered into a molybdenum supply agreement with ArcelorMittalS.A. (“ArcelorMittal”), the world’s largest steel company, that provides for ArcelorMittal to purchase 6.5 million pounds of molybdenum per year, plus orminus 10%, once the Mt. Hope Project commences commercial operations at minimum specified levels. The supply agreement provides for a floor price alongwith a discount for spot prices above the floor price and expires five years after the commencement of commercial production at the Mt. Hope Project. Both thefloor and threshold levels at which the percentage discounts change are indexed to a producer price index. On April 16, 2010, ArcelorMittal and the Companyentered into an extension molybdenum supply agreement, providing ArcelorMittal with a five-year option to make effective an agreement to purchase from theCompany 3.0 million pounds of molybdenum per year for 10 years following the expiration of the initial supply agreement. The additional optional off-takewill be priced in alignment with the Company’s existing supply agreements. In order for ArcelorMittal to exercise this option and make the extension agreementeffective, ArcelorMittal must have 47Table of Contents beneficial ownership of more than 11.1 million shares of Company common stock on or prior to April 15, 2015. According to public filings, on January 25,2011, the boards of directors of ArcelorMittal S.A. and APERAM each approved the transfer of the assets comprising ArcelorMittal’s stainless and specialtysteels businesses from its carbon steel and mining businesses to APERAM, a separate entity incorporated in the Grand Duchy of Luxembourg. This transferincluded the off-take agreement the Company had in place with ArcelorMittal and the shares of the Company’s common stock previously owned byArcelorMittal. Additionally, on May 14, 2008, we entered into a molybdenum supply agreement with SeAH Besteel Corporation (“SeAH Besteel”), Korea’s largestmanufacturer of specialty steels, which provides for SeAH Besteel to purchase 4.0 million pounds of molybdenum per year, plus or minus 10%, once the Mt.Hope Project commences commercial operations at minimum specified levels. Like the ArcelorMittal supply agreement, the supply agreement with SeAHBesteel provides for a floor price along with staged discounts for spot prices above the floor price and expires five years from the date of first supply under theagreement. Both the floor and threshold levels at which the percentage discounts change are indexed to a producer price index. On August 8, 2008, the Company entered into a molybdenum supply agreement (“Sojitz Agreement”) with Sojitz Corporation (“Sojitz”). The SojitzAgreement provides for the supply of 5.0 million pounds per year of molybdenum for five years, beginning once the Mt. Hope Project reaches certainminimum commercial production levels. One million annual pounds sold under the Sojitz Agreement will be subject to a per-pound molybdenum floor priceand is offset by a flat discount to spot molybdenum prices above the floor. The remaining 4.0 million annual pounds sold under the Sojitz Agreement will besold with reference to spot molybdenum prices without regard to a floor price. The Sojitz Agreement includes a provision that allows Sojitz the option to cancelin the event that supply from the Mt. Hope Project has not begun by January 1, 2013. Based on our current development timeline, Sojitz will have the optionto cancel its contract or participate in the molybdenum supply agreement as described above. If Sojitz elects to cancel its contract with us, the supply of 5.0million pounds per year of molybdenum for five years will be assumed by Hanlong, pursuant to the terms of the Hanlong molybdenum supply agreementdescribed below. On March 4, 2010, the Company entered into a molybdenum supply agreement (“Hanlong Agreement”) with Hanlong. The Hanlong Agreementrequires Hanlong to purchase the Company’s entire share of the Mt. Hope molybdenum production above that necessary for the Company to meet its existingsupply commitments until the expiration of those commitments. After the expiration of the existing supply agreements, until the original scheduled maturitydate of the Term Loan, or if the Company elects not to enter into the Term Loan, 14 years after commencement of commercial production, Hanlong mustannually purchase the greater of 16 million pounds or 70% of the Company’s share of Mt. Hope production. Following the original scheduled maturity date ofthe Term Loan, or if the Company elects not to enter into the Term Loan, 14 years after commencement of commercial production from the Mt. Hope Mine,Hanlong must purchase a percentage of the Company’s share of Mt. Hope production equal to 2.5 times Hanlong’s fully diluted percentage ownership of ourcommon stock. Subject to certain exceptions, the Hanlong Agreement will terminate once Hanlong’s fully-diluted ownership percentage falls below 5%. Aslong as Hanlong continues to guarantee the Term Loan, the Hanlong Agreement will not terminate even if Hanlong’s ownership falls below 5%. If the cause ofHanlong’s ownership falling below 5% is a change of control of the Company or a dilutive transaction in which Hanlong does not have the right to participate,the Hanlong Agreement will not terminate and Hanlong will be obligated to continue to purchase a percentage of the Company’s share of Mt. Hope productionequal to 2.5 times Hanlong’s fully-diluted percentage ownership of the Company as it existed immediately prior to such change of control or dilutivetransaction. If the Company elects not to enter into the Term Loan, and the second loan tranche does not close, Hanlong’s obligation to purchase theCompany’s share of Mt. Hope production in each of the periods described above will be half of the obligations described above. The supply off-takeagreement provides for a floor price, along with a discount for spot prices above the floor price, for twenty-five percent of the production Hanlong receives. Theremaining 75% of the production Hanlong receives will be sold with reference to spot molybdenum prices less a small discount. All four long term supply agreements provide for supply only after commercial production levels are achieved, and no provisions require theCompany to deliver product or make any payments if commercial production is never achieved or declines, in later periods and have floor prices ranging from$14.00 to $15.00 per pound and incremental discounts above the floor price. The agreements require that monthly shortfalls be made up only if theCompany’s portion of Mt. Hope production is available for delivery, after POS-Minerals has taken its share. In no event do these requirements to make upmonthly shortfalls become obligations of the Company if production does not meet targeted levels. Furthermore, each of the agreements have take-or-pay provisions that require the buyers to either take delivery of product made available by theCompany, or to pay as though they had taken delivery pursuant to the term of the agreements. 48Table of Contents While we have not used derivative financial instruments in the past, we may elect to enter into derivative financial instruments to manage commodityprice risk. We have not entered into any market risk sensitive instruments for trading or speculative purposes and do not expect to enter into derivative orother financial instruments for trading or speculative purposes. Interest Rate Risk As of December 31, 2011, we had a balance of cash and cash equivalents of $40.7 million. Interest rates on short term, highly liquid investmentshave not changed materially since December 31, 2010, and continue to be 1% or less on an annualized basis. Our debt agreements have interest rates ofLIBOR plus a percentage. Any significant rise in the LIBOR rate during the course of our debt agreements may affect our ability to service the debt. 49Table of Contents ITEM 8. FINANCIAL STATEMENTS GENERAL MOLY, INC.(A Development Stage Company) CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2011 CONTENTS Report of Independent Registered Public Accounting Firm51 Financial Statements: Consolidated Balance Sheets as of December 31, 2011 and December 31, 201052 Consolidated Statements of Operations for the twelve months ended December 31, 2011, December 31, 2010 and December 31, 2009 and forthe period from inception of Exploration Stage until December 31, 201153 Consolidated Statements of Cash Flows for the twelve months ended December 31, 2011, December 31, 2010 and December 31, 2009 and forthe period from inception of Exploration Stage until December 31, 201154 Consolidated Statements of Equity as of December 31, 2011, December 31, 2010, December 31, 2009, December 31, 2008, and January 1,2002 (inception of Exploration Stage)56 Notes to Consolidated Financial Statements58 50Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of General Moly, Inc. In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, cash flows and equity presentfairly, in all material respects, the financial position of General Moly, Inc. and its subsidiaries (a development stage company) at December 31, 2011 and2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2011 and, cumulatively, for theperiod from January 1, 2002 (date of inception) to December 31, 2011 in conformity with accounting principles generally accepted in the United States ofAmerica. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011,based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO). The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control overfinancial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Item 9: Report of Management on internalcontrol over financial reporting. Our responsibility is to express opinions on these consolidated financial statements and on the Company’s Internal Controlover Financial Reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company AccountingOversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidatedfinancial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the consolidatedfinancial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statementpresentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessingthe risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Ouraudits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basisfor our opinions. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internalcontrol over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately andfairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding preventionor timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree ofcompliance with the policies or procedures may deteriorate. /s/PricewaterhouseCoopers LLP Denver, Colorado March 1, 2012 51Table of Contents GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED BALANCE SHEETS (In thousands, except par value amounts) December 31,2011December 31,2010ASSETS:CURRENT ASSETSCash and cash equivalents$40,709$53,571Deposits, prepaid expenses and other current assets105148Total Current Assets40,81453,719Mining properties, land and water rights — Note 4143,732133,093Deposits on project property, plant and equipment66,47468,363Restricted cash held for electricity transmission12,00512,005Restricted cash held for reclamation bonds1,1331,133Non-mining property and equipment, net8191,045Capitalized debt issuance costs3,136887Other assets2,9942,994TOTAL ASSETS$271,107$273,239LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST ANDEQUITY:CURRENT LIABILITIESAccounts payable and accrued liabilities$4,568$4,138Accrued advance royalties8,9509,500Accrued payments to Agricultural Sustainability Trust2,000—Current portion of long term debt10,596194Total Current Liabilities26,11413,832Provision for post closure reclamation and remediation costs587571Deferred gain1,150215Accrued advance royalties—8,950Accrued payments to Agricultural Sustainability Trust2,0004,000Long term debt, net of current portion13110,481Total Liabilities29,98238,049 COMMITMENTS AND CONTINGENCIES — Note 10 CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST98,07398,753 EQUITYCommon stock, $0.001 par value; 200,000,000 shares authorized, 90,818,248 and 85,353,473 shares issuedand outstanding, respectively9185Additional paid-in capital255,894234,517Accumulated deficit before exploration stage(213)(213)Accumulated deficit during exploration and development stage(112,720)(97,952)Total Equity143,052136,437TOTAL LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST ANDEQUITY$271,107$273,239 The accompanying notes are an integral part of these consolidated financial statements. 52Table of Contents GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Years EndedJanuary 1, 2002(Inception ofExploration Stage)December 31,2011December 31,2010December 31,2009toDecember 31,2011REVENUES$—$—$—$— OPERATING EXPENSES:Exploration and evaluation1,56862380639,701Writedowns of development and deposits3,4035,038—8,819General and administrative expense10,24810,9199,70369,775TOTAL OPERATING EXPENSES15,21916,58010,509118,295 LOSS FROM OPERATIONS(15,219)(16,580)(10,509)(118,295) OTHER INCOME/(EXPENSE):Interest and dividend income2113314,062Interest expense(250)(164)—(414)TOTAL OTHER (EXPENSE)/INCOME, NET(229)(151)313,648 LOSS BEFORE INCOME TAXES(15,448)(16,731)(10,478)(114,647) Income Taxes———— CONSOLIDATED NET LOSS$(15,448)$(16,731)$(10,478)$(114,647)Less: Net loss attributable to contingently redeemablenoncontrolling interest6801,0082391,927NET LOSS ATTRIBUTABLE TO GENERAL MOLY, INC.$(14,768)$(15,723)$(10,239)$(112,720)Basic and diluted net loss attributable to General Moly per shareof common stock$(0.16)$(0.22)$(0.14)Weighted average number of shares outstanding— basic anddiluted90,58872,98772,226 The accompanying notes are an integral part of these consolidated financial statements. 53Table of Contents GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Years EndedJanuary 1, 2002(Inception ofExploration Stage)December 31,2011December 31,2010December 31,2009toDecember 31,2011CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(15,448)$(16,731)$(10,478)$(114,647)Adjustments to reconcile net loss to net cash used by operatingactivities:Services and expenses paid with common stock———1,990Repricing of warrants—965—965Writedowns of development and deposits3,4035,0383788,819Depreciation and amortization4123353441,644Interest expense250164—414Equity compensation for employees and directors1,7131,6411,47416,812Decrease (increase) in deposits, prepaid expenses and other4331147(13)Decrease (increase) in restricted cash held for electricitytransmission—281259(12,005)(Decrease) increase in accounts payable and accrued liabilities(10,761)93(3,305)(7,303)Increase (decrease) in post closure reclamation and remediationcosts16(15)(145)378Net cash used by operating activities(20,372)(8,198)(11,326)(102,946) CASH FLOWS FROM INVESTING ACTIVITIES:Payments for the purchase of equipment—(124)(100)(1,548)Purchase of securities———(137)Purchase and development of mining properties, land andwater rights(10,567)(14,074)(20,879)(119,274)Deposits/refunds on property, plant and equipment177(25,058)(11,527)(67,907)Proceeds from option to purchase agreement9351151001,150Increase in restricted cash held for reclamation bonds———(642)Cash provided by sale of marketable securities———246Net cash used by investing activities(9,455)(39,141)(32,406)(188,112) 54Table of Contents GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Years EndedJanuary 1, 2002(Inception ofExploration Stage)December 31,2011December 31,2010December 31,2009toDecember 31,2011CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of stock, net of issuance costs19,41243,10399227,719Proceeds from debt—10,000—10,000Cash proceeds from POS-Minerals Corp.———100,000Cash paid to POS-Minerals Corp. for purchase priceadjustment———(2,994)Decrease in restricted cash — EMLLC——13,915—(Decrease) increase in leased assets, net(198)80(130)132(Increase) in capitalized debt issuance costs(2,249)(887)—(3,136)Net cash provided by financing activities:16,96552,29613,884331,721(Decrease) increase in cash and cash equivalents, net(12,862)(4,957)(29,848)40,663Cash and cash equivalents, beginning of period53,57148,61478,46246Cash and cash equivalents, end of period$40,709$53,571$48,614$40,709 NON-CASH INVESTING AND FINANCING ACTIVITIES:Equity compensation capitalized as development$258$1,121$950$6,458Restricted cash held for reclamation bond acquired in anacquisition———491Post closure reclamation and remediation costs and accountspayable assumed in an acquisition———263Common stock and warrants issued for property andequipment———1,586Accrued portion of deposits on property, plant and equipment1,691657—1,691Accrued portion of advance royalties—18,450—8,950Accrued portion of payments to the Agricultural SustainabilityTrust—4,000—4,000 The accompanying notes are an integral part of these consolidated financial statements 55Table of Contents GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF EQUITY (In thousands, except number of shares and per share amounts) Common SharesAmountAdditionalPaid-In CapitalAccumulatedOtherComprehensiveIncome (Loss)AccumulatedDeficitTotalBalance, January 1, 20023,140,469$4$442$(2)$(213)$231Issuance of Units of CommonStockFor directors’ fees460,000—79——79For cash at $8.50 per share8,256,699870,174——70,182Purchase options for managementand administrative fees——11——11For services, administration,mineral rights, water rightsand expenses at between $0.11and $6.15 per share1,127,379—1,739——1,739For exercise of warrants for cash435,000—348——348Issuance of Units of CommonStock and Warrants:For expenses and property atbetween $0.40 and $1.46 perunit1,400,00021,635——1,637For cash at between $0.15 and$3.40 per unit34,404,3653462,360——62,394Units and warrants for findersfee170,550—2,042——2,042Cost of offerings including cashcosts of $3,783——(5,815)——(5,815)Stock Options:Exercised between $0.11 and$6.93 per share3,501,46341,669——1,673Cashless exercise of stockoptions1,648,6472(2)———Issued pursuant to stock awards831,3472(38)——(36)Returned due to pricing errors onstock option exercise(38,998)—————Stock based compensation——15,932——15,932Stock Warrants:Issued for services at $1.07 perwarrant——80——80Exercised between $0.40 and$5.20 per share14,537,2671434,026——34,040Cashless exercise of warrants1,978,4582(2)———Unrealized Losses on marketablesecurities———2—2Additional paid in capital fromshareholder——499——499Net loss for the years endedDecember 31, 2002 through 2008————(71,990)(71,990)Balances, December 31, 200871,852,64672185,179—(72,203)113,048 56Table of Contents GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF EQUITY (In thousands, except number of shares and per share amounts) Common SharesAmountAdditionalPaid-In CapitalAccumulatedOtherComprehensiveIncome (Loss)AccumulatedDeficitTotalIssuance of Units of CommonStock :Issued pursuant to stock awards484,892—————Stock Options:Exercised between $0.44 and$2.10 per share100,000—100——100Stock based compensation——2,011——2,011Net loss for the year endedDecember 31, 2009————(10,239)(10,239)Balances, December 31, 200972,437,53872187,290—(82,442)104,920Stock Warrants:Exercised at $3.75 per share812,50013,046——3,047Cashless exercise of warrants59,770—————Repricing of warrants——965——965Stock Options:Exercised at $2.80 per share20,000—57——57Cashless exercise of options24,074—————Stock based compensation——2,723——2,723Issuance of Units of CommonStock :Issued for cash at $3.38 per share11,843,3411239,988——40,000Issued pursuant to stock awards156,250—448——448Net loss for the year endedDecember 31, 2010————(15,723)(15,723)Balances, December 31, 201085,353,47385234,517—(98,165)136,437Stock Warrants:Exercised between $3.66 and$3.75 per share5,183,209519,050——19,055Cashless exercise of warrants24,547—————Stock Options:Exercised at $2.80 per share133,333—357——357Stock based compensation——1,971——1,971Stock Appreciation Rights:Exercised between $0.96 and$4.35 per share53,511—————Issuance of Units of CommonStock :Issued pursuant to stock awards70,1751(1)———Net loss for the year endedDecember 31, 2010————(14,768)(14,768)Balances, December 31, 201190,818,248$91$255,894$—$(112,933)$143,052 The accompanying notes are an integral part of these consolidated financial statements. 57Table of Contents GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 — DESCRIPTION OF BUSINESS General Moly, Inc. (“we,” “us,” “our,” “Company,” or “General Moly”) is a Delaware corporation originally incorporated as General MinesCorporation on November 23, 1925. We have gone through several name changes and on October 5, 2007, we reincorporated in the State of Delaware(“Reincorporation”) through a merger involving Idaho General Mines, Inc. and General Moly, Inc., a Delaware corporation that was a wholly owned subsidiaryof Idaho General Mines, Inc. The Reincorporation was effected by merging Idaho General Mines, Inc. with and into General Moly, with General Moly being thesurviving entity. For purposes of the Company’s reporting status with the United States Securities and Exchange Commission (“SEC”), General Moly isdeemed a successor to Idaho General Mines, Inc. We were in the exploration stage from January 1, 2002 until October 4, 2007, when our Board of Directors (“Board”) approved the development ofthe Mt. Hope molybdenum property (“Mt. Hope Project”) in Eureka County, Nevada. The Company is now in the development stage and is currentlyproceeding with the development of the Mt. Hope Project. We are also conducting exploration and evaluation activities on our Liberty molybdenum property(“Liberty Property”) in Nye County, Nevada. The Mt. Hope Project. From October 2005 to January 2008, we owned the rights to 100% of the Mt. Hope Project. Effective as of January 1,2008, we contributed all of our interest in the assets related to the Mt. Hope Project, including our lease of the Mt. Hope Project into a newly formed entity,Eureka Moly, LLC, a Delaware limited liability company (“LLC”), and in February 2008 (“Closing Date”) entered into an agreement (“LLC Agreement”) forthe development and operation of the Mt. Hope Project with POS-Minerals Corporation (“POS-Minerals”) an affiliate of POSCO, a large Korean steelcompany. Under the LLC Agreement, POS-Minerals owns a 20% interest in the LLC and General Moly, through a wholly-owned subsidiary, owns an 80%interest. The ownership interests and/or required contributions under the LLC Agreement can change as discussed below. Pursuant to the terms of the LLC Agreement, POS-Minerals made its first and second cash contributions to the LLC totaling $100.0 million duringthe year ended December 31, 2008 (“Initial Contributions”). Additional amounts will be due from POS-Minerals within 15 days after the date (“RODContribution Date”) that specified conditions (“ROD Contribution Conditions”) have been satisfied. The ROD Contribution Conditions are (i) the receipt ofmajor operating permits for the Mt. Hope Project, (ii) confirmation that the Record of Decision (“ROD”) from the United States Bureau of Land Management(“BLM”) for the Mt. Hope Project has become effective, and (iii) any administrative or judicial appeals with respect thereto are final. We are currently targetingthe effective date of the ROD and the satisfaction of the other ROD Contribution Conditions to occur six to nine months after publication of the DraftEnvironmental Impact Statement (“DEIS”) in the Federal Register, which occurred on December 2, 2011. However, circumstances beyond our control,including reviewing agency delays or requests for additional information or studies, and requests for review or appeals of the BLM decision, could cause theeffectiveness of the ROD and/or the satisfaction of the other ROD Contribution Conditions to be delayed. Once the ROD is effective and financing is in place,we expect that commercial production will begin approximately 20 months following initiation of project construction. To maintain its 20% interest in the LLC, POS-Minerals will be required to make an additional $56.0 million contribution plus its 20% share of allMt. Hope Project costs incurred from the Closing Date to the ROD Contribution Date within 15 days after the ROD Contribution Date. If POS-Minerals doesnot make its additional $56.0 million contribution when due after the ROD Contribution Date, its interest will be reduced to 10%. In addition, as commercial production at the Mt. Hope Project was not achieved by December 31, 2011, the LLC may be required to return to POS-Minerals $36.0 million of its contributions to the LLC, with no corresponding reduction in POS-Minerals’ ownership percentage. Based on our current planand assuming POS-Minerals has made its additional $56.0 million contribution within 15 days after the ROD Contribution Date, a payment to POS-Minerals of $36.0 million will be due 20 days after the commencement of commercial production, as defined in the LLC Agreement. We currently anticipatesuch payment being made during 2014. If POS-Minerals does not make its additional $56.0 million contribution when due, no return of contributions isrequired by us. Our wholly-owned subsidiary and 80% owner of the LLC, Nevada Moly, LLC (“Nevada Moly”), is obligated under the terms of the LLCAgreement to make capital contributions to fund the return of contributions to POS-Minerals, if required. If Nevada Moly does not make these capitalcontributions, POS-Minerals has an election to either make a secured loan to the LLC to fund the return of contributions, or receive an additional interest in the 58Table of Contents LLC of approximately 5%. In the latter case, our interest in the LLC is subject to dilution by a percentage equal to the ratio of 1.5 times the amount of theunpaid contributions over the aggregate amount of deemed capital contributions (as determined under the LLC Agreement) of both parties to the LLC (“DilutionFormula”). At December 31, 2010, the aggregate amount of deemed capital contributions of both parties was $880.0 million. Furthermore, the LLC Agreement permits POS-Minerals to put its interest in the LLC to Nevada Moly after a change of control of Nevada Moly orthe Company, as defined in the LLC Agreement, followed by a failure to use standard mining industry practice in connection with development and operationof the Mt. Hope Project as contemplated by the parties for a period of twelve consecutive months. If POS-Minerals puts its interest, Nevada Moly or itstransferee or surviving entity would be required to purchase the interest for 120% of POS-Minerals’ contributions to the LLC plus 10% interest per annum. The Initial Contributions of $100.0 million that were made by POS-Minerals during 2008 were expended by the second quarter of 2009 in accordancewith the program and budget requirements of the Mt. Hope Project. Nevada Moly is required, pursuant to the terms of the LLC Agreement, to advance fundsrequired to pay costs for the development of the Mt. Hope Project that exceed the Initial Contributions until the ROD Contribution Date, at which point thecontributions described above to be made by POS-Minerals will be applied to reimburse us for POS-Minerals’ share of such development costs. All costsincurred after the ROD Contribution Date will be allocated and funded pro rata based on each party’s ownership interest. POS-Minerals’ share of suchdevelopment costs amounted to approximately $37.5 million as of December 31, 2011. The interest of a party in the LLC that does not make its pro ratacapital contributions to fund costs incurred after the ROD Contribution Date is subject to dilution based on the Dilution Formula. NOTE 2 — LIQUIDITY AND CAPITAL REQUIREMENTS AND RESTRUCTURING Our consolidated cash balance at December 31, 2011, was $40.7 million compared to $53.6 million at December 31, 2010. The cash needs for thedevelopment of the Mt. Hope Project require that we and/or the LLC finalize the financing described below in addition to the capital contributions to be receivedfrom POS-Minerals. The anticipated sources of financing described below, combined with funds anticipated to be received from POS-Minerals in order to retain its 20%share, provide substantially all of our currently planned funding required for constructing and placing the Mt. Hope Project into commercial production. Funding requirements for working capital and potential capital overrun needs will require additional resources. There can be no assurance that the Companywill be successful in raising additional financing in the future on terms acceptable to the Company or at all. Agreements with Hanlong (USA) Mining Investment Inc. We have signed a series of agreements (the “Hanlong Transaction”) with Hanlong (USA) Mining Investment, Inc. (“Hanlong”), an affiliate ofSichuan Hanlong Group, a large privately held Chinese company. The agreements described below form the basis of a $745 million transaction that isintended to provide the Company with adequate capital to develop the Mt. Hope Project. The agreements include: (a) a Securities Purchase Agreement thatprovides for the sale to Hanlong of shares of our common stock in two tranches that will aggregate 25% of our outstanding stock on a fully diluted basis for$80 million ($40 million per tranche), conditioned upon us receiving permits for Mt. Hope and Hanlong’s use of commercially reasonable efforts to procure a$665 million loan from a Prime Chinese Bank for our use in constructing Mt. Hope; (b) a Bridge Loan whereby Hanlong will provide up to $20 million tothe Company to preserve liquidity until permits are received; (c) a Stockholder Agreement that provides Hanlong representation on our Board of Directors andthe LLC management committee, governs how Hanlong will vote its shares of the Company and limits Hanlong’s ability to purchase or dispose of oursecurities; and (d) a long-term molybdenum supply off-take agreement. The Securities Purchase Agreement (“Purchase Agreement”) Stock Purchase. The Purchase Agreement provides, subject to its terms and conditions, for the purchase by Hanlong of $80.0 million of ourcommon stock, or approximately 27.6 million shares, which will equal 25% of our outstanding common stock on a fully-diluted basis. The Purchase Agreement has been amended four times including: (1) a July 30, 2010 amendment extending the deadline for obtaining Chinesegovernment approvals by two months to October 13, 2010, as well as extending the Company’s deadline for publishing its DEIS and receiving its ROD toFebruary 28, 2011, and November 30, 2011, respectively. Hanlong has received Chinese government approvals for its equity investment in us and our DEIShas been published; (2) an October 26, 2010 amendment setting the closing of Hanlong’s purchase of the first $40.0 million tranche of 59Table of Contents equity for December 20, 2010 and eliminating the condition that required us to have our DEIS published prior to closing this funding; (3) a December 20,2010 amendment that made certain non-substantive changes in connection with the Tranche 1 closing; and (4) a July 7, 2011 amendment that eliminated thedeadline for publication of the DEIS, extended the ROD deadline from November 30, 2011 to the earlier of nine months following DEIS publication orSeptember 30, 2012, extended Hanlong’s commitment to make available the Term Loan from two months following the ROD to nine months following theROD, and extended the maturity date of the Bridge Loan to the earlier of (i) 270 days after the issuance of the ROD, (ii) the date on which the PurchaseAgreement terminates, and (iii) the earlier of December 31, 2012 and the availability of the Term Loan. The ROD deadline is extendable by up to three months to December 31, 2012, as discussed below. The Purchase Agreement may be terminated byeither party (provided the terminating party is not in default) if the closing of the second tranche (“Tranche 2”) has not occurred on or before the earlier ofSeptember 30, 2012 (unless the parties have agreed to the ROD Condition Extension date of December 31, 2012) or twelve months after the issuance of theROD. As discussed above, the second tranche will be for a purchase price of an additional $40.0 million. Significant conditions to the closing ofTranche 2 include issuance of the ROD for the Mt. Hope Project by the BLM, approval of the plan of operations for the Mt. Hope Project (the “POO”) by theBLM, and the completion of documentation for and satisfaction of conditions precedent for the availability of funding under the Term Loan, described below. Hanlong will have the right to purchase a portion of any additional shares of common stock that we issue so that it can maintain its percentageownership, unless its ownership is at the time below 5% at the earlier of the closing of Tranche 2 or closing of the Term Loan. It may also acquire additionalshares so that it maintains a 20% indirect interest in the Mt. Hope Project if our interest in the LLC is reduced below 80%. If we issue shares to fund theMt. Hope Project under certain circumstances, and on or before the date of commercial production, and Hanlong exercises its rights to maintain its percentageinterest, we will be obligated to refund to Hanlong the cost of such shares over a three-year period up to an aggregate of $9.0 million. Break Fees. A break fee is payable by both the Company and Hanlong if the Purchase Agreement terminates because of the failure of certainconditions. A break fee of $10.0 million is payable to the Company if the Purchase Agreement is terminated because Hanlong fails to obtain necessary Chinesegovernment approvals, which may be offset against any balances owed by the Company under the Bridge Loan. A break fee of $5.0 million is payable toHanlong if the ROD is not timely received or the condition waived and the Purchase Agreement is terminated. The Company’s break fee may be increased by$5.0 million if the Purchase Agreement is terminated and the Company has violated the “no-shop” provisions of the Purchase Agreement. The break fees mayalso be increased by up to $2.0 million if the Company requests and Hanlong grants an extension concerning the ROD (the “Extension Fee”). Any such feewill be credited against the arrangement fee described below. The break fee payable by the Company to Hanlong may be paid in cash, or, in certaincircumstances, in shares of our common stock at our option. If paid in shares, the price would be the volume weighted average of our common stock on theNYSE Amex for the five days ending six days after the announcement of the termination. On January 9, 2012, the Company and Hanlong executed an optionagreement concerning the Purchase Agreement for no consideration. The option must be exercised on or before December 31, 2012. If the option is exercised,the parties will amend the Purchase Agreement to extend payment of the Extension Fee from December 2012 until April 30, 2013. Chinese Bank Term Loan. Hanlong is obligated to use commercially reasonable efforts to procure a Term Loan in an amount of at least$665.0 million with a term of at least 14 years after commercial production begins at the Mt. Hope Project. The Term Loan will bear interest at a rate tied tothe London Interbank Offered Rate (“LIBOR”) plus a spread of between 2% and 4% per annum. The Purchase Agreement provides that the Term Loan willhave customary covenants and conditions; however, the terms of the Term Loan have not yet been negotiated with the lender and we have no assurance as tothe final terms of the Term Loan. On February 16, 2012, the Company announced China Development Bank (“CDB”) had confirmed the basic termsunderlying a proposed $665 million term loan to finance the Mt. Hope project, including a CDB commitment to lend $399 million and arrange a consortiumof Chinese and international banks to fund the balance. The term loan is anticipated to carry a maturity of 12 years including a 30 month grace period toallow for the construction of the Mt. Hope project. The interest rate will remain subject to market conditions and Chinese government policy.. The Companyand Hanlong are continuing to work with CDB with a target of having the loan completed, approved and available to the Company upon receipt of Mt. Hope’soperating permits. Hanlong or an affiliate is obligated to guarantee the Term Loan. When funds can be drawn by the Company under the Term Loan, theCompany will pay a $15.0 million arrangement fee to Hanlong who will pay fees and expenses associated with the Term Loan before the Term Loan Closing,including those charged by the Chinese bank. 60Table of Contents Bridge Loan Hanlong agreed to provide a $20.0 million Bridge Loan to the Company, available in two equal $10.0 million tranches. On April 28, 2010, we drewdown the first $10.0 million tranche. The second tranche became available after receiving stockholder approval of the Hanlong Transaction. The first trancheof the Bridge Loan bears interest at LIBOR plus 2% per annum. The second tranche of the Bridge Loan will bear interest at 10% per annum and is undrawn. The Bridge Loan will be repaid from the proceeds of the Term Loan. The second tranche may also be repaid at the Company’s election, in shares of theCompany’s common stock. If paid in shares, the price would be the volume weighted average of the Company’s shares on the NYSE Amex for a five-dayperiod after public announcement of the event that required repayment. The Company may offset its right to receive the break fee against its obligations torepay borrowings under the Bridge Loan. On January 9, 2012, the Company and Hanlong executed an option agreement concerning the Bridge LoanAgreement. If exercised, the parties will amend the Bridge Loan Agreement for no consideration to extend the maturity date of Bridge Loan from December 31,2012 until April 30, 2013. The option also has the effect of potentially extending the availability of the undrawn $10.0 million second tranche to April 30,2013 since the availability of the second tranche ends the earliest of the Tranche 2 closing date, the maturity of the Bridge Loan and the first borrowing underthe Term Loan. The outstanding balance of the Bridge Loan and related accrued interest are recorded as a current liability as of December 31, 2011 as the Companyanticipates the Term Loan will become available within the next twelve months. The Bridge Loan and our obligation to pay a break fee to Hanlong under thePurchase Agreement are secured by a pledge by us of a 10% interest in the LLC. Stockholder Agreement In connection with Hanlong’s purchase of our shares, Hanlong signed a Stockholder Agreement with the Company that limits Hanlong’s futureacquisitions of our common stock, provides for designation of up to two directors to our Board and representation on the LLC management committee, andplaces some restrictions on Hanlong’s voting and disposition of our shares. After the Tranche 1 closing, Hanlong became entitled to nominate one director to serve on our Board and one representative to the LLC managementcommittee. Nelson Chen currently serves in both of these capacities. After the Tranche 2 closing, Hanlong will be entitled to nominate a second director. TheCompany will include and recommend the election of Hanlong’s nominees in the Board’s slate of nominees submitted to our stockholders, subject to theBoard’s fiduciary obligations and compliance by the nominee with applicable law and Company requirements concerning disclosure of information. TheHanlong nominees may also serve on committees for which they are eligible. Hanlong has agreed not to purchase additional shares, except as permitted by the Purchase Agreement, without the Company’s prior consent, andhas agreed that it will not solicit proxies, join a group with respect to our equity securities, solicit or encourage an offer from another person for the Company,call a meeting of the Company’s stockholders or make a proposal to the Company’s stockholders, except to the Board. If our Board receives an offer for theCompany, for its assets or a merger that the Board determines is in the best interests of the Company’s stockholders, Hanlong is required to vote in favor ofsuch a transaction or tender its shares unless it proposes an alternative transaction that our Board determines is more favorable to our stockholders than theoffer received. Hanlong may not, without the prior written consent of the Board, transfer ownership of their securities if the recipient would acquire beneficialownership of more than 5% of our common stock as of the date of such transfer. The restrictions on Hanlong’s share ownership, voting, disposition anddrag-along rights will terminate on the earlier of the time that Hanlong owns less than 10% of our common stock, the date that is 6 months after the date thatcommercial production begins at the Mt. Hope Project, and June 30, 2014. Cash Conservation Plan The Company continues to operate under a cash conservation plan implemented in March 2009 designed to reduce expenditures and conserve cash inorder to maximize financial flexibility. We are now emerging out of cash conservation with the initiation of a soft start of engineering and procurement inJanuary 2012. The Company had purchase orders for mining and milling process equipment. Some orders for mining equipment were cancelled, while orders forelectric shovels and haul trucks were modified to become cancellable or non-binding. Most equipment orders for the custom-built grinding and other millingprocess equipment are being completed by the manufacturers and the equipment is being stored. The grinding and milling process equipment required thelongest lead 61Table of Contents times and maintaining these orders was critical to the Company’s ability to rapidly restart the Mt. Hope Project development. The Company completednegotiations with other equipment manufacturers to suspend or terminate fabrication of other milling equipment. As funding becomes available and equipmentprocurement is restarted, agreements that were suspended or terminated will be renegotiated under new market terms and conditions, as necessary. Based on our current plan, expected timetable, and the results of such negotiations, we expect to make additional payments on milling processequipment orders of approximately $3.7 million in 2012 and $13.0 million in 2013. Based on payments made in 2009, 2010, and 2011 and the finalpayments to be made in 2012 and early 2013 for the gyratory crusher, SAG and ball mills and related electric mill drives, and some other long-leadequipment, we will own this equipment. Also, at December 31, 2011, we have a contract to purchase two electric shovels that is cancellable, has no firmschedule of payments, and includes a $3.4 million deposit that is forfeitable if an additional $13.0 million deposit is not made by June 30, 2012. The LLCcontinues to need this equipment for construction phase mine development and post-construction mining, and is committed to either renegotiate the timing andamount of the contractual deposit terms to provide more payment flexibility or obtaining additional funding sources in order to make this payment withoutimpacting our liquidity position. On February 28, the LLC issued a firm purchase order for 18 haul trucks to Cashman Equipment Company, the Nevada-based dealer forCaterpillar. The order provides for delivery of those haul trucks required to perform initial mine development, currently scheduled for the second half of2013. A non-refundable down-payment of $0.6 million was made at the time of order with an additional $0.6 million due 12 months prior to truck shipment,but the contract is cancellable with no further liability to the LLC up until the time of truck shipment. An additional 6 haul trucks are not required until afterthe commencement of commercial production, and will be ordered at a future date. The cash conservation plan has reduced our total cash utilization for general administrative and overhead expenses to approximately $1 million permonth, inclusive of maintenance costs at the Liberty Property. Such ongoing costs, combined with the $3.7 million in process equipment commitments notedabove and the $9.0 million in construction royalty advances described in Note 10 comprise the spending requirements the Company has in place through theend of 2012 without restarting the project. Based on our current cash on hand and this ongoing cash conservation plan, the Company expects it will haveadequate liquidity through the restart of the project and execution of the financing plan. NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies is presented to assist in understanding the financial statements. The financial statements and notesare representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accountingprinciples generally accepted in the United States of America (“GAAP”) and have been consistently applied in the preparation of the financial statements. Accounting Method Our financial statements are prepared using the accrual basis of accounting in accordance with GAAP. With the exception of the LLC, all of oursubsidiaries are wholly owned. In February 2008, we entered into the agreement, which established our ownership interest in the LLC at 80%. Theconsolidated financial statements include all of our wholly owned subsidiaries and the LLC. The POS-Minerals contributions attributable to their 20% interestare shown as Contingently Redeemable Noncontrolling Interest on the Consolidated Balance Sheet. For the years presented , the LLC had net operatingexpenses and, accordingly, the net loss attributable to contingently redeemable noncontrolling interest is reflected separately on the Consolidated Statement ofOperations. Reclassification of Prior Period Amounts Certain prior period amounts have been reclassified to conform to the current period presentation. Contingently Redeemable Noncontrolling Interest (“CRNCI”) On January 1, 2009, we adopted Financial Accounting Standards Board (“FASB”) authoritative guidance related to Noncontrolling Interests inConsolidated Financial Statements, the provisions of which, among others, require the recognition of a noncontrolling interest (previously referred to asminority interest), as a component of equity in the consolidated financial statements and separate from the parent’s equity for all periods presented. Inaddition, the amount of net income or loss attributable to the noncontrolling interest is included in net income or loss on the face of the consolidated statementof operations. Under GAAP, certain noncontrolling interests in consolidated entities meet the definition of mandatorily redeemable financial instruments if theability to redeem the interest is outside of the control of the consolidating entity. As 62Table of Contents described in Note 1, the LLC Agreement permits POS-Minerals the option to put its interest in the LLC to Nevada Moly upon a change of control, as definedin the LLC Agreement, followed by a failure to use standard mining industry practice in connection with development and operation of the Mt. Hope Project ascontemplated by the parties for a period of twelve consecutive months. As such, the CRNCI has continued to be shown as a separate caption betweenliabilities and equity (mezzanine section). The carrying value of the CRNCI reflects the investment of the noncontrolling interest, less losses attributable to theinterest. Estimates The process of preparing consolidated financial statements requires the use of estimates and assumptions regarding certain types of assets, liabilities,revenues, and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, uponsettlement, actual results may differ from estimated amounts. Cash and Cash Equivalents We consider all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company’s cash equivalentinstruments are classified within Level 1 of the fair value hierarchy established by FASB guidance for Fair Value Measurements because they are valued basedon quoted market prices in active markets. Exploration and Development Stage Activities We were in the exploration stage from January 2002 until October 4, 2007. On October 4, 2007, our Board approved the development of the Mt. HopeProject as contemplated in the Bankable Feasibility Study (“BFS”) and we then entered into the development stage. We have not realized any revenue fromoperations. We will be primarily engaged in development of the Mt. Hope Project and exploration and evaluation of the Liberty Property until we enter theproduction stage of the Mt. Hope Project. Basic and Diluted Net Loss Per Share Net loss per share was computed by dividing the net loss attributable to General Moly, Inc. by the weighted average number of shares outstandingduring the period. The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount oftime that they were outstanding. Outstanding warrants to purchase 1,000,000, 6,263,209 and 7,455,434 shares of common stock, options to purchase2,484,990, 2,658,323 and 3,071,656 shares of common stock, and unvested stock awards totaling 615,763, 421,726 and 217,694 at December 31,2011, 2010 and 2009, respectively, and 1,290,499 and 912,461 and 36,349 shares under Stock Appreciation Rights (“SARs”) at December 31, 2011,2010, and 2009 respectively, were not included in the computation of diluted loss per share for the years ended December 31, 2011, 2010 and 2009,respectively, because to do so would have been anti-dilutive. Therefore, basic loss per share is the same as diluted loss per share. Mineral Exploration and Development Costs All exploration expenditures are expensed as incurred. Significant property acquisition payments for active exploration properties are capitalized. Ifno economic ore body is discovered, previously capitalized costs are expensed in the period the property is abandoned. Expenditures to develop new mines, todefine further mineralization in existing ore bodies, and to expand the capacity of operating mines, are capitalized and amortized on a units-of-production basisover proven and probable reserves. Should a property be abandoned, its capitalized costs are charged to operations. The Company charges to the consolidated statement of operationsthe allocable portion of capitalized costs attributable to properties sold. Capitalized costs are allocated to properties sold based on the proportion of claims soldto the claims remaining within the project area. Mining Properties, Land and Water Rights Costs of acquiring and developing mining properties, land and water rights are capitalized as appropriate by project area. Exploration and relatedcosts and costs to maintain mining properties, land and water rights are expensed as incurred while the property is in the exploration and evaluation stage. Development and related costs and costs to maintain mining properties, land and water rights are capitalized as incurred while the property is in thedevelopment stage. When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production basis over provenand 63Table of Contents probable reserves. Mining properties, land and water rights are periodically assessed for impairment of value, and any subsequent losses are charged tooperations at the time of impairment. If a property is abandoned or sold, a gain or loss is recognized and included in the consolidated statement of operations. Depreciation and Amortization Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Property andequipment are depreciated using the following estimated useful lives: field equipment — four to ten years; office furniture, fixtures; and equipment — five toseven years; vehicles — three to five years; leasehold improvements — three years or the term of the lease, whichever is shorter; residential trailers — ten totwenty years; and buildings and improvements — ten to twenty seven and one-half years. At December 31, 2011 and 2010, accumulated depreciation andamortization was $1.4 and $1.0 million, respectively, of which $1.1 and $0.7 million, respectively, was capitalized. Provision for Taxes Income taxes are provided based upon the asset and liability method of accounting. Under this approach, deferred income taxes are recorded to reflectthe tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. Inaccordance with authoritative guidance for Income Taxes, a valuation allowance is recorded against the deferred tax asset if management does not believe theCompany has met the “more likely than not” standard to allow recognition of such an asset. Reclamation and Remediation Expenditures for ongoing compliance with environmental regulations that relate to current operations are expensed or capitalized as appropriate. Expenditures resulting from the remediation of existing conditions caused by past operations that do not contribute to future revenue generation are expensed. Liabilities are recognized when environmental assessments indicate that remediation efforts are probable and the costs can be reasonably estimated. Estimates of such liabilities are based upon currently available facts, existing technology and presently enacted laws and regulations taking into considerationthe likely effects of inflation and other societal and economic factors, and include estimates of associated legal costs. These amounts also reflect priorexperience in remediating contaminated sites, other companies’ clean-up experience and data released by the United States Environmental Protection Agency(“EPA”) or other organizations. Such estimates are by their nature imprecise and can be expected to be revised over time because of changes in governmentregulations, operations, technology and inflation. Recoveries are evaluated separately from the liability. When recovery is assured, the Company records andreports an asset separately from the associated liability. Stock-based Compensation Stock-based compensation represents the fair value related to stock-based awards granted to members of the board of directors, officers andemployees. The Company uses the Black-Scholes model to determine the fair value of stock-based awards under authoritative guidance for Stock-BasedCompensation. For stock based compensation that is earned upon the satisfaction of a service condition, the cost is recognized on a straight-line basis (net ofestimated forfeitures) over the requisite vesting period (up to three years). Awards expire five years from the date of vesting. Further information regarding stock-based compensation can be found in Note 7 — “Equity Incentives.” Debt Issuance Costs The Company has capitalized certain costs such as translation, formatting and technical due diligence and related legal fees in the amount of $3.1million incurred in direct pursuit of the Term Loan based on our belief that it is more probable than not that the Company will receive the Term Loan. Aportion of these costs were incurred on behalf of Hanlong and will be offset against the $15.0 million arrangement fee to be paid by the Company to Hanlongupon the closing of the Term Loan. These costs will be amortized over the life of the Term Loan using the effective interest method once the Term Loan hasbeen made available. 64Table of Contents Comprehensive Loss For the years ended December 31, 2011, 2010 and 2009, respectively, the Company’s comprehensive loss was equal to the respective net loss foreach of the years presented. Recently Issued Accounting Pronouncements Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP andIFRS In May 2011, the FASB issued Accounting Standards Update (ASU) 2011-04, Amendments to Achieve Common Fair Value Measurement andDisclosure Requirements in U.S. GAAP and IFRS. The Update amends fair value measurements and disclosures to (1) clarify the board’s intent in respect ofexisting measurement guidance, (2) revise certain measurement guidance that changes or modifies a principle, and (3) add disclosure requirements concerningthe measurement uncertainty of level 3 measurements. This guidance is effective for the Company for the first interim or annual period beginning on or afterDecember 15, 2011. The Company does not anticipate this guidance having a material effect on its financial condition, results of operation, or cash flows. Comprehensive Income (Topic 220): Presentation of Comprehensive Income In June 2011, the FASB issued Accounting Standards Update (ASU) 2011-02, Comprehensive Income (Topic 220): Presentation of ComprehensiveIncome. Under the amendments, an entity has the option to present the total of comprehensive income, the components of net income, and the components ofother comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This guidance iseffective for the Company for the fiscal year beginning after December 15, 2011. The Company does not anticipate this guidance having a material effect onits financial condition, results of operation, or cash flows. NOTE 4 — MINING PROPERTIES, LAND AND WATER RIGHTS We currently have interests in two mining properties that are the primary focus of our operations. The Mt. Hope Project is currently in thedevelopment stage and the Liberty Property is in the exploration and evaluation stage. We also have certain other, non-core, mining properties that are beingevaluated for future evaluation or sale. The Mt. Hope Project. We are currently in the process of developing the Mt. Hope Project. In November 2004, we entered into an option to lease allproperty and assets of the Mt. Hope Molybdenum Property from Mt. Hope Mines, Inc. (“MHMI”) and in October 2005 exercised our rights under the option. The lease was further amended in November 2007. The renewable lease allows us to proceed for the next 30 years with permitting, developing and mining thedeposit and for so long thereafter as we maintain an active operation. In 2004, we paid $0.5 million and issued 500,000 shares of common stock withwarrants to purchase 500,000 shares of common stock for the Mt. Hope option. Pursuant to the terms of the lease, as amended, the underlying total royalty on production payable to MHMI, less certain deductions, is three andone-half percent for a molybdenum price up to $12 per pound, four and one-half percent for a molybdenum price up to $15 per pound, and five percent for amolybdenum price above $15 per pound (“Production Royalties”). The LLC is subject to certain periodic payments as set forth in Note 10 “Commitmentsand Contingencies.” Additionally, the LLC is obligated to pay Exxon Mineral Company a one percent net smelter royalty on all production. During the year ended December 31, 2006, we purchased deeded land, which included certain BLM grazing rights, certain water rights and variousother assets. The primary purpose for these purchases was to acquire land and water rights for use by the Mt. Hope Project. We paid $2.3 million cash forthese purchases. During the year ended December 31, 2007, we purchased land, water rights and various personal property for cash of $4.6 million and67,000 shares of common stock valued at $0.4 million. The primary purpose of these purchases was to acquire additional land and water rights for the Mt.Hope Project. In August 2007, the Company completed a BFS on the Mt. Hope Project, which provided data on the viability and expected economics of the project. Based on the findings in the study, on a 100% basis, we reported 1.3 billion pounds of contained (1.1 billion pounds recoverable) molybdenum in proven andprobable reserves. 65Table of Contents In October 2007, our Board approved the transition of the Mt. Hope Project into the development phase and authorized management to proceed withthe execution of the project as outlined in the BFS. Liberty Property. We are currently in the process of exploration and evaluation of the Liberty Property. In March 2006 we purchased a portion of the Liberty Property, an approximately ten square mile property in Nye County, Nevada, including waterrights, mineral and surface rights, buildings and certain equipment from High Desert Winds LLC (“High Desert”) pursuant to a purchase agreement. Atclosing, we paid High Desert a cash payment of $4.5 million for the portion of the Liberty Property that we purchased and made an additional payment of$1.0 million in November of 2006 for the purchase of the remaining portion of High Desert’s interest in this property for the total purchase price of$5.5 million including buildings and equipment at the Liberty site. The primary purpose of the Liberty purchase was to further the Company’s strategy ofexploring and developing other potential molybdenum properties. At December 31, 2006, the Liberty Property was subject to a 12 percent royalty payable with respect to the net revenues generated from molybdenumor copper minerals removed from the properties purchased. In January 2007, we completed the acquisition of all of the issued and outstanding shares of thecorporation that held the 12 percent net smelter royalty interest in the mineral rights of the Liberty Property and, as a result of this purchase, we now own theLiberty Property and all associated mineral rights. We paid approximately $3.7 million in cash at closing, net of cash acquired of $1.2 million. At firstcommercial production of the property, we have agreed to pay an additional $6.0 million. Because we cannot determine beyond a reasonable probability thatthe mine will attain commercial production, the Company has not recognized the $6.0 million liability in its financial statements. In connection with theacquisition, we also received restricted cash totaling $0.5 million and assumed reclamation and remediation costs, accounts payable and accrued liabilities of$0.3 million. During the year ended December 31, 2007, we purchased a patented lode mining claim adjacent to the Liberty Property for $0.2 million cash andcompleted the purchase of certain patented lode mining claims referred to as the Liberty Claims on property adjacent to the Liberty Property for cash of$0.1 million and 150,000 shares of common stock valued at $0.4 million. These two acquisitions of mining claims were completed to control additionalmineral rights needed for the development of the Liberty Property. We currently believe that we have all the mineral, water and surface rights necessary todevelop the Liberty Property. Other Mining Properties. We also have mining claims and land purchased prior to 2006 which consist in part of (a) approximately 107 acres offee simple land in the Little Pine Creek area of Shoshone County, Idaho, (b) six patented mining claims known as the Chicago-London group, located near thetown of Murray in Shoshone County, Idaho, (c) 265 acres of private land with three unpatented claims in Josephine County, Oregon, known as the TurnerGold project, and (d) an undivided 50% interest in the reserved mineral rights known as the Margaret Property and 105 unpatented mining claims comprisingthe Red Bonanza Property, situated in the St. Helens Mining District, Skamania County, Washington, and (e) 34 unpatented mining claims in MarionCounty, Oregon, known as the Detroit property. Summary. The following is a summary of mining properties, land and water rights at December 31, 2011 and 2010 (in thousands): AtDecember 31,2011At December 31, 2010Mt. Hope Project:Development costs$99,984$89,602Mineral, land and water rights10,52610,253Advance Royalties22,60022,600Total Mt. Hope Project133,110122,445Total Liberty Property9,7339,749Other Properties889889Total$143,732$133,093 On June 26, 2009, the Company and Josephine Mining Corp. (“JMC”), a privately-owned Canadian company whose president is a related party toa member of the Company’s Board of Directors, entered into an Option to Purchase Agreement for the Company’s non-core Turner Gold property, a multi-metallic property located in Josephine County, Oregon. The Company acquired the property in 2004. JMC paid $0.1 million upon entering into the agreement,an additional $0.3 million 66Table of Contents in January 2011, and an additional $0.3 million in December 2011. Once made, each option payment is non-refundable and will be applied to the purchaseprice at the completion of the agreement. The $0.7 million has been recorded as a deferred gain pending completion of the purchase. On September 30, 2011,the Company and JMC executed an amendment to the original agreement indicating that JMC had acquired certain properties within a two-mile radius of theTurner Gold property. The Company and JMC executed an additional amendment on the same date allowing JMC to extend the payment date for the third andfinal installment payment by making the payment of $300,000 noted above in December 2011. Under the terms of the amendment, $250,000 of the thirdpayment shall apply to the purchase price of $2.0 million with the remaining $50,000 considered a deferral fee. The remaining payment of $1,350,000 shallbe due at the earlier of September 30, 2012 or upon receipt by JMC of all permits and approvals necessary to commence mining operations plus three months. The periodic payments allow JMC certain exploratory rights. Ownership of the Turner Gold property will transfer to JMC upon the final payment. TheCompany will also retain a production royalty of 1.5% of all net smelter returns on future production from the property, should JMC acquire the property. The book value of the Company’s investment in the Turner Gold property is approximately $800,000. On March 8, 2010, the Company and Ascot USA, Inc. (“Ascot”), a Washington corporation, entered into an Option to Purchase Agreement for theCompany’s non-core Margaret property, an undivided 50% interest in the reserved mineral rights and all of the Company’s interest in the 105 unpatentedmining claims comprising the Red Bonanza Property, situated in the St. Helens Mining District, Skamania County, Washington. The Company acquired theproperty in 2004. Ascot paid $0.1 million upon entering into the agreement and an additional $0.3 million in May 2011. Once made, each option payment isnon-refundable. The $0.4 million has been recorded as a deferred gain pending completion of the purchase. If Ascot proceeds, the final installment paymentof $1.6 million is due on or before June 8, 2012. The periodic payments allow Ascot certain exploratory rights. If Ascot makes all three of the installmentpayments, ownership of the Margaret property will transfer to Ascot upon the final payment. The Company will also retain a production royalty of 1.5% ofall net smelter returns on future production from the property, should Ascot acquire the property. The Company carries no book value in the property. On September 30, 2011, the Company and Russell Mining & Minerals, Inc. (“RMMI”), a privately-owned company whose president is a relatedparty to one of the Company’s Board members, entered into an Option to Purchase Agreement for the Company’s non-core Detroit Copper property, a multi-metallic property located in Marion County, Oregon. RMMI paid $0.1 million upon entering into the agreement. Once made, each option payment is non-refundable. The $0.1 million has been recorded as a deferred gain pending completion of the purchase. If RMMI proceeds, an additional $0.3 millioninstallment payment is due March 31, 2013, and the final installment payment of $1.6 million is due on or before September 30, 2014. The final optionpayment may be extended by RMMI by up to two years by making non-refundable installment payments of $160,000 in each year to be extended. Theseextension payments are not to be applied to the purchase price of the property. The periodic payments allow RMMI certain exploratory rights. If RMMI makesall three of the installment payments, ownership of the Detroit Copper property will transfer to RMMI upon the final payment. The Company has also retaineda Production Royalty of 1.5% of all net smelter returns on future production from the property. The Company currently carries no book value in the project. Development costs and Deposits on project property, plant and equipment Development costs of $100.0 million include hydrology and drilling costs, expenditures to further the permitting process, capitalized salaries, projectengineering costs, and other expenditures required to fully develop the Mt. Hope Project. Deposits on project property, plant and equipment of $66.5 millionrepresent ongoing progress payments on equipment orders for the custom-built grinding and milling equipment, related electric mill drives, and otherprocessing equipment that require the longest lead times. Restricted Cash held for Electricity Transmission The LLC has paid $12.0 million into an escrow arrangement for electricity transmission services. The amount represents security on a transmissioncontract that will provide power to the Mt. Hope Project, and is accounted for as restricted cash. All amounts escrowed are to be returned to the Company aselectricity is delivered or on December 1, 2015, in the event that electricity transmission at the Mt. Hope Project has not commenced or at the time the agreementis cancelled by the Company. 67Table of Contents Writedowns of Development Costs and Deposits The Company has written off approximately $3.4 million in deposits related to a contract for the purchase of electric shovels with the passage of aJune 30, 2011 deadline for a firm purchase order. The contract remains in place and the remaining $3.4 million forfeitable if an additional $13.0 milliondeposit is not made by June 30, 2012. The LLC continues to need this equipment for construction phase mine development and post-construction mining,and is committed to either renegotiate the timing and amount of the contractual deposit terms to provide more payment flexibility or obtaining additionalfunding sources in order to make this payment without impacting our liquidity position. At an open public meeting on July 6, 2010, the Eureka County Board of Commissioners (“the Commissioners”) signed documents to relinquish aland lease held by the LLC in Eureka County, Nevada (the “County”). The LLC had planned to develop housing on the lease after receipt of ROD. Therelinquishment made the land available for more rapid housing development by the County. The LLC had invested approximately $5.0 million in preliminarydevelopment costs for the property covered by the relinquished lease. As a result of the relinquishment, the Company incurred a charge of $5.0 million in2010, of which $1.0 million is attributable to our noncontrolling interest. In addition, the County returned a $0.1 million cash deposit to the Company. NOTE 5 — COMMON STOCK UNITS, COMMON STOCK AND COMMON STOCK WARRANTS Year ended December 31, 2011 During the year ended December 31, 2011, options representing 133,333 shares and warrants representing 5,183,209 shares were exercised for cashin the amount of $0.4 and $19.1 million, respectively. We issued 24,547 shares of common stock upon the cashless exercise of warrants, 70,175 shares ofcommon stock pursuant to stock awards, and 53,511 shares of common stock upon the exercise of stock appreciation rights. Year ended December 31, 2010 During the year ended December 31, 2010 options representing 20,000 shares and warrants representing 812,500 shares were exercised for cash inthe amount of $0.1 million and $3.0 million, respectively. We issued 59,770 shares of common stock upon the cashless exercise of warrants, 24,074 sharesof common stock upon the cashless exercise of options and 156,250 shares of common stock pursuant to stock awards. Year ended December 31, 2009 During the year ended December 31, 2009 options representing 100,000 shares were exercised for cash in the amount of $0.1 million. We also issued502,225 shares of common stock pursuant to stock awards. The following is a summary of common stock warrant activity for each of the three years ended December 31, 2011: Number ofSharesUnderWarrantsExercise PriceBalance at December 31, 20087,455,434$3.75 to $10.00Activity for the year ended December 31, 2009——Balance at December 31, 20097,455,434$3.75 to $10.00Exercised for cash(812,500)3.75Exercised in cashless exchange(379,725)3.75Balance at December 31, 2010 (1)6,263,209$3.66 to $10.00Exercised for cash(5,183,209)3.66 to $3.75Exercised in cashless exchange(80,000)3.75Balance at December 31, 20111,000,000$5.00Weighted average exercise price$5.00 (1) See discussion below related to repricing of warrants during 2010 resulting in a change in the exercise price from $3.75 to $3.66 and $10.00 to$5.00. 68Table of Contents Coghill Capital Management and its affiliates (“Coghill”), a significant stockholder in the Company, provided substantial assistance to theCompany with the signing of the Consent and Waiver Agreement and the Extension Agreement with ArcelorMittal. In recognition of that support, on April 16,2010, the Company amended and restated warrants issued to Coghill to purchase one million shares of the Company’s common stock issued in connectionwith the November 2007 private placement and original molybdenum supply agreement with ArcelorMittal to reduce the price of the warrants from $10.00 pershare to $5.00 per share. The incremental cost of the reissued warrants was $0.6 million, which was recorded as expense in 2010. The warrants remainexercisable once the Company has received financing necessary for the commencement of commercial production at the Mt. Hope Project and will expire oneyear thereafter. It will also become exercisable in the event of certain corporate reorganizations. On December 21, 2010, the Company amended and restated warrants issued to Coghill to purchase 4.3 million shares of the Company’s commonstock issued in connection with a February 2006 private placement to reduce the price of the warrants from $3.75 per share to $3.66 per share provided thatthe warrants were exercised on or before January 3, 2011. The incremental cost of the reissued warrants was $0.4 million, which was recorded as expense in2010. On January 3, 2011, Coghill exercised the warrants for $15.6 million. All warrants outstanding at December 31, 2011 are exercisable at $5.00 per share once General Moly has received financing necessary for thecommencement of commercial production at the Mt. Hope Project and will expire one year thereafter. Pursuant to our Certificate of Incorporation, we are authorized to issue 200,000,000 shares of $0.001 par value common stock. All shares have equalvoting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and therefore, the holders of more than 50% of the commonstock could, if they choose to do so, elect all of the directors of the Company. NOTE 6 — PREFERRED STOCK Pursuant to our Certificate of Incorporation we are authorized to issue 10,000,000 shares of $0.001 per share par value preferred stock. Theauthorized but unissued shares of preferred stock may be issued in designated series from time to time by one or more resolutions adopted by the Board. TheBoard has the authority to determine the preferences, limitations and relative rights of each series of preferred stock. At December 31, 2011, and 2010,no shares of preferred stock were issued or outstanding. Subject to certain exceptions, if any person becomes the beneficial owner of 20% or more of theCompany’s common stock, each right will entitle the holder, other than the acquiring person, to purchase Company common stock or common stock of theacquiring person having a value of twice the exercise price. In addition, if there is a business combination between the Company and the acquiring person, orin certain other circumstances, each right that is not previously exercised will entitle the owner (other than the acquiring person) to purchase shares of commonstock (or an equivalent equity interest) of the acquiring person at one-half the market price of those shares. NOTE 7 — EQUITY INCENTIVES In 2006, the Board and shareholders of the Company approved the 2006 Equity Incentive Plan (“2006 Plan”) that replaced the 2003 Equity IncentivePlan (“2003 Plan”). In May 2010, our shareholders approved an amendment to the 2006 Plan increasing the number of shares that may be issued under theplan by 4,500,000 shares to 9,600,000 shares. The 2006 Plan authorizes the Board, or a committee of the Board, to issue or transfer up to an aggregate of9,600,000 shares of common stock, of which 3,390,693 remain available for issuance as of December 31, 2011. Awards under the 2006 Plan may includeincentive stock options, non-statutory stock options, restricted stock units, restricted stock awards, and stock appreciation rights (“SARs”). At the option ofthe Board, SARs may be settled with cash, shares, or a combination of cash and shares. The Company settles the exercise of other stock-based compensationwith newly issued common shares. Stock-based compensation cost is estimated at the grant date based on the award’s fair value as calculated by the Black-Scholes option pricing modeland is recognized as compensation ratably on a straight-line basis over the requisite vesting/service period. As of December 31, 2011, there was $3.3 millionof total unrecognized compensation cost related to share-based compensation arrangements, which is expected to be recognized over a weighted-average period of1.6 years. Stock Options and Stock Appreciation Rights All stock options and stock appreciation rights (“SARs”) are approved prior to or on the date of grant. Stock options and SARs are granted at anexercise price equal to or greater than the Company’s closing stock price on the date of grant. Both award types vest over a period of zero to three years with acontractual term of five years after vesting. The Company 69Table of Contents estimates the fair value of stock options and SARs using the Black-Scholes valuation model. Key inputs and assumptions used to estimate the fair value ofstock options and SARs include the grant price of the award, expected option term, volatility of the Company’s stock, the risk-free rate and the Company’sdividend yield. The following table presents the weighted-average assumptions used in the valuation and the resulting weighted-average fair value per option orSAR granted: For the Year Ended December 31:201120102009Expected Life *3.5 to 5.5 years3.5 to 5.5 years3.5 to 5.5 yearsInterest Rate+0.39% to 2.84%0.67% to 2.58%0.3% to 1.80%Volatility **+86.39% to 95.57%90.0% to 95.48%93.02% to 122.93%Dividend Yields———Weighted Average Fair Value of Stock OptionsGranted During the Year$—$—$0.95Weighted Average Fair Value of Stock AppreciationRights Granted During the Year$2.25$3.45$0.56 * The expected life is the number of years that the Company estimates, based upon history, that options or SARs will be outstanding prior to exercise orforfeiture.* * The Company’s estimates of expected volatility are principally based on the historic volatility of the Company’s common stock over the most recent periodcommensurate with the estimated expected life of the Company’s stock options and other relevant factors.+The interest rate and volatility used by the Company in calculating stock compensation expense represent the values in effect at the date of grant for allawards. These values are periodically updated for stock appreciation rights, which may be settled in cash to reflect the current market conditions. At December 31, 2011, the aggregate intrinsic value of outstanding and exercisable (fully vested) options and SARs was $0.9 million and had aweighted-average remaining contractual term of 3.4 years. The total intrinsic value of options exercised during the years ended December 31, 2011, 2010 and2009 was $0.3 million, nil, and $0.2 million, respectively. The total intrinsic value of SARs exercised during the year ended December 31, 2011,2010 and2009 was $0.3 million, nil and nil, respectively. Restricted Stock Units and Stock Awards Grants of restricted stock units and stock awards (“Stock Awards”) have been made to Board members, officers, and employees. Stock Awardshave been granted as performance based, earned over a required service period, or to Board members and the Company Secretary without any servicerequirement. Time based grants for officers and employees generally vest and stock is received without restriction to the extent of one-third of the granted stockfor each year following the date of grant. Also, time based grants were offered to certain employees in connection with the cash conservation plan and vestedover a period of approximately 19 months. Performance based grants are recognized as compensation based on the probable outcome of achieving theperformance condition. Past compensation for Stock Awards issued to members of the Board of Directors that vested over time were recognized over thevesting period of one to two years. Stock Awards issued to members of the Board of Directors and the Company Secretary that are fully vested at the time ofissue are recognized as compensation upon grant of the award. The compensation expense recognized by the Company for Stock Awards is based on the closing market price of the Company’s common stock onthe date of grant. For the years ended December 31, 2011, 2010 and 2009 the weighted-average grant-date fair value for Stock Awards was $4.32, $3.99, and$2.26, respectively. Summary of Equity Incentive Awards The following table summarizes activity under the Plans during the year ended December 31, 2011: 70Table of Contents Stock OptionsSARsStock AwardsWeightedAverageExercisePriceNumber of SharesUnder OptionWeightedAverageStrikePriceNumberof SharesUnderOptionWeightedAverageGrantPriceNumber ofSharesBalance at January 1, 2011$5.382,658,323$3.09912,461$4.24800,392Awards Granted——3.28492,8944.32428,073Awards Exercised or Earned2.69(133,333)1.80(79,809)3.63(576,035)Awards Forfeited8.67(26,667)4.34(35,047)3.55(36,667)Awards Expired11.45(13,333)————Balance at December 31, 2011$5.462,484,990$3.211,290,499$5.39615,763 Exercisable at December 31, 2011$5.402,329,990$1.97350,284 A summary of the status of the non-vested awards as of December 31, 2011 and changes during the year ended December 31, 2011 is presented below. Stock OptionsSARsStock AwardsWeightedAverageFairValueNumber of SharesUnder OptionWeightedAverageFairValueNumberof SharesUnderOptionWeightedAverageFairValueNumber ofSharesBalance at January 1, 2011$4.40285,002$4.09707,941$4.24800,392Awards Granted——3.28492,8944.32428,073Awards Vested or Earned8.34(103,335)1.94(225,573)3.63(576,035)Awards Forfeited8.67(26,667)4.34(35,047)3.55(36,667)Balance at December 31, 2011$6.25155,000$3.67940,215$5.39615,763 Compensation Cost Recognized and Capitalized Related to Equity Incentives Summary of Compensation Cost Recognized andCapitalized related to Equity Incentives for theYear Ended December 31 (in thousands):201120102009Stock Options*$(49)$154$1,389SARsPerformance based20423—Vesting over time5741,243470Forfeitures related to restructuring——(567)Stock Awards:Performance based*(75)12—Vesting over time507821487Board of Directors and Secretary810509644Total$1,971$2,762$2,423Included in:Capitalized as Development2581,121950Expensed1,7131,6411,473$1,971$2,762$2,423 * The Company recorded significant forfeitures during 2011 related to unvested options of terminated employees and performance-basedrestricted shares forfeited as a result of the failure to achieve certain associated milestones required for vesting. Taxes A portion of the Company’s granted options are intended to qualify as incentive stock options (“ISO”) for income tax purposes. As such, a taxbenefit is not recorded at the time the compensation cost related to the options is recorded for 71Table of Contents book purposes due to the fact that an ISO does not ordinarily result in a tax benefit unless there is a disqualifying disposition. Stock option grants of non-qualified options result in the creation of a deferred tax asset, which is a temporary difference, until the time that the option is exercised. Any excess taxbenefits from non-qualified stock option exercises are not recorded until the tax deduction reduces income tax payable. NOTE 8 — CHANGES IN CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST AND EQUITY Activity forYear EndedChanges in Contingently Redeemable NoncontrollingInterest (Dollars in thousands)December 31,2011December 31,2010December 31,2009Total Contingently Redeemable Noncontrolling Interest January 1,2011, 2010, & 2009, respectively$98,753$99,761$100,000Less: Net Loss Attributable to Contingently RedeemableNoncontrolling Interest(680)(1,008)(239)Total Contingently Redeemable Noncontrolling InterestDecember 31, 2011, 2010, & 2009, respectively$98,073$98,753$99,761 NOTE 9 — INCOME TAXES At December 31, 2011 and 2010 we had deferred tax assets principally arising from the net operating loss carry-forwards for income tax purposesmultiplied by an expected rate of 35%. As management of the Company cannot determine that it is more likely than not that we will realize the benefit of thedeferred tax assets, a valuation allowance equal to the net deferred tax asset has been established at December 31, 2011 and 2010. The significant componentsof the deferred tax asset at December 31, 2011 and 2010 were as follows (in thousands): December 31,2011December 31,2010Operating loss carry forward$143,412$110,306Unamortized exploration expense11,54611,572Fixed asset depreciation109(37)Deductible stock based compensation3,8352,275Other2510Deductible temporary difference$159,153$124,116Taxable temporary difference — Investment in Eureka Moly, LLC$(64,979)$(41,917)Net deductible temporary difference$94,174$82,199Deferred tax asset$32,961$28,770Deferred tax asset valuation allowance$(32,961)$(28,770)Net deferred tax asset$—$— At December 31, 2011 and 2010 we had net operating loss carry-forwards of approximately $143.4 million and $110.3 million, respectively, whichexpire in the years 2017 through 2031. The change in the allowance account from December 31, 2010 to December 31, 2011 was $4.2 million and the changebetween December 31, 2010 and December 31, 2009 was $3.8 million. As of December 31, 2011 and 2010, the Company had no unrecognized tax benefits. There was no change in the amount of unrecognized taxbenefits as a result of tax positions taken during the year or in prior periods or due to settlements with taxing authorities or lapses of applicable statues oflimitations. The Company is open to federal and state tax audits until the applicable statutes of limitations expire. 72Table of Contents NOTE 10 — COMMITMENTS AND CONTINGENCIES Mt. Hope Project The Mt. Hope Lease may be terminated upon the expiration of its 30-year term, earlier at the election of the LLC, or upon a material breach of theagreement and failure to cure such breach. If the LLC terminates the lease, termination is effective 30 days after receipt by MHMI of written notice to terminatethe Mt. Hope Lease and no further payments would be due to MHMI. In order to maintain the lease, the LLC must pay certain deferral fees and advanceroyalties as discussed below. The Mt. Hope Lease Agreement requires a royalty advance (“Construction Royalty Advance”) of 3% of certain construction capital costs, as definedin the Mt. Hope Lease. The LLC is obligated to pay a portion of the Construction Royalty Advance each time capital is raised for the Mt. Hope Project basedon 3% of the expected capital to be used for those certain construction capital costs defined in the lease. Through December 31, 2011, we have paid $13.7million of the total Construction Royalty Advance. We paid $0.6 million in early 2011 as a result of the exercise of outstanding warrants and another $9.0million in October 2011. Based on our Project Capital Estimate we estimate that an additional $9.0 million must be paid on or before October 19, 2012,which amount has been accrued. Once the Construction Royalty Advance has been paid in full, the LLC is obligated to pay an advance royalty (“Annual Advance Royalty”) eachOctober 19 thereafter in the amount of $0.5 million per year. The Construction Royalty Advance and the Annual Advance Royalty are collectively referred toas the “Advance Royalties.” All Advance Royalties are credited against the MHMI Production Royalties (as hereinafter defined) once the mine has achievedcommercial production. After the mine begins production, the LLC estimates that the Production Royalties will be in excess of the Annual Advance Royaltiesfor the life of the project and, further, the Construction Royalty Advance will be fully recovered (credited against MHMI Production Royalties) by the end ofthe third year of commercial production. Deposits on project property, plant and equipment At December 31, 2011, we have active orders with varying stages of fabrication on milling process equipment comprised of two 230kV primarytransformers and substation, a primary crusher, a semi-autogenous mill, two ball mills, and various motors for the mills. We have suspended fabrication on16 flotation cells, lime slaking equipment, hydrocyclones, and other smaller milling process equipment with the ability to re-initiate fabrication at any time. We have completed negotiations with the manufacturer of two multi-hearth molybdenum roasters to terminate its fabrication of this equipment and receivefinished goods of the partially completed order. We plan to re-establish a new purchase order with this manufacturer as financing becomes available andequipment procurement is restarted under then current market terms and conditions. The following table sets forth the LLC’s cash commitments under mining and milling equipment contracts (collectively, “Purchase Contracts”) atDecember 31, 2011, excluding the $13.0 million deposit referenced below that would be required before June 30, 2012 on the electric shovels contract (inmillions): YearAs ofDecember 31,201120123.72013 and thereafter13.0Total (1)$16.7 73Table of Contents (1) Also at December 31, 2011, we have a contract to purchase two electric shovels that is cancellable, has no firm schedule of payments, andincludes a $3.4 million deposit that is forfeitable if an additional $13.0 million deposit is not made by June 30, 2012. The LLC continues toneed this equipment for construction phase mine development and post-construction mining, and is committed to either renegotiate the timingand amount of the contractual deposit terms to provide more payment flexibility or obtaining additional funding sources in order to make thispayment without impacting our liquidity position. If the LLC is unable to modify the terms to its satisfaction or obtain additional funding, andretain the equipment delivery commitment, the $3.4 million deposit will be considered impaired and written off on or prior to June 30, 2012. On February 28, the LLC issued a firm purchase order for 18 haul trucks to Cashman Equipment Company, the Nevada-based dealer forCaterpillar. The order provides for delivery of those haul trucks required to perform initial mine development, currently scheduled for thesecond half of 2013. A non-refundable down-payment of $0.6 million was made at the time of order with an additional $0.6 million due 12months prior to truck shipment, but the contract is cancellable with no further liability to the LLC up until the time of truck shipment. Anadditional 6 haul trucks are not required until after the commencement of commercial production, and will be ordered at a future date. Obligations under capital and operating leases We have contractual obligations under capital and operating leases that will require a total of $0.4 million in payments over the next three years. Assets under capital lease relate to light vehicles leased by the Company for use in operations. Operating leases consist primarily of rents on office facilitiesand office equipment. Our expected payments are $0.3 million, $0.1 million and nil for the years ended December 31, 2012, 2013 and 2014, respectively. Weincurred charges of $0.3 million as of December 31, 2011 in amortization on assets under capital lease. Creation of Agricultural Sustainability Trust On August 19, 2010, the LLC entered into an agreement with the Eureka Producers’ Cooperative (the “EPC”) whereby the LLC will fund a $4.0million Sustainability Trust (the “Trust”) in exchange for the cooperation of the EPC with respect to the LLC’s water rights and permitting of the Mt. HopeProject. The Trust will be tasked with developing and implementing programs that will serve to enhance the sustainability and well-being of the agriculturaleconomy in the Diamond Valley Hydrographic Basin through reduced water consumption. The Trust may be funded by the LLC over several years based on the achievement of certain milestones, which are considered probable, and assuch $4.0 million has been accrued in the Company’s December, 2011, financial statements and is included in mining properties, land, and water rights. Permitting Considerations In the ordinary course of business, mining companies are required to seek governmental permits for expansion of existing operations or for thecommencement of new operations. The LLC will be required to obtain a ROD from the BLM authorizing implementation of the Mt. Hope Project POO. Thisapproval can be obtained only after successful completion of the National Environmental Policy Act process of environmental evaluation, which incorporatessubstantial public comment. The LLC will also need to obtain various state and federal permits including water protection, air quality, water rights andreclamation permits. In addition to requiring permits for the development of the Mt. Hope Project, we will need to obtain and modify various mining andenvironmental permits during the life of the Mt. Hope Project. Obtaining, modifying, and renewing the necessary governmental permits is a complex and time-consuming process involving numerous jurisdictions and often involving public hearings and substantial expenditures. The duration and success of theLLC’s efforts to obtain, modify or renew permits will be contingent upon many variables, some of which are not within the LLC’s control. Increased costs ordelays could occur, depending on the nature of the activity to be permitted and the interpretation of applicable requirements implemented by the permittingauthority. All necessary permits may not be obtained and, if obtained, may not be renewed, or the costs involved in each case may exceed those that wepreviously estimated. It is possible that the costs and delays associated with compliance with such standards and regulations could become such that the LLCwould not proceed with the development or operation of the Mt. Hope Project. Water Rights Considerations In addition to working to complete the EIS, we are working to finalize the transfer of water rights to mining use. In March 2009 we were granted ourwater applications in a Ruling by the State Engineer. However, that Ruling was 74Table of Contents successfully appealed in April 2010 in Nevada District Court (“NDC”), remanding the matter for another hearing by the State Engineer. On July 15, 2011, the State Engineer issued a second Ruling granting the Company’s water right applications. In August 2011, Eureka County andtwo other parties comprised of three individual water rights holders in Diamond Valley and one in Kobeh Valley, filed Petitions and Amended andSupplemental Petitions (“Petitions”) with the NDC appealing the second Ruling of the State Engineer. We continue to anticipate a favorable NDC decision,upholding the State Engineer’s second Ruling. The appeal hearing is set for April 3, 2012 before the NDC. A decision by the NDC is expected in mid-2012,although the NDC is not required to act under any specified timeline. The appeal does not prevent the State Engineer from issuing the permits and as such,the State Engineer completed issuance of all permits on December 14, 2011 and certain amended permits on January 4, 2012 subject to the second Ruling. The water will become available for consumptive use following the State Engineer’s approval of the Company’s Monitoring, Management and Mitigation Plan(“3M Plan”), developed with the input and cooperation of Eureka County. The Company is continuing to work with the State Engineer and Eureka Countyfollowing our prior submissions, to finalize the 3M Plan and we anticipate the State Engineer will approve the 3M Plan prior to commencement of construction,in the second half of 2012. Environmental Considerations Our mineral property holdings in Shoshone County, Idaho include lands contained in mining districts that have been designated as “Superfund”sites pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act. This “Superfund Site” was established to investigate andremediate primarily the Bunker Hill properties of Smelterville, Idaho, a small portion of Shoshone County where a large smelter was located. However,because of the extent of environmental impact caused by the historical mining in the mining district, the Superfund Site covers the majority of ShoshoneCounty including our Chicago-London and Little Pine Creek properties as well as many small towns located in Northern Idaho. We have conducted aproperty environmental investigation of these properties, which revealed no evidence of material adverse environmental effects at either property. We areunaware of any pending action or proceeding relating to any regulatory matters that would affect our financial position due to these inactive mining claims inShoshone County. NOTE 11 — UNAUDITED SUPPLEMENTARY DATA The following is a summary of selected quarterly financial information (unaudited): Year Ended December 31, 2011(in thousands, except per shareamounts)Q1Q2Q3Q4Loss from operations$(4,107)$(5,982)$(2,319)$(2,816)Other (expense)/income(49)(58)(61)(61)Consolidated net loss(4,156)(6,040)(2,380)(2,877)Basic and diluted net loss per share$(0.05)$(0.06)$(0.03)$(0.03) Year Ended December 31, 2010Loss from operations$(2,846)$(3,165)$(7,266)$(3,303)Other income/(expense)1(36)(60)(56)Consolidated net loss(2,845)(3,201)(7,326)(3,359)Basic and diluted net loss per share$(0.04)$(0.04)$(0.09)$(0.05) NOTE 12 — SUBSEQUENT EVENTS On February 28, the LLC issued a firm purchase order for 18 haul trucks to Cashman Equipment Company, the Nevada-based dealer forCaterpillar. The order provides for delivery of those haul trucks required to perform initial mine development, currently scheduled for the second half of2013. A non-refundable down-payment of $0.6 million was made at the time of order with an additional $0.6 million due 12 months prior to truck shipment,but the contract is cancellable with no further liability to the LLC up until the time of truck shipment. An additional 6 haul trucks are not required until afterthe commencement of commercial production, and will be ordered at a future date. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 75Table of Contents ITEM 9A. CONTROLS AND PROCEDURES An evaluation was performed under the supervision and with the participation of our management, including our principal executive officer andprincipal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the SecuritiesExchange Act of 1934) as of the end of the period covered by this Annual Report on Form 10-K. Based on the foregoing, our management concluded that ourdisclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the ExchangeAct is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and suchinformation is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timelydecisions regarding required disclosure. There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, 2011 that has materiallyaffected, or is reasonably likely to materially affect, our internal control over financial reporting. REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal controlover financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financialstatements for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financialreporting includes maintaining records that in reasonable detail accurately and fairly reflect the Company’s transactions; providing reasonable assurance thattransactions are recorded as necessary for preparation of the Company’s financial statements; providing reasonable assurance that receipts and expenditures ofthe Company’s assets are made in accordance with management’s authorization; and providing reasonable assurance that unauthorized acquisition, use ordisposition of the Company’s assets that could have a material effect on the financial statements would be prevented or detected on a timely basis. Because ofits inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of the Company’s financialstatements would be prevented or detected. Management conducted its evaluation of the effectiveness of the Company’s internal controls over financial reporting based on the framework inInternal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation,management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2011. The effectiveness of the Company’s assessment of internal control over financial reporting as of December 31, 2011 has been audited byPricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein. ITEM 9B. OTHER INFORMATION 2011 Executive Incentive Payments On February 16, 2012, the compensation committee of the Board and the Board approved the following incentive compensation for 2011 to ournamed executive officers as indicated below. ExecutiveTitleIncentive PaymentBruce D. HansenChief Executive Officer$212,098David A. ChaputChief Financial Officer$91,277Robert I. PenningtonChief Operating Officer$83,541Lee M. ShumwayController and Treasurer$65,093R. Scott RoswellCorporate Counsel — VP Human Resources$74,991 76Table of Contents In addition, the Board authorized the following incentive compensation for our named executive officers to be vested and payable upon achievementof ROD. ExecutiveIncentive PaymentBruce D. Hansen$106,652David A. Chaput$45,898Robert I. Pennington$42,009Lee M. Shumway$32,732R. Scott Roswell$37,709 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information regarding directors and executive officers of registrant is presented under the heading “Directors and Executive Officers” in our definitiveproxy statement for use in connection with the 2012 Annual Meeting of Stockholders (“2011 Proxy Statement”) to be filed within 120 days after our fiscal yearended December 31, 2011, and is incorporated herein by this reference thereto. Information regarding Section 16(a) beneficial ownership reporting compliance report is presented under the heading “Section 16(a) BeneficialOwnership Reporting Compliance” in our 2011 Proxy Statement, and is incorporated herein by this reference thereto. Information regarding our code of ethicsis presented under the heading “Code of Business Conduct and Ethics” in our 2011 Proxy Statement, and is incorporated herein by reference thereto. Information regarding our Audit Committee, Finance Committee and our Nominating Committee is presented under the heading “The Board of Directors,Board Committees and Director Independence” in our 2012 Proxy Statement, and is incorporated herein by reference thereto. ITEM 11. EXECUTIVE COMPENSATION Information regarding executive compensation is presented under the heading “Executive Compensation” in our 2012 Proxy Statement, and isincorporated herein by this reference thereto. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS Information regarding certain information with respect to our equity compensation plans as of December 31, 2011 is set forth under the heading“Equity Compensation Plan Information” in our 2012 Proxy Statement, and is incorporated herein by this reference thereto. Information regarding security ownership of certain beneficial owners and management is set forth under the heading “Voting Securities and PrincipalHolders” in our 2012 Proxy Statement, and is incorporated herein by this reference thereto. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Information regarding certain relationships and related transactions is presented under the heading “Certain Relationships and Related Transactions”in our 2012 Proxy Statement, and is incorporated herein by this reference thereto. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Information regarding principal accounting fees and services is presented under the headings “Audit Fees”, “Audit-Related Fees”, “Tax Fees”, and“All Other Fees” in our 2012 Proxy Statement, and is incorporated herein by this reference thereto. 77Table of Contents PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (1) Financial Statements See the Index to Consolidated Financial Statements included on page 50 for a list of the financial statements included in this Form 10-K. (2) Financial Statement Schedules Financial statement schedules are omitted because they are not required or are not applicable. (3) Exhibits ExhibitNumberDescription 3.1†Certificate of Incorporation (Filed as Exhibit 3.1 to our Current Report on Form 8-K filed on October 5, 2007.)3.2†Certificate of Designation of Series A Junior Participating Preferred Stock (Filed as Exhibit 3.1 to our Current Report on Form 8-Kfiled on March 5, 2010.)3.3†Amended and Restated Bylaws (Filed as Exhibit 3.2 to our Current Report on Form 8-K filed on March 5, 2010.)4.1†Form of Security Purchase Agreement in connection with the private placement completed February 15, 2006 (Filed as Exhibit 4.1 toour Current Report on Form 8-K filed on February 17, 2006.)4.2†Form of Common Stock Purchase Warrant in connection with the private placement completed February 15, 2006 (Filed asExhibit 4.2 to our Current Report on Form 8-K filed on February 17, 2006.)4.3†Form of Common Stock Warrant Issued Pursuant to Placement Agent Agreement in connection with the private placement completedFebruary 15, 2006 (Filed as Exhibit 4.3 to our Current Report on Form 8-K filed on February 17, 2006.)10.1†Lease Agreement, dated October 17, 2005, between the Company and Mount Hope Mines, Inc. (Filed as Exhibit 10.1 to our CurrentReport on Form 8-K filed on January 23, 2006.)10.2†Modification to Mount Hope Mines Lease Agreement, dated January 26, 2006 (Filed as Exhibit 10.11 to our Annual Report onForm 10-KSB filed on March 31, 2006.)10.3†Amendment to Lease Agreement, made effective as of November 20, 2007, between the Company and Mount Hope Mines, Inc. (Filedas Exhibit 10.3 to our Annual Report on Form 10-KSB filed on March 21, 2008.)10.4†Option to Lease, dated November 12, 2004, between the Company and Mount Hope Mines, Inc. (Filed as Exhibit 10.1 to our AnnualReport on Form 10-KSB filed on April 6, 2005.)10.5†Stock Purchase Agreement, dated December 11, 2006, between the Company and Equatorial Mining Limited (Filed as Exhibit 10.17to our Annual Report on Form 10-KSB filed on April 3, 2007.)10.6†Securities Purchase Agreement, dated as of November 19, 2007, between the Company and ArcelorMittal S.A. (Filed as Exhibit 10.6to our Annual Report on Form 10-KSB filed on March 21, 2008.)10.7†Consent and Waiver Agreement, dated April 16, 2010, by and between the Company and ArcelorMittal S.A. (Filed as Exhibit 10.1 toour Current Report on Form 8-K filed on April 19, 2010.)10.8†+Amended and Restated Employment Agreement, dated December 30, 2011, between the Company and Bruce D. Hansen (Filedherewith.)10.9†+Amended and Restated Employment Agreement, dated December 30, 2011, between the Company and David Chaput (Filed herewith.)10.10†+Form of Indemnification Agreement (Filed as Exhibit 10.18 to our Current Report on Form 8-K filed on October 5, 2007.)10.11†+General Release and Settlement Agreement between the Company and Robert L. Russell entered into on October 1, 2007 (Filed asExhibit 10.10 to our Annual Report on Form 10-KSB filed on March 21, 2008.)10.12†+Consulting and Advisory Agreement between the Company and Robert L. Russell entered into on October 1, 2007 (Filed asExhibit 10.11 to our Annual Report on Form 10-KSB filed on March 21, 2008.)10.13†+Letter Agreement dated December 16, 2008, between the Company and Robert L. Russell (Filed as Exhibit 10.14 to our Annual Reporton Form 10-K filed on February 27, 2009.) 78Table of Contents ExhibitNumberDescription10.14†+2003 Stock Option Plan of the Company (Filed as Exhibit 4.1 to our General Form for Registration of Securities of Small BusinessIssuers on Form 10-SB/A filed on May 14, 2004)10.15†+Form of Stock Option Agreement under 2003 Stock Option Plan of the Company (Filed as Exhibit 4.2 to our General Form forRegistration of Securities of Small Business Issuers on Form 10-SB/A filed on May 14, 2004)10.16†+First Amendment to 2003 Stock Option Plan of the Company, dated effective as of January 1, 2009 (Filed as Exhibit 10.17 to ourAnnual Report on Form 10-K filed on February 27, 2009.)10.17†+General Moly, Inc. 2006 Equity Incentive Plan, as Amended and Restated (Filed as Exhibit 10.1 to our Registration Statement onForm S-8 filed on May 21, 2010.)10.18†+Form of Stock Option Grant Notice and Agreement under 2006 Equity Incentive Plan of the Company (Filed as Exhibit 10.13 to ourAnnual Report on Form 10-KSB filed on April 3, 2007.)10.19†+Form of Restricted Stock Agreement under 2006 Equity Incentive Plan of the Company (Filed as Exhibit 10.14 to our Annual Reporton Form 10-KSB filed on April 3, 2007.)10.20†+Form of Non-Employee Option Award Agreement (Filed as Exhibit 99.1 to our Registration Statement on Form S-8 filed onJanuary 12, 2007.)10.21†+Form of Employee Stock Option Agreement (Filed as Exhibit 99.2 to our Registration Statement on Form S-8 filed on January 12,2007.)10.22†+Form of Stock Appreciation Right Grant Notice and Agreement under the Company’s 2006 Equity Incentive Plan (Filed asExhibit 10.3 to our Current Report on Form 8-K filed on March 5, 2009.)10.23†+Form of Restricted Stock Unit Agreement under 2006 Equity Incentive Plan of the Company (Filed as Exhibit 10.4 to our QuarterlyReport on Form 10-Q Filed on October 29, 2010.)10.24†*Molybdenum Supply Agreement between General Moly and ArcelorMittal Purchasing SAS, dated as of December 28, 2007 (Filed asExhibit 10.19 to our Annual Report on Form 10-KSB filed on March 31, 2008.)10.25†*Extension Molybdenum Supply Agreement, dated as of April 16, 2010, by and between the Company and ArcelorMittal S.A. (Filedas Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on July 30, 2010.)10.26†Contribution Agreement between Nevada Moly, LLC, a wholly-owned subsidiary of the Company (“Nevada Moly”), Eureka Moly,LLC, and POS-Minerals Corporation (Filed as Exhibit 10.20 to our Quarterly Report on Form 10-Q filed on May 7, 2008.)10.27†Amended and Restated Limited Liability Company Agreement of Eureka Moly, LLC (Filed as Exhibit 10.20 to our Quarterly Reporton Form 10-Q filed on May 7, 2008.)10.28†Amendment No. 1 to Limited Liability Company Agreement of Eureka Moly, LLC, dated as of October 28, 2008, between NevadaMoly, LLC and POS-Minerals Corporation (Filed as Exhibit 10.27 to our Annual Report on Form 10-K filed on February 27, 2009.)10.29†Amendment No. 2 to Limited Liability Company Agreement of Eureka Moly, LLC, dated as of January 20, 2010, between NevadaMoly, LLC and POS-Minerals Corporation (Filed as Exhibit 10.3 to our Current Report on Form 8-K filed on January 25, 2010.)10.30†Third Installment Election, dated as of March 3, 2010, between Nevada Moly, LLC and POS-Minerals Corporation (filed asExhibit 10.4 to our Current Report on Form 8-K filed on March 5, 2010.)10.31†Guarantee and Indemnity Agreement, dated February 26, 2008, by POSCO Canada Ltd., in favor of Nevada Moly, LLC and theCompany (Filed as Exhibit 10.20 to our Quarterly Report on Form 10-Q filed on May 7, 2008.)10.32†*Molybdenum Supply Agreement between the Company and SeAH Besteel Corporation, dated as of May 14, 2008 (Filed asExhibit 10.25 to our Quarterly Report on Form 10-Q filed on August 4, 2008.)10.33†*Molybdenum Supply Agreement between the Company and Sojitz Corporation, dated as of August 8, 2008 (Filed as Exhibit 10.26 toour Quarterly Report on Form 10-Q filed on November 3, 2008.)10.34†+Employment Agreement, dated as of October 5, 2007, between the Company and Robert I. Pennington (Filed as Exhibit 10.33 to ourAnnual Report on Form 10-K filed on February 27, 2009.)10.35†+First Amendment to Employment Agreement, dated effective as of January 1, 2009, between the Company and Robert I. Pennington(Filed as Exhibit 10.34 to our Annual Report on Form 10-K filed on February 27, 2009.)10.36†+Change of Control Severance Agreement, dated effective as of January 1, 2012, between the Company and Robert Pennington (Filedherewith.)10. 37†+Form of Stay Bonus Agreement for Bruce D. Hansen, David A. Chaput, Robert I. Pennington (Filed as Exhibit 10.1 to our CurrentReport on Form 8-K filed on May 12, 2009.)10.38†+Stay Bonus Agreement for Lee M. Shumway (Filed as Exhibit 10.48 to our Annual Report on Form 10-K filed on March 5, 2010.) 79Table of Contents ExhibitNumberDescription10.39†+Employment Agreement, dated November 6, 2007, between the Company and Lee M. Shumway (Filed as Exhibit 10.49 to ourAnnual Report on Form 10-K filed on March 5, 2010.)10.40†+Change of Control Severance Agreement, dated effective as of January 1, 2012, between the Company and Lee M. Shumway (Filedherewith.)10.41†Securities Purchase Agreement between the Company and Hanlong (USA) Mining Investment, Inc. dated March 4, 2010 (Filed asAnnex B to our Definitive Proxy Statement filed on April 6, 2010.)10.42†Amendment No. 1 to Securities Purchase Agreement dated July 30, 2010, between General Moly, Inc. and Hanlong (USA) MiningInvestment, Inc. (Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on October 29, 2010.)10.43†Amendment No. 2 to Securities Purchase Agreement dated October 26, 2010, between General Moly, Inc. and Hanlong (USA) MiningInvestment, Inc. (Filed as Exhibit 10.3 to our Registration Statement on Form S-3 filed on November 23, 2010.)10.44†Amendment No. 3 to Securities Purchase Agreement dated December 20, 2010, between General Moly, Inc. and Hanlong (USA)Mining Investment, Inc. (Filed as Exhibit 7(e) to Hanlong (USA) Mining Investment, Inc.’s Schedule 13D filed on December 30,2010.)10.45†Amendment No. 4 to Securities Purchase Agreement dated July 7, 2011, between General Moly, Inc. and Hanlong (USA) MiningInvestment, Inc. (Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on July 13, 2011.)10.46Option Agreement with respect to Securities Purchase Agreement dated January 9, 2012, between General Moly, Inc. and Hanlong(USA) Mining Investment, Inc. (Filed herewith.)10.47†Stockholder Agreement dated December 20, 2010, between General Moly, Inc. and Hanlong (USA) Mining Investment, Inc. (Filed asExhibit 10.1 to our Current Report on Form 8-K filed on December 21, 2010.)10.48†Bridge Loan Agreement dated March 4, 2010 between General Moly, Inc. and Hanlong (USA) Mining Investment, Inc. (Filed as AnnexC to our Definitive Proxy Statement filed on April 6, 2010.)10.49†Amendment No. 1 to Bridge Loan Agreement dated July 30, 2010, between General Moly, Inc. and Hanlong (USA) MiningInvestment, Inc. (Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on October 29, 2010.)10.50†Amendment No. 2 to Bridge Loan Agreement dated July 7, 2011, between General Moly, Inc. and Hanlong (USA) MiningInvestment, Inc. (Filed as Exhibit 10.2 to our Current Report on Form 8-K filed on July 13, 2011.)10.51Option Agreement with respect to Bridge Loan Agreement dated January 9, 2012, between General Moly, Inc. and Hanlong (USA)Mining Investment, Inc. (Filed herewith.)10.52†Pledge Agreement between Nevada Moly, LLC and Hanlong (USA) Mining Investment, Inc. dated March 4, 2010 (Filed as Annex Dto our Definitive Proxy Statement filed on April 6, 2010.)10.53†*Molybdenum Supply Agreement dated March 4, 2010, between General Moly, Inc, Nevada Moly, LLC, China Han Long MiningDevelopment Limited and Hanlong (USA) Mining Investment, Inc. (Filed as Exhibit 10.6 to our Quarterly Report on Form 10-Q filedon May 6, 2010.)10.54†Common Stock Purchase Warrant dated April 16, 2010, issued to CCM Qualified Master Fund, Ltd. (Filed as Exhibit 10.1 to ourCurrent Report on Form 8-K filed on April 19, 2010.)10.55†Common Stock Purchase Warrant dated April 16, 2010, issued to Coghill Capital Management, LLC. (Filed as Exhibit 10.1 to ourCurrent Report on Form 8-K filed on April 19, 2010.)10.56†Agreement to Reprice and Exercise Warrants between the Company and CCM Master Qualified Fund, Ltd. Dated December 21, 2010(Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on January 5, 2011.)10.57†Agreement to Reprice and Exercise Warrants between the Company and CCM Special Holdings Fund, LP. Dated December 21, 2010(Filed as Exhibit 10.2 to our Current Report on Form 8-K filed on January 5, 2011.)10.58†Cooperation Agreement dated August 10, 2010, between Eureka Moly, LLC and the Eureka Producers Cooperative (Filed asExhibit 10.1 to our Current Report on Form 8-K/A filed on August 26, 2010.)10.59†Employment Offer Letter dated August 17, 2010, between General Moly, Inc. and Robert Scott Roswell (Filed as Exhibit 10.60 to ourAnnual Report on Form 10-K filed on March 2, 2011.)10.60†+Change of Control Severance Agreement dated January 1, 2012, between General Moly, Inc. and Robert Scott Roswell (Filed herewith.)10.61+Separation and Release Agreement dated March 24, 2011, between General Moly, Inc. and Gregory McClain (Filed as Exhibit 10.4 toour Quarterly Report on Form 10-Q filed on May 2, 2011.)10.62†+General Release in Full of All Claims dated March 24, 2011, between General Moly, Inc. and Gregory McClain (Filed as Exhibit 10.5to our Quarterly Report on Form 10-Q filed on May 2, 2011.)10.63†+Form of Restricted Stock Unit Agreement for the Company’s 2006 Equity Incentive Plan (performance-based vesting) (Filed asExhibit 10.6 to our Quarterly Report on Form 10-Q filed on May 2, 2011.) 80Table of Contents ExhibitNumberDescription10.64†+Form of Restricted Stock Unit Agreement for the Company’s 2006 Equity Incentive Plan (tome-based vesting) (Filed as Exhibit 10.7 toour Quarterly Report on Form 10-Q filed on May 2, 2011.)10.65†+Form of Stock Appreciation Rights Grant Notice for the Company’s 2006 Equity Incentive Plan (Filed as Exhibit 10.8 to ourQuarterly Report on Form 10-Q filed on May 2, 2011.)14.1†Code of Conduct and Ethics of Idaho General Mines, Inc. adopted June 30, 2006 (Filed as Exhibit 14.1 to our Current Report onForm 8-K filed on July 7, 2006.)21.1Subsidiaries of General Moly, Inc. (Filed herewith)23.1Consent of PricewaterhouseCoopers LLP (Filed herewith)31.1Certification of CEO pursuant to Rule 13a-14(a)/15d-14(a) (Filed herewith)31.2Certification of CFO pursuant to Rule 13a-14(a)/15d-14(a) (Filed herewith)32.1Certification of CEO pursuant to Section 1350 (Furnished herewith)32.2Certification of CFO pursuant to Section 1350 (Furnished herewith)101The following XBRL (Extensible Business Reporting Language) materials are filed herewith: (i) XBRL Instance; (ii) XBRL TaxonomyExtension Schema; (iii) XBRL Taxonomy Extension Calculation; (iv) Taxonomy Extension Labels, (v) XBRL Taxonomy ExtensionPresentation, and (vi) XBRL Taxonomy Extension Definition. In accordance with Rule 406T of Regulation S-T, the information inthese exhibits is furnished and deemed not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 ofthe Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Exchange Act of 1934, and otherwise not subject toliability under these sections and shall not be incorporated by reference into any registration statement or other document filed underthe Securities Act of 1933, as amended, except as expressly set forth by the specific reference in such filing. † Previously filed as indicated and incorporated herein by reference.+ Management contract.* Confidential treatment has been granted for certain portions of this exhibit, and such confidential portions have been separately filed with the SecuritiesExchange Commission. 81Table of Contents SIGNATURES Pursuant to the requirements of the Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf bythe undersigned, thereunto duly authorized in Lakewood, Colorado on March 1, 2012. GENERAL MOLY, INC. By:/s/ Bruce D. HansenName:Bruce D. HansenTitle:Chief Executive Officer(Principal Executive Officer) Pursuant to the requirements of the Exchange Act, this report has been signed below on March 1, 2012, by the following persons, on behalf of theRegistrant, and in the capacities indicated. /s/ Bruce D. HansenChief Executive Officer and DirectorBruce D. Hansen(Principal Executive Officer) /s/ David A. ChaputChief Financial OfficerDavid A. Chaput(Principal Financial Officer) /s/ Lee M. ShumwayController and TreasurerLee M. Shumway(Principal Accounting Officer) /s/ Patrick M. JamesChairman of the BoardPatrick M. James /s/ Ricardo M. CampoyDirectorRicardo M. Campoy /s/ Mark A. LettesDirectorMark A. Lettes /s/ Gary A. LovingDirectorGary A. Loving /s/ R. David RussellDirectorR. David Russell /s/ Richard F. NannaDirectorRichard F. Nanna /s/ Gregory P. RaihDirectorGregory P. Raih /s/ Andrew G. SharkeyDirectorAndrew G. Sharkey /s/ Nelson F. ChenDirectorNelson F. Chen 82Exhibit 10.8 AMENDED AND RESTATED EMPLOYMENT AGREEMENT THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of the 1st day of January, 2012 (the“Effective Date”), between GENERAL MOLY, INC., a Delaware corporation (the “Company”), and BRUCE D. HANSEN (“Executive”). RECITALS A. The Company is in the exploration, development and mining business. B. Executive has been employed by the Company as its Chief Executive Officer (“CEO”) since January 30, 2007. C. Effective as of August 22, 2007, Idaho General Mines, Inc., the predecessor to the Company, and Executive entered into an Amended andRestated Employment Agreement, which was subsequently amended effective as of January 1, 2009, and amended further effective February 27, 2009 (the“Prior Agreement”). D. In connection with Executive’s employment with the Company, Executive has had and will continue to have access to confidential,proprietary and trade secret information of the Company and its Affiliates (as defined herein) and relating to the business of the Company and its Affiliates,which confidential, proprietary and trade secret information the Company and its Affiliates desire to protect from disclosure and unfair competition. E. The Company and Executive now desire to amend and fully restate the Prior Agreement. AGREEMENT NOW, THEREFORE, in consideration of the foregoing, and the respective covenants and promises of the parties contained herein, the Company andExecutive enter into this Agreement and agree as follows: 1. DESCRIPTION OF SERVICES. Executive shall, to the best of his ability, industriously and faithfully perform the responsibilities asCEO of the Company as specified in the Company’s by-laws and as may be prescribed from time to time by the Board of Directors of the Company (the“Board”). Executive shall devote all of his business time, attention, skill and efforts exclusively to the business and affairs of Company; provided, however,that Executive may serve on other boards as a director or trustee if such service, in the opinion of the Company, does not interfere with his ability to dischargehis duties and responsibilities to Company and is not, in the opinion of the Company, in conflict with the specific thrust of the Company’s business plan.The Executive shall report to the Board. Executive shall have charge of the day-to-day operations of the Company, and shall have full authority andresponsibility in connection therewith. Executive’s powers shall include the authority to hire and fire Company personnel except for members of the Board whoare also Company employees.  2. TERM. Subject to the provisions for early termination as hereinafter provided, Executive’s employment under the terms and conditions ofthis Agreement shall commence as of the Effective Date and shall terminate automatically on the earlier of (y) the one-year anniversary of the date on which theCompany achieves Commercial Production (as such term is defined in the Amended and Restated Limited Liability Agreement of Eureka Moly, LLC datedFebruary 26, 2008) and (z) December 31, 2015 (the “Term”), provided that if a Change of Control occurs prior to the expiration of the Term specified in thepreceding clause and the Term would otherwise expire during the one-year period immediately following the Change of Control (the “Transition Period”) as aresult of application of the preceding clause, then the Term shall end upon expiration of the Transition Period. If Executive remains employed by the Companyafter the Term has ended, then such continued employment will be based on such terms and conditions as may be established from time to time by theCompany, with no agreement or assurance under this Agreement that Executive will be entitled to any separation pay or benefits upon any termination of suchcontinued employment. 3. COMPENSATION. 3.1. Base Compensation. During the Term, base compensation shall be payable to Executive based on an annual rate determined bythe Board from time to time (“Base Compensation”). As of the Effective Date, Executive’s Base Compensation shall be Five Hundred FiftyThousand Dollars ($550,000.00). Base Compensation shall be payable bi-weekly in arrears in accordance with the Company’s regular payrollprocedures, policies and practices. Base Compensation may be reviewed and adjusted upward annually by the Board as it deems appropriate. 3.2. Incentive Compensation. (a) Incentive Cash Awards. Executive shall be eligible to receive such incentive cash awards as the Board may determinefrom time to time. All incentive cash awards shall be paid in a lump sum, on a date determined by the Company, on or before March 15 ofthe calendar year following the calendar year in which the incentive cash award is earned. (b) Equity-Based Incentives. Executive shall be eligible to receive such equity-based incentive awards from time to timeunder the Company’s 2006 Equity Incentive Plan, as may be amended from time to time (the “Equity Incentive Plan”), as the Board or theCompensation Committee of the Board determines in its discretion from time to time. (c) Cash Incentive Award for Major Financing. A cash payment of One Million Dollars ($1,000,000.00) will be paid toExecutive within forty-five (45) days of the completion of an equity and/or debt offering which raises in the discretion of the Boardsufficient capital in equity or debt to commence construction of the Mount Hope Mine and to cover costs and expenditures during theconstruction period (the “Funding”). The Board’s action to proceed with construction, based on receipt of such sufficient capital, shalltrigger payment of this Major Financing Award. Executive will 2 assist in and direct the planning for and the obtaining the Funding which, at this time, is planned to be raised during 2012 on terms to beapproved by the Board. It is understood that the portion of the Funding that is debt may be subject to conditions precedent and that therelease of the debt funds may be subject to milestones all as may be set forth in the debt transaction documents. The Funding that is debtmust be a firm written commitment, from a lending source, with conditions precedent and milestones all of which are satisfactory to andapproved by the Board. 3.. 3 Payments Subject to Deductions. All payments to Executive under Sections 3.1 and 3.2 shall be subject to the customarywithholding taxes and the other employee taxes as required by law and deductions authorized by Executive. 3.4 Business Expenses/Reimbursement of Disallowed Expenses. During the Term, the Company shall reimburse Executive for otherreasonable and necessary business expenses in connection with the performance by Executive of his duties or services hereunder, includingbusiness, entertainment and travel, subject to compliance with such policies regarding expenses and expense reimbursements as may be adoptedfrom time to time by the Company. If any compensation payment, medical reimbursement, employee fringe benefit, expense allowance payment orother expense incurred by the Company for the benefit of Executive is disallowed in whole or in part as a deductible expense of the Company forfederal or state income tax purposes for reasons other than the failure to qualify as “performance-based compensation” for purposes of CodeSection 162(m), Executive shall reimburse the Company, upon notice and demand, to the full extent of the disallowance. In lieu of payment byExecutive to the Company, Executive authorizes the Company to withhold amounts from Executive’s future compensation payments until the amountowed to the Company has been fully recovered. The Company shall not be required to legally defend any proposed disallowance and the amountrequired to be reimbursed by Executive shall be the amount, as finally determined by agreement or otherwise, which is actually disallowed as adeduction. This legally enforceable obligation is in accordance with the provisions of Revenue Ruling 69115 and is for the purpose of entitlingExecutive to a business expense deduction for the taxable year in which the repayment is made to the Company. In this manner, the Company shallbe protected from having to bear the entire burden of a disallowed expense item. 3..5 Fringe Benefits. During the Term, Executive shall be entitled to participate in the retirement and health and welfare benefits offeredgenerally by Company to its employees, to the extent that Executive’s position, tenure, salary, health, and other qualifications make Executive eligibleto participate. Executive’s participation in such benefits shall be subject to the terms of the applicable plans, as the same may be amended from timeto time. Company does not guarantee the adoption or continuance of any particular employee benefit during Executive’s employment, and nothing inthis Agreement is intended to, or shall in any way restrict the right of Company, to amend, modify or terminate any of its benefits during the Term ofthis Agreement. Executive also will be entitled to all normal and customary perquisites of employment, including 3 paid-time-off of twenty (20) days per year, available to employees of the Company at Executive’s level, subject to the stated terms and conditions ofsuch perquisites. 3.6 Indemnity. The Company agrees to indemnify Executive for acts or omissions pursuant to its current Indemnity Agreement, acopy of which has been provided to Executive. 4. TERMINATION; EFFECT OF TERMINATION. 4.1. Termination Date. Executive’s employment with the Company hereunder may be terminated as provided in Section 4.2.Executive’s “Termination Date” shall be the date Executive’s “separation from service” with the Company has occurred for purposes of Section 409Aof the Internal Revenue Code, as amended, and the regulations and guidance thereunder (“Code”). 4.2. Termination Events. (a) Termination by the Company Without Cause. The Company may terminate Executive’s employment with the Companywithout Cause upon thirty (30) days prior written notice. (b) Termination by the Company With Cause. The Company may terminate Executive’s employment with the Company atany time with Cause, without notice (except as otherwise provided herein). For the purposes of this Agreement, “Cause” means the goodfaith determination by the Board that: (i) Executive has neglected, failed or refused to perform his duties as CEO (other than as a result of physical ormental illness); (ii) Executive has failed to timely attain the goals assigned to Executive by the Company, in its good faithjudgment, from time to time; (iii) Executive has committed an act of personal dishonesty including, without limitation, an act or omissionintended to result in personal enrichment of Executive at the expense of the Company; (iv) Executive has committed a willful or intentional act that could reasonably be expected to injure the reputation,business, or business relationships of the Company or Executive’s reputation or business relationships; (v) Executive has perpetrated an intentional fraud against or affecting the Company or any customer, supplier,client, agent, or employee thereof; (vi) Executive has been convicted (including conviction on a nolo contendere, no contest, or similar plea) of afelony or any crime involving fraud, dishonesty, or moral turpitude; or 4 (vii) Executive materially breaches his obligations under Section 8 of this Agreement. With respect to any of the matters set forth in (i) or (ii) above, the Company shall give Executive notice of the deficiency and areasonable opportunity to correct the deficiency (not to exceed sixty (60) days) prior to termination. In the event that the Companyhas given notice of a deficiency and makes a determination that the deficiency has not been cured within a reasonable period oftime, Executive’s employment may be terminated for Cause. (c) Resignation By Executive Without Good Reason. Executive may terminate Executive’s employment with the Companywithout Good Reason upon ninety (90) days prior written notice to the Company, provided the Company may waive the notice period. (d) Resignation By Executive With Good Reason. Executive mayterminate Executive’s employment with the Company forGood Reason, subject to the notice and cure requirements provided below. For purposes of this Agreement, “Good Reason” means: (i) a material diminution in Executive’s base compensation: (ii) a material diminution in Executive’s authority, duties or responsibilities; (iii) a material change of more than 50 miles in the geographic location at which Executive is required to performservices (iv) any direction or requirement that Executive engage in conduct that could reasonably be construed to violatelocal, state or federal law; or (v) a material failure by the Company to pay Base Compensation due Executive pursuant to this Agreement in atimely manner. With respect to any of the matters set forth above, Executive shall provide written notice to the Company within ninety (90) daysof the initial existence of the Good Reason condition. Upon receipt of such notice, the Company shall have a period of thirty (30)days during which it may remedy the condition and not be required to pay any amount payable under Sections 4.3(b) or4.4(a) below in connection with a resignation with Good Reason. (e) Termination Due to Executive’s Disability. Executive’s employment with the Company shall terminate automaticallyupon the inability of Executive to satisfactorily perform the duties set forth in Section 1 or as assigned 5 to him by the Company from time to time by reason of mental or non-industrial physical illness or injury for a period of one hundredeighty (180) consecutive days (“Disability”). (f) Termination Due to Executive’s Death. Executive’s employment with the Company shall terminate automatically uponhis death. (g) Wind Up Activities. Following any notice of termination required under this Section 4.2, the Company and Executiveshall cooperate with each other in all matters relating to the winding up of Executive’s work on behalf of the Company. 4.3. Payments Upon Termination of Employment Prior to a Change of Control or After The Expiration of the Transition Period. (a) Involuntary Termination By The Company Without Cause Prior To a Change of Control or After the Expiration of theTransition Period. If Executive’s Termination Date occurs (y) during the Term, and (z) prior to a Change of Control or after the expiration ofthe Transition Period, and if such termination is involuntary at the initiative of the Company without Cause, then, in addition to such BaseCompensation that has been earned but not paid to Executive as of the Termination Date, and in consideration of Executive’s obligationsunder Section 8.2 below, the Company shall provide to Executive the payments set forth in this Section 4.3(a), subject to the conditionsdescribed in Section 4.5: (i) Separation Pay. The Company shall pay to Executive an amount equal to two times Executive’s BaseCompensation as of the Termination Date payable to Executive in approximately equal installments over twelve (12) months,with such period commencing on the first normal payroll date of the Company after the Termination Date and continuingthereafter in accordance with the Company’s regular payroll schedule, but in no event shall such amount paid under thisSection 4.3(a)(i) exceed the lesser of two times (A) the limit of compensation set forth in section 401(a)(17) of the Code as in effectfor the year in which the Termination Date occurs, or (B) Executive’s annualized compensation based upon the annual rate of payfor services to the Company for the calendar year prior to the calendar year in which the Termination Date occurs (adjusted forany increase during that year that was expected to continue indefinitely if the Employee had not separated from service). TheCompany and Executive intend the payments under this Section 4.3(a)(i) to be a “separation pay plan due to involuntaryseparation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii). (ii) Make-up Payment. In the event that Executive’s separation pay under Section 4.3(a)(i) above is limited byapplication of clause (A) or (B) thereof, then the Company shall make an additional lump sum 6 payment to Executive equal to the difference between (x) two times Executive’s Base Compensation as of the Termination Date and(y) the amount payable to Executive under Section 4.3(a)(i). Such lump sum payment shall be paid to Executive no later than sixty(60) days following the Termination Date, provided that Executive has satisfied the conditions described in Section 4.5. TheCompany and Executive intend the payment under this Section 4.3(a)(ii) to be a short-term deferral under Treas. Reg. § 1.409A-1(b)(4). (b) Resignation By Executive For Good Reason Prior To a Change of Control. If Executive’s Termination Date occurs(y) during the Term, and (z) prior to a Change of Control or after the expiration of the Transition Period, and if such termination is theresult of Executive’s resignation for Good Reason, then, in addition to such Base Compensation that has been earned but not paid toExecutive as of the Termination Date, and in consideration of Executive’s obligations under Section 8.2 below, the Company shall provideto Executive the payments set forth in this Section 4.3(b), subject to the conditions described in Section 4.5: (i) Separation Pay. The Company shall pay to Executive an amount equal to one times Executive’s BaseCompensation as of the Termination Date payable to Executive in approximately equal installments over twelve (12) months,with such period commencing on the first normal payroll date of the Company after the Termination Date and continuingthereafter in accordance with the Company’s regular payroll schedule, but in no event shall such amount paid under thisSection 4.3(b)(i) exceed the lesser of two times (A) the limit of compensation set forth in section 401(a)(17) of the Code as in effectfor the year in which the Termination Date occurs, or (B) Executive’s annualized compensation based upon the annual rate of payfor services to the Company for the calendar year prior to the calendar year in which the Termination Date occurs (adjusted forany increase during that year that was expected to continue indefinitely if the Employee had not separated from service). TheCompany and Executive intend the payments under this Section 4.3(b)(i) to be a “separation pay plan due to involuntaryseparation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii). (ii) Make-up Payment. In the event that Executive’s separation pay under Section 4.3(b)(i) above is limited byapplication of clause (A) or (B) thereof, then the Company shall make an additional lump sum payment to Executive equal to thedifference between (x) one times Executive’s Base Compensation as of the Termination Date and (y) the amount payable toExecutive under Section 4.3(b)(i). Such lump sum payment shall be paid to Executive no later than sixty (60) days following theTermination Date, provided that Executive has satisfied the conditions described in Section 4.5. The Company and Executiveintend the payment 7 under this Section 4.3(b)(ii) to be a short-term deferral under Treas. Reg. § 1.409A-1(b)(4). (c) Other Termination Prior to a Change of Control or After Expiration of the Transition Period. If Executive’s TerminationDate occurs (y) during the Term, and (z) prior to a Change of Control or after the expiration of the Transition Period, and is the result of: (i) Executive’s abandonment of or resignation from employment for any reason other than Good Reason; (ii) termination of Executive’s employment by the Company for Cause; or (iii) Executive’s death or Disability; then the Company will pay to Executive, or Executive’s beneficiary or Executive’s estate, as the case may be, such BaseCompensation that has been earned but not paid to Executive as of the Termination Date, payable pursuant to the Company’snormal payroll practices and procedures, and Executive shall not be entitled to any additional compensation or benefits providedunder this Section 4. 4.4. Payments Upon Termination of Employment During the Transition Period. (a) Involuntary Termination By The Company Without Cause or Resignation by Executive for Good Reason During theTransition Period. If Executive’s Termination Date occurs during the Transition Period, and if such termination is involuntary at theinitiative of the Company without Cause or is the result of Executive’s resignation for Good Reason, then, in addition to such BaseCompensation that has been earned but not paid to Executive as of the Termination Date, and in consideration of Executive’s obligationsunder Section 8.2 below, the Company shall provide to Executive the payments set forth in this Section 4.4(a), subject to the conditionsdescribed in Section 4.5: (i) Lump Sum Separation Pay. The Company shall pay to Executive an amount equal to (A) 100% of Executive’starget annual incentive award for one year (as in effect immediately prior to the closing of the Change of Control), if any, plus(B) if not paid previously, an amount equal to the Major Financing Award set forth in Section 3.2 (c), less applicablewithholdings, payable to Executive in a lump sum no later than sixty (60) days following the Termination Date, provided thatExecutive has satisfied the conditions described in Section 4.5. The Company and Executive intend the payment under thisSection 4.4(a)(i) to be a short-term deferral under Treas. Reg. § 1.409A-1(b)(4). 8 (ii) Additional Separation Pay. The Company shall pay to Executive an amount equal to three times Executive’sBase Compensation as of the Termination Date payable to Executive in approximately equal installments over twelve (12)months, with such period commencing on the first normal payroll date of the Company after the Termination Date and continuingthereafter in accordance with the Company’s regular payroll schedule, but in no event shall such amount paid under thisSection 4.4(a)(ii) exceed the lesser of two times (A) the limit of compensation set forth in section 401(a)(17) of the Code as in effectfor the year in which the Termination Date occurs, or (B) Executive’s annualized compensation based upon the annual rate of payfor services to the Company for the calendar year prior to the calendar year in which the Termination Date occurs (adjusted forany increase during that year that was expected to continue indefinitely if the Employee had not separated from service). TheCompany and Executive intend the payments under this Section 4.4(a)(ii) to be a “separation pay plan due to involuntaryseparation from service” under Treas. Reg. § 1.409A1(b)(9)(iii). (iii) Make-up Payment. In the event that Executive’s separation pay under Section 4.4(a)(ii) above is limited byapplication of clause (A) or (B) thereof, then the Company shall make an additional lump sum payment to Executive equal to thedifference between (x) three times Executive’s Base Compensation as of the Termination Date and (y) the amount payable toExecutive under Section 4.4(a)(ii). Such lump sum payment shall be paid to Executive no later than sixty (60) days following theTermination Date, provided that Executive has satisfied the conditions described in Section 4.5. The Company and Executiveintend the payment under this Section 4.4(a)(iii) to be a short-term deferral under Treas. Reg. § 1 .409A-1 (b)(4). (b) Other Termination During the Transition Period. If Executive’s Termination Date occurs during the Transition Periodand is the result of: (i) Executive’s abandonment of or resignation from employment for any reason other than Good Reason; (ii) termination of Executive’s employment by the Company for Cause; or (iii) Executive’s death or Disability; then the Company will pay to Executive, or Executive’s beneficiary or Executive’s estate, as the case may be, such BaseCompensation that has been earned but not paid to Executive as of the Termination Date, payable pursuant to the Company’snormal payroll practices and procedures, and 9 Executive shall not be entitled to any additional compensation or benefits provided under this Section 4. 4.5 Separation Pay Conditions. Notwithstanding anything above to the contrary, the Company will not be obligated to make anypayments to Executive under Section 4.3(a), Section 4.3(b) or Section 4.4(a) unless: (i) Executive has signed a release of claims in favor of theCompany and its Affiliates and related entities, and their directors, officers, insurers, employees and agents, in a form prescribed by the Company;(ii) all applicable rescission periods provided by law for releases of claims have expired and Executive has not rescinded the release of claims; and(iii) Executive is in strict compliance with the terms of this Agreement and any other written agreements between the Company and Executive as of thedates of such payments. Any payments scheduled to be paid to Executive pursuant to Section 4.3(a), Section 4.3(b) or Section 4.4(a) on payroll datesoccurring before the conditions set forth in clauses (i) and (ii) of this Section 4.5 are satisfied shall be held and paid to Executive as soon aspracticable following satisfaction of such conditions. 4.6 Section 409A; Deferred Compensation. (a) Delay in Payment. Notwithstanding anything in the Agreement to the contrary, if Executive is deemed by the Companyat the time of Executive’s “separation from service” with the Company to be a “specified employee” under Section 409A of the Code, thenany non-exempt deferred compensation which would otherwise be payable hereunder shall not be paid until the date which is the firstbusiness day following the six-month period after Executive’s separation from service (or if earlier, Executive’s death). Such delay inpayment shall only be effected with respect to each separate payment of non-exempt deferred compensation to the extent required to avoidadverse tax treatment to Executive under Section 409A. Any payments or benefits not subject to such delay, shall be paid pursuant to thetime and form of payment specified above. Any compensation which would have otherwise been paid during the delay period shall be paidto Executive (or his beneficiary or estate) in a lump sum payment on the first business day following the expiration of the delay period. (b) Interpretation. The parties intend that all payments or benefits payable under the Agreement will not be subject to theadditional tax imposed by Section 409A of the Code, and the provisions of the Agreement shall be construed and administered consistentwith such intent. To the extent such potential payments could become subject to Section 409A of the Code, the Company and Executiveagree to work together to modify the Agreement to the minimum extent necessary to reasonably comply with the requirements ofSection 409A of the Code, provided that the Company shall not be required to provide any additional compensation amounts or benefitsand Executive shall be responsible for payment of any and all taxes owed in connection with the consideration provided for underSection 4.3(a), Section 4.3(b) or Section 4.4(a) of this Agreement. 10 5. CHANGE OF CONTROL. 5.. 1 Definition. For purposes of this Agreement, “Change of Control” means: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities ExchangeAct of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under theExchange Act) of 50% or more of either (A) the then-outstanding shares of common stock of the Company (the “Outstanding Company CommonStock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election ofdirectors (the “Outstanding Company Voting Securities”); provided, however, that, for purposes of this Section 5.1(a), the following acquisitionsshall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, or (iii) any acquisitionby any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate; or (b) Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involvingthe Company or the acquisition of assets or stock of another entity by the Company (each, a “Business Combination”), in each case unless,following such Business Combination, (i) all or substantially all of the individuals and entities that were the beneficial owners of the OutstandingCompany Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own,directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding votingsecurities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination(including, without limitation, a corporation that, as a result of such transaction, owns the Company or all or substantially all of the Company’sassets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to suchBusiness Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, and(ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Companyor such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 50% or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination; or (c) Individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Incumbent Board”) cease for anyreason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whoseelection, or nomination 11 for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shallbe considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initialassumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual orthreatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (d) A sale or disposition of all or substantially all of the operating assets of the Company to an unrelated party; or (e) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. 5.2 Parachute Payment Restrictions. (a) If any payments or benefits (including payments and benefits pursuant to this Agreement or under other compensatoryarrangements involving the Executive, including equity-based incentive awards (the “other arrangements”)) in the nature of compensation that theExecutive would receive in connection with a change in the ownership or effective control of the Company or in the ownership of a substantial portionof the assets of the Company (collectively, “Transaction Payments”) would collectively constitute a “parachute payment” within the meaning ofSection 280G of the Code, and if the “net after-tax amount” of such parachute payment to the Executive is less than what the net after-tax amount tothe Executive would be if the Transaction Payments otherwise constituting the parachute payment were limited to the maximum “parachute value” ofTransaction Payments that the Executive could receive without giving rise to any liability for any excise tax imposed by Section 4999 of the Code(the “Excise Tax”), then the Transaction Payments otherwise constituting the parachute payment shall be reduced so that the parachute value of allTransaction Payments, in the aggregate, will equal the maximum parachute value of all Transaction Payments that the Executive can receive withoutany Transaction Payments being subject to the Excise Tax. Should such a reduction in Transaction Payments be required, the Executive shall beentitled, subject to the following sentence, to designate those Transaction Payments under this Agreement or the other arrangements that will bereduced or eliminated so as to achieve the specified reduction in Transaction Payments to the Executive and avoid characterization of suchTransaction Payments as a parachute payment. The Company will provide the Executive with all information reasonably requested by the Executiveto permit the Executive to make such designation. To the extent that the Executive’s ability to make such a designation would cause any of theTransaction Payments to become subject to any additional tax under Code Section 409A, or if the Executive fails to make such a designation withinten business days of receiving the requested information from the Company, then the Company shall achieve the necessary reduction in theTransaction Payments by reducing them in the following order: (i) reduction of cash payments payable under this 12 Agreement; (ii) reduction of other payments and benefits to be provided to the Executive; (iii) cancellation or reduction of accelerated vesting of equity-based awards that are subject to performance-based vesting conditions; and (iv) cancellation or reduction of accelerated vesting of equity-basedawards that are subject only to service-based vesting conditions. If the acceleration of the vesting of Executive’s equity-based awards is to be cancelledor reduced, such acceleration of vesting shall be reduced or cancelled in the reverse order of the date of grant. For purposes of this Section 5.2, a “netafter-tax amount” shall be determined by taking into account all applicable income, excise and employment taxes, whether imposed at the federal,state or local level, including the Excise Tax, and the “parachute value” of a Transaction Payment means the present value as of the date of theChange of Control for purposes of Section 280G of the Code of the portion of such Transaction Payment that constitutes a parachute payment underSection 280G(b)(2) of the Code. (b) The independent registered public accounting firm engaged by the Company for general audit purposes as of the day prior to theeffective date of the Change of Control may be utilized by the Compensation Committee to make all determinations required to be made under thisSection 5.2. If the independent registered public accounting firm so engaged by the Company is serving as accountant or auditor for the individual,entity or group effecting the Change of Control, the Compensation Committee may appoint another nationally recognized independent registeredpublic accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations byany such independent registered public accounting firm retained hereunder. Any good faith determinations of the accounting firm made hereundershall be final, binding and conclusive upon the Company and Executive. 5..3 Effect of Change of Control on Equity Awards. Notwithstanding anything to the contrary in any award agreement pursuant to which anequity-based compensation award has been made to Executive, the effect of a Change of Control (as defined in the Equity Incentive Plan) on any equity-basedcompensation award granted to Executive during the Term of this Agreement or the term of the Prior Agreement shall be as provided in Section 12(c) of theEquity Incentive Plan. If and to the extent the vesting and exercisability of any such equity-based compensation award has not already been accelerated in fullin connection with a Change of Control, as contemplated by clause (ii) of Section 12(c) of the Equity Incentive Plan, then the vesting and exercisability of anysuch award shall be accelerated in full if Executive’s Termination Date occurs during the Transition Period under the circumstances described in 4.4(a) of thisAgreement. 6. DISCLOSURE OF INFORMATION. 6.1. Executive acknowledges that he has received and will continue to receive access to non-public, confidential and proprietary businessinformation and trade secrets about the Company and its Affiliates (“Confidential Information”), that this Confidential Information was and will be obtainedor developed by the Company at great expense and 13 is zealously guarded by the Company from unauthorized disclosure, and that Executive’s possession of this Confidential Information is due solely toExecutive’s employment with the Company. In recognition of the foregoing, Executive will not at any time during employment or following termination ofemployment for any reason, disclose, use or make otherwise available to any third party any Confidential Information relating to the Company’s or any of itsAffiliates’ business, including their products, production methods and development; manufacturing and business methods and techniques; trade secrets,data, specifications, developments, inventions, engineering and research activity; marketing and sales strategies, information and techniques; long and shortterm plans; current and prospective dealer, customer, vendor, supplier and distributor lists, contacts and information; financial, personnel and informationsystem information; and any other information concerning the business of the Company or its Affiliates. During the term of Executive’s employment with theCompany and at all times thereafter, Executive shall take reasonable steps to protect the confidentiality of Confidential Information and shall refrain from anyacts or omissions that would reduce the value of Confidential Information to the Company or any of its Affiliates. Executive’s foregoing obligations regardingConfidential Information do not apply to any knowledge or information to the extent that it (i) is now or subsequently becomes generally publicly known orgenerally known in the industry in which the Company operates in the form in which it was obtained from the Company (or its applicable Affiliate), (ii) isindependently made available to Executive in good faith by a third party who has not violated an obligation of confidentiality to the Company or any of itsAffiliates, or (iii) is required by law to be disclosed (but only to the extent such disclosure is required). In the latter event, Executive shall disclose to theCompany the event and authority requiring disclosure “required by law” at the first opportunity upon learning of the disclosure request. Nothing contained inthe preceding sentence shall be interpreted to legitimize any disclosure of Confidential Information by Executive that occurs outside of any of the eventsdescribed in items (i) through (iii) above. The parties acknowledge and agree that Executive’s obligations under this Section 6 to maintain the confidentiality ofthe Confidential Information are in addition to any obligations of Executive under applicable statutory or common law. 6.2. Upon termination of employment with the Company, Executive shall deliver to a designated Company representative all records,documents, hardware, software, and all other property of the Company or any of its Affiliates in whatever form and all copies thereof in Executive’spossession. Executive acknowledges and agrees that all such materials are the sole property of the Company or its Affiliates and that Executive will certify inwriting to the Company at the time of termination that Executive has complied with this obligation. 6.3 For purposes of this Section 6 and this entire Agreement, Affiliate” means an individual, a partnership, a corporation, a limited liabilitycompany, an association, a joint stock company, a trust, a joint venture, or an unincorporated organization, that directly, or indirectly through one or moreintermediaries, controls, or is controlled by, or is under common control with, the Company. 6.4 Executive acknowledges that Confidential Information constitutes a 14 unique and valuable asset of the Company and its Affiliates and represents a substantial investment of time and expense by the Company and its Affiliates.Executive further acknowledges that the provisions of this Section 6 are reasonable and necessary to protect the legitimate interests of the Company and itsAffiliates, and that any violation of this Section 6 by Executive would cause substantial and irreparable harm to the Company and its Affiliates to such anextent that monetary damages alone would be an inadequate remedy. Therefore, in the event that Executive violates any provision of this Section 6, theCompany and its Affiliates shall be entitled to immediate injunctive relief (without the necessity of proving actual damages or posting bond, or if a bond isrequired, a bond in the amount of $1,000 is deemed sufficient), in addition to all the other remedies it or they may have, restraining Executive from violatingor continuing to violate such provision. 7. DISCLOSURE AND ASSIGNMENT OF INVENTIONS. 7.1. Executive agrees to promptly disclose to the Company inventions, ideas, processes, writings, designs, developments and improvements,whether or not protectable under the applicable patent, trademark or copyright statutes, which Executive has made, conceived, reduced to practice or learnedduring his employment with the Company or which Executive makes, conceives, reduces to practice or learns during the period of employment by Company,either alone or jointly with others, relating to any business in which the Company, during the period of Executive’s employment, has been, is or may beconcerned (“the Inventions”). Such disclosures shall be made by Executive to the Company in a written report, setting forth in detail the structures, proceduresand methodology employed and the results achieved. 7.2. Consistent with and to the extent permitted by applicable law, Executive hereby assigns and agrees to assign to the Company all rights inand to the Inventions and proprietary rights therein, based thereon or related thereto, including, but not limited to, applications for United States and foreignpatents and resulting patents. 7.3. Executive further agrees, without charge to the Company but at its expense, to assist the Company in every proper way and execute,acknowledge and deliver, during and after employment by the Company, all such documents necessary and perform such other legal acts as may benecessary, in the opinion of the Company, to obtain or maintain United States or foreign patents or other proprietary protection, for any and all Inventionsmade during his employment by the Company in any and all countries, and to vest title therein to the Company. 7.4. Executive acknowledges notice from the Company that this foregoing obligation to assign rights in and to any Inventions does not apply toan Invention for which no equipment, supplies, facility or trade secret information of Company was used and which was developed entirely on Executive’sown time and (y) which does not relate (A) directly to the business of the Company, or (B) to the Company’s actual or demonstrably anticipated research ordevelopment; or (z) which does not result from any work performed by Executive for the Company. 15 7.5. Executive further agrees that prior to separation from employment with the Company for any reason, Executive shall disclose to theCompany, in a written report, all Inventions, the rights to which Executive has agreed to assign to the Company under Sections 7.1 and 7.2 above, and whichExecutive has not previously disclosed. 8. RESTRICTIVE COVENANTS. 8.1. Non-Solicitation. (a) Executive specifically acknowledges that the Confidential Information described in Section 6.1 includes confidential and tradesecret data pertaining to current and prospective customers of the Company, that such data is a valuable and unique asset of the Company’sbusiness and that the success or failure of the Company’s specialized business is dependent in large part upon the Company’s ability to establishand maintain close and continuing personal contacts and working relationships with such customers and to develop proposals which are specificallydesigned to meet the requirements of such customers. Therefore, during Executive’s employment with the Company and for the twelve (12) monthsfollowing termination of employment for any reason, except on behalf of the Company or with the Company’s prior written consent, Executive isprohibited from soliciting, either directly or indirectly, on his own behalf or on behalf of any other person or entity, all such customers with whomExecutive had contact during the twenty-four (24) months preceding Executive’s termination of employment. (b) Executive specifically acknowledges that the Confidential Information described in Section 6.1 also includes confidential andtrade secret data pertaining to current and prospective employees and agents of the Company, and Executive further agrees that during Executive’semployment with the Company and for the twelve (12) months following termination of employment for any reason, Executive will not directly orindirectly solicit, on his own behalf or on behalf of any other person or entity, the services of any person who is an employee or agent of theCompany or solicit any of the Company’s employees or agents to terminate their employment or agency with the Company. (c) Executive specifically acknowledges that the Confidential Information described in Section 6.1 also includes confidential andtrade secret data pertaining to current and prospective vendors and suppliers of the Company, Executive agrees that during Executive’s employmentwith the Company and for the twelve (12) months following termination of employment for any reason, Executive will not directly or indirectlysolicit, on his own behalf or on behalf of any other person or entity, any Company vendor or supplier for the purpose of either providing products orservices to competitors of the Company, as described in Section 8.2(b), or terminating such vendor’s or supplier’s relationship or agency with theCompany. 16 (d) Executive further agrees that, during Executive’s employment with the Company and for the twelve (12) months followingtermination of employment for any reason, Executive will do nothing to interfere with any of the Company’s business relationships. 8.2. Non-Competition. (a) Executive represents to the Company that Executive is not a party to any agreement with a prior employer or otherwise whichwould prohibit Executive from employment with the Company. Executive further represents that he has provided to the Company copies of any andall agreements (e.g., non-competition, non-solicitation, or non-disclosure agreements) that might limit Executive’s ability, in any way, to perform theduties of Executive’s position on behalf of the Company, and Executive agrees to act at all times on behalf of the Company in a manner consistentwith any such agreements. Executive acknowledges and understands that the Company will have no obligation to provide legal representation toExecutive in the event a prior employer or other third party brings or threatens to bring an action against Executive for violating any such agreements;that the Company may elect, at its sole discretion, to provide legal representation to Executive but Executive may be required to reimburse theCompany for any legal expenses paid on Executive’s behalf in the event Executive is found to have violated any such agreements; and that Executivemay be terminated in the event the Company determines that Executive may have violated any such agreements. Despite anything to the contraryherein, termination based upon the Company’s determination that Executive has violated this Section 8.2 shall be considered termination for Cause. (b) Executive covenants and agrees that during Executive’s employment with the Company and for the twenty-four (24) monthsfollowing termination of employment for any reason, he will not, in any state in which Executive worked on behalf of the Company or in any state orcountry where the Company has a material ownership or possessory interest in molybdenum, engage in or carry on, directly or indirectly, as anowner, employee, agent, associate, consultant or in any other capacity, a business competitive with that conducted by the Company. A “businesscompetitive with that conducted by the Company” shall mean any business or activity involved in the discovery or mining of molybdenum or anysimilar ore with properties for strengthening or hardening steel, or any other ore with which the Company is in the business of discovering or miningat the time of Executive’s termination. To “engage in or carry on” shall mean to have ownership in such business or consult, work in, direct or haveresponsibility for any area of such business, including but not limited to the following areas: operations, sales, marketing, manufacturing,procurement or sourcing, purchasing, customer service, distribution, product planning, research, design or development. (c) For the twelve (12) months following termination of employment for any reason, Executive certifies and agrees that he will notifythe Chairman of 17 the Board of the Company of his employment or other affiliation with any potentially competitive business or entity prior to thecommencement of such employment or affiliation. 8..3 Executive acknowledges that the provisions of this Section 8 are reasonable and necessary to protect the legitimate interests of theCompany and its Affiliates, including without limitation trade secrets, customer and supplier relationships, goodwill and loyalty, and that anyviolation of this Section 8 by Executive would cause substantial and irreparable harm to the Company and its Affiliates to such an extent thatmonetary damages alone would be an inadequate remedy. Therefore, in the event that Executive violates any provision of this Section 8, theCompany and its Affiliates shall be entitled to immediate injunctive relief (without the necessity of proving actual damages or posting bond, or if abond is required, a bond in the amount of $1,000 is deemed sufficient), in addition to all the other remedies it or they may have, restrainingExecutive from violating or continuing to violate such provision. 8.4 If the duration of, the scope of or any business activity covered by any provision of this Section 8 is in excess of what is validand enforceable under applicable law, such provision shall be construed to cover only that duration, scope or activity that is valid and enforceable.Executive and the Company agree that this Section 8 shall be given the construction which renders its provisions valid and enforceable to themaximum extent, not exceeding its express terms, possible under applicable law. 9. NOTICES. Any notice, consent, approval, request, demand or other communication required or permitted hereunder must be in writingto be effective and shall be deemed delivered and received (i) if personally delivered or if delivered by telex or telecopy with electronic confirmation whenactually received by the party to whom sent, or (ii) if delivered by mail (whether actually received or not), at the close of business on the fifth business daynext following the day when placed in the federal mail, postage prepaid, certified or registered mail, return receipt requested, addressed as follows: If to Executive:Bruce D. Hansen22284 Anasazi WayGolden, CO 80401-8065 If to Employer:General Moly, Inc.Attn: Corporate Counsel — Vice President Human Resources 1726 Cole Blvd, Suite 115Lakewood, CO 80401 Copy to:Faegre & Benson, LLPAttn: John Haverman200 Wells Fargo Center90 South 7 StreetMinneapolis, MN 55402-3901 18th (or to such other address as any party shall specify by written notice so given). 10. LEGAL REQUIREMENTS. Executive represents and warrants that, during the Term (and thereafter for so long as Executive remains anemployee of the Company), Executive shall use his best efforts to comply in all material respects with, and shall use his best efforts, within the scope of hisduties to comply with all legal requirements imposed by environmental laws imposed by any local, state or federal authority and the rules and regulationspromulgated by any such entity. For the purposes of this Agreement, environmental law shall mean all local, state or federal law, now or hereafter existing, thatrelate to health, safety or environmental protection. Executive shall use his best efforts to comply in all material respects with, and shall use his best efforts,within the scope of his duties, to cause the Company to comply with, all other applicable laws and regulations governing the Company including, withoutlimitation, all environmental laws and regulations. 11. NO IMPLIED WAIVERS. Neither party shall waive any breach of any provision of this Agreement except in writing, and any waiver sogranted in any single instance shall not thereby be deemed to be a waiver of any preceding or succeeding breach of the same or any other provision of thisAgreement. 12. HEADINGS. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof, norto affect the meaning thereof. 13. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and construed under Colorado law, without regard to itsconflict of laws principles. The parties agree that any litigation in any way relating to this Agreement shall be venued in either federal or state court in JeffersonCounty, Colorado, and Executive hereby consents to the personal jurisdiction of these courts and waives any objection that such venue is inconvenient orimproper. 14. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, EXECUTIVE AND COMPANY HEREBYIRREVOCABLY AND EXPRESSLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, ORENFORCEMENT THEREOF. 15. EXECUTIVE’S RIGHT TO RECOVER ATTORNEYS’ FEES AND COSTS. In the event of any litigation concerning any controversy,claim or dispute between the parties hereto, arising out of or relating to this Agreement, the breach hereof or the interpretation hereof, Executive will be entitled torecover from the Company Executive’s reasonable expenses, attorneys’ fees, and costs incurred therein or in the enforcement or collection of any judgment oraward rendered therein if (and only if) Executive is the prevailing party. The “prevailing party” means the party determined by the court to have most nearlyprevailed, even if such party did not prevail in all matters, not necessarily the party in whose favor a judgment is rendered. 16. COMPLETE AGREEMENT - AMENDMENTS - PRIOR AGREEMENTS. The foregoing is the entire agreement of the parties withrespect to the subject matter hereof, 19 excepting those documents identified herein to be signed by the Executive and the Company, and may not be amended, supplemented, canceled or dischargedexcept by written instrument executed by both parties hereto. This Agreement supersedes any and all prior agreements among the Company and Executive withrespect to the matters covered herein, including without limitation the Prior Agreement. 17. INVALIDITY. The invalidity or lack of enforceability of any particular provision in this Agreement shall not affect the other provisionshereof, and this Agreement shall be construed in all other respects as though such invalid or unenforceable provisions were permitted. Moreover, the partiesagree to replace or have a Court replace such invalid provisions with a substitute provision that will satisfy the intent of the parties. 18. SURVIVAL. Upon the expiration or termination of this Agreement for any reason, the provisions of this Section and the covenants of theparties herein shall survive and remain in full force and effect. 19. BINDING OBLIGATIONS. The Executive and the Company acknowledge and understand that, unless expressly stated above,Executive’s obligations hereunder shall not be affected by the reasons for, circumstances of, or identity of the party who initiates the termination of Executive’semployment with the Company. 20. FORFEITURE AND COMPENSATION RECOVERY. 20.1 Forfeiture Conditions. Notwithstanding anything to the contrary in this Agreement, if the Executive breaches any of therestrictions applicable to the Executive under Section 8 of this Agreement after Executive’s Termination Date, then (i) the Executive shall immediatelyforfeit his right to receive any separation pay under Sections 4.3(a), 4.3(b) or 4.4(a) of this Agreement, and to the extent any portion of such paymentshas been received, the Executive will be required to repay to the Company the amount of such payments previously received. 20.2 Compensation Recovery Policy. To the extent that any compensation provided pursuant to this Agreement is considered“incentive-based compensation” within the meaning and subject to the requirements of Section 10D of the Securities Exchange Act of 1934 (the“Exchange Act”), any such compensation shall be subject to potential forfeiture or recovery by the Company in accordance with any compensationrecovery policy adopted by the Board or its Compensation Committee in response to the requirements of Section 10D of the Exchange Act and anyimplementing rules and regulations thereunder adopted by the Securities and Exchange Commission or any national securities exchange on which theCompany’s common stock is then listed. This Agreement may be unilaterally amended by the Company to comply with any such compensationrecovery policy. 20 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates set forth below, effective as of the Effective Date first setforth above. COMPANY: GENERAL MOLY, INC. By:/s/ R. Scott Roswell Its:Corporate Counsel-VP, Human Resources Execute:/s/ Bruce D. HansenBruce D. Hansen 21Exhibit 10.9 AMENDED AND RESTATED EMPLOYMENT AGREEMENT THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of the 1st day of January, 2012 (the“Effective Date”), between GENERAL MOLY, INC., a Delaware corporation (the “Company”), and DAVID A. CHAPUT (“Executive”). RECITALS A. The Company is in the exploration, development and mining business. B. Executive has been employed by the Company as its Chief Financial Officer (“CFO”) since April 25, 2007. C. Effective as of April 25, 2007, Idaho General Mines, Inc., the predecessor to the Company, and Executive entered into an Amended andRestated Employment Agreement, which was subsequently amended effective as of January 1, 2009, and amended further effective February 27, 2009 (the“Prior Agreement”). D. In connection with Executive’s employment with the Company, Executive has had and will continue to have access to confidential,proprietary and trade secret information of the Company and its Affiliates (as defined herein) and relating to the business of the Company and its Affiliates,which confidential, proprietary and trade secret information the Company and its Affiliates desire to protect from disclosure and unfair competition. E. The Company and Executive now desire to amend and fully restate the Prior Agreement. AGREEMENT NOW, THEREFORE, in consideration of the foregoing, and the respective covenants and promises of the parties contained herein, the Company andExecutive enter into this Agreement and agree as follows: 1. DESCRIPTION OF SERVICES. Executive shall, to the best of his ability, industriously and faithfully perform the responsibilities asCFO of the Company as specified in the Company’s by-laws and as may be prescribed from time to time by the Company’s Chief ExectutiveOfficer (the “CEO”) or the Board of Directors of the Company (the “Board”). Executive shall devote all of his business time, attention, skill andefforts exclusively to the business and affairs of the Company; provided, however, that Executive may serve on other boards as a director or trusteeif such service, in the opinion of the Company, does not interfere with his ability to discharge his duties and responsibilities to Company and is not,in the opinion of the Company, in conflict with the specific thrust of the Company’s business plan. The Executive shall report to the CEO. Executive’s specific responsibilities and duties may be changed from time to time by the Company but he shall be primarily responsible for allaspects of the financial affairs of the Company, including, without limitation, financial reports and analysis, tax reporting and compliance, budgetpreparation, general accounting, payroll, billing, 1 accounts payable, credit and collections, fixed asset and cash management, insurance, employee benefit programs, information systems, general officeadministration and management and supervision of staff assigned to report to Executive. The Company may also establish goals for the Company and/or forExecutive from time to time which Executive will be responsible to attain. 2. TERM. Subject to the provisions for early termination as hereinafter provided, Executive’s employment under the terms and conditions ofthis Agreement shall commence as of the Effective Date and shall terminate automatically on the earlier of (y) the one-year anniversary of the date onwhich the Company achieves Commercial Production (as such term is defined in the Amended and Restated Limited Liability Agreement of EurekaMoly, LLC dated February 26, 2008) and (z) December 31, 2015 (the “Term”), provided that if a Change of Control occurs prior to the expiration ofthe Term specified in the preceding clause and the Term would otherwise expire during the one-year period immediately following the Change ofControl (the “Transition Period”) as a result of application of the preceding clause, then the Term shall end upon expiration of the Transition Period.If Executive remains employed by the Company after the Term has ended, then such continued employment will be based on such terms andconditions as may be established from time to time by the Company, with no agreement or assurance under this Agreement that Executive will beentitled to any separation pay or benefits upon any termination of such continued employment. 3. COMPENSATION. 3.1. Base Compensation. During the Term, base compensation shall be payable to Executive based on an annual rate determined bythe Board from time to time (“Base Compensation”). As of the Effective Date, Executive’s Base Compensation shall be Three Hundred TwelveThousand Seven Hundred Dollars ($312,700.00). Base Compensation shall be payable bi-weekly in arrears in accordance with the Company’sregular payroll procedures, policies and practices. Base Compensation may be reviewed and adjusted upward annually by the Board as it deemsappropriate. 3.2. Incentive Compensation. (a) Incentive Cash Awards. Executive shall be eligible to receive such incentive cash awards as the Board may determinefrom time to time. All incentive cash awards shall be paid in a lump sum, on a date determined by the Company, on or before March 15 ofthe calendar year following the calendar year in which the incentive cash award is earned. (b) Equity-Based Incentives. Executive shall be eligible to receive such equity-based incentive awards from time to timeunder the Company’s 2006 Equity Incentive Plan, as may be amended from time to time (the “Equity Incentive Plan”), as the Board or theCompensation Committee of the Board determines in its discretion from time to time. 2 (c) Cash Incentive Award for Major Financing. A cash payment of Four Hundred Thousand Dollars ($400,000.00) will be paid toExecutive within forty-five (45) days of the completion of an equity and/or debt offering which raises in the discretion of the Board sufficient capitalin equity or debt to commence construction of the Mount Hope Mine and to cover costs and expenditures during the construction period (the“Funding”). The Board’s action to proceed with construction, based on receipt of such sufficient capital, shall trigger payment of this MajorFinancing Award. Executive will assist in and direct the planning for and the obtaining the Funding which, at this time, is planned to be raisedduring 2012 on terms to be approved by the Board. It is understood that the portion of the Funding that is debt may be subject to conditionsprecedent and that the release of the debt funds may be subject to milestones all as may be set forth in the debt transaction documents. The Fundingthat is debt must be a firm written commitment, from a lending source, with conditions precedent and milestones all of which are satisfactory to andapproved by the Board. 3.. 3 Payments Subject to Deductions. All payments to Executive under Sections 3.1 and 3.2 shall be subject to the customary withholding taxesand the other employee taxes as required by law and deductions authorized by Executive. 3.4 Business Expenses/Reimbursement of Disallowed Expenses. During the Term, the Company shall reimburse Executive for other reasonableand necessary business expenses in connection with the performance by Executive of his duties or services hereunder, including business, entertainment andtravel, subject to compliance with such policies regarding expenses and expense reimbursements as may be adopted from time to time by the Company. If anycompensation payment, medical reimbursement, employee fringe benefit, expense allowance payment or other expense incurred by the Company for the benefitof Executive is disallowed in whole or in part as a deductible expense of the Company for federal or state income tax purposes for reasons other than the failureto qualify as “performance-based compensation” for purposes of Code Section 162(m), Executive shall reimburse the Company, upon notice and demand, tothe full extent of the disallowance. In lieu of payment by Executive to the Company, Executive authorizes the Company to withhold amounts from Executive’sfuture compensation payments until the amount owed to the Company has been fully recovered. The Company shall not be required to legally defend anyproposed disallowance and the amount required to be reimbursed by Executive shall be the amount, as finally determined by agreement or otherwise, which isactually disallowed as a deduction. This legally enforceable obligation is in accordance with the provisions of Revenue Ruling 69115 and is for the purpose ofentitling Executive to a business expense deduction for the taxable year in which the repayment is made to the Company. In this manner, the Company shall beprotected from having to bear the entire burden of a disallowed expense item. 3..5 Fringe Benefits. During the Term, Executive shall be entitled to participate in the retirement and health and welfare benefits offered generallyby Company to its employees, to the extent that Executive’s position, tenure, salary, health, and other qualifications make Executive eligible to participate.Executive’s participation in such benefits shall be subject to the terms of the applicable plans, as the same may be amended 3 from time to time. Company does not guarantee the adoption or continuance of any particular employee benefit during Executive’s employment, and nothing inthis Agreement is intended to, or shall in any way restrict the right of Company, to amend, modify or terminate any of its benefits during the Term of thisAgreement. Executive also will be entitled to all normal and customary perquisites of employment, includingpaid-time-off of twenty (20) days per year,available to employees of the Company at Executive’s level, subject to the stated terms and conditions of such perquisites. 3.6 Indemnity. The Company agrees to indemnify Executive for acts or omissions pursuant to its current Indemnity Agreement, a copy ofwhich has been provided to Executive. 4. TERMINATION; EFFECT OF TERMINATION. 4.1. Termination Date. Executive’s employment with the Company hereunder may be terminated as provided in Section 4.2. Executive’s“Termination Date” shall be the date Executive’s “separation from service” with the Company has occurred for purposes of Section 409A of the InternalRevenue Code, as amended, and the regulations and guidance thereunder (“Code”). 4.2. Termination Events. (a) Termination by the Company Without Cause. The Company may terminate Executive’s employment with the Company withoutCause upon thirty (30) days prior written notice. (b) Termination by the Company With Cause. The Company may terminate Executive’s employment with the Company at any timewith Cause, without notice (except as otherwise provided herein). For the purposes of this Agreement, “Cause” means the good faith determination bythe Board that: (i) Executive has neglected, failed or refused to perform his duties as CEO (other than as a result of physical or mental illness); (ii) Executive has failed to timely attain the goals assigned to Executive by the Company, in its good faith judgment, from timeto time; (iii) Executive has committed an act of personal dishonesty including, without limitation, an act or omission intended to resultin personal enrichment of Executive at the expense of the Company; (iv) Executive has committed a willful or intentional act that could reasonably be expected to injure the reputation, business, orbusiness relationships of the Company or Executive’s reputation or business relationships; (v) Executive has perpetrated an intentional fraud against or affecting the Company or any customer, supplier, client, agent, oremployee thereof; 4 (vi) Executive has been convicted (including conviction on a nolo contendere, no contest, or similar plea) of a felony or anycrime involving fraud, dishonesty, or moral turpitude; or (vii) Executive materially breaches his obligations under Section 8 of this Agreement. With respect to any of the matters set forth in (i) or (ii) above, the Company shall give Executive notice of the deficiency and a reasonable opportunityto correct the deficiency (not to exceed sixty (60) days) prior to termination. In the event that the Company has given notice of a deficiency and makesa determination that the deficiency has not been cured within a reasonable period of time, Executive’s employment may be terminated for Cause. (c) Resignation By Executive Without Good Reason. Executive may terminate Executive’s employment with the Company without GoodReason upon ninety (90) days prior written notice to the Company, provided the Company may waive the notice period. (d) Resignation By Executive With Good Reason. Executive may terminate Executive’s employment with the Company for Good Reason,subject to the notice and cure requirements provided below. For purposes of this Agreement, “Good Reason” means: (i) a material diminution in Executive’s base compensation: (ii) a material diminution in Executive’s authority, duties or responsibilities; (iii) a material change of more than 50 miles in the geographic location at which Executive is required to perform services (iv) any direction or requirement that Executive engage in conduct that could reasonably be construed to violate local, state or federal law;or (v) a material failure by the Company to pay Base Compensation due Executive pursuant to this Agreement in a timely manner. With respect to any of the matters set forth above, Executive shall provide written notice to the Company within ninety (90) days of the initialexistence of the Good Reason condition. Upon receipt of such notice, the Company shall have a period of thirty (30) days during which it mayremedy the condition and not be required to pay any amount payable under Sections 4.3(b) or 4.4(a) below in connection with a resignation with GoodReason. (e) Termination Due to Executive’s Disability. Executive’s employment with the Company shall terminate automatically upon the inability ofExecutive to satisfactorily perform the duties set forth in Section 1 or as assignedto him by the Company from time to time by reason of mental or non-industrial physical illness or injury for a period of one hundred eighty (180) consecutive days (“Disability”). 5 (f) Termination Due to Executive’s Death. Executive’s employment with the Company shall terminate automatically upon his death. (g) Wind Up Activities. Following any notice of termination required under this Section 4.2, the Company and Executive shallcooperate with each other in all matters relating to the winding up of Executive’s work on behalf of the Company. 4.3. Payments Upon Termination of Employment Prior to a Change of Control or After The Expiration of the Transition Period. (a) Involuntary Termination By The Company Without Cause Prior To a Change of Control or After the Expiration of the TransitionPeriod. If Executive’s Termination Date occurs (y) during the Term, and (z) prior to a Change of Control or after the expiration of the TransitionPeriod, and if such termination is involuntary at the initiative of the Company without Cause, then, in addition to such Base Compensation that hasbeen earned but not paid to Executive as of the Termination Date, and in consideration of Executive’s obligations under Section 8.2 below, theCompany shall provide to Executive the payments set forth in this Section 4.3(a), subject to the conditions described in Section 4.5: (i) Separation Pay. The Company shall pay to Executive an amount equal to two times Executive’s Base Compensationas of the Termination Date payable to Executive in approximately equal installments over twelve (12) months, with such periodcommencing on the first normal payroll date of the Company after the Termination Date and continuing thereafter in accordance with theCompany’s regular payroll schedule, but in no event shall such amount paid under this Section 4.3(a)(i) exceed the lesser of two times(A) the limit of compensation set forth in section 401(a)(17) of the Code as in effect for the year in which the Termination Date occurs, or(B) Executive’s annualized compensation based upon the annual rate of pay for services to the Company for the calendar year prior to thecalendar year in which the Termination Date occurs (adjusted for any increase during that year that was expected to continue indefinitely ifthe Employee had not separated from service). The Company and Executive intend the payments under this Section 4.3(a)(i) to be a“separation pay plan due to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii). (ii) Make-up Payment. In the event that Executive’s separation pay under Section 4.3(a)(i) above is limited by application ofclause (A) or (B) thereof, then the Company shall make an additional lump sum 6 payment to Executive equal to the difference between (x) two times Executive’s Base Compensation as of the Termination Date and (y) theamount payable to Executive under Section 4.3(a)(i). Such lump sum payment shall be paid to Executive no later than sixty (60) daysfollowing the Termination Date, provided that Executive has satisfied the conditions described in Section 4.5. The Company and Executiveintend the payment under this Section 4.3(a)(ii) to be a short-term deferral under Treas. Reg. § 1.409A-1(b)(4). (b) Resignation By Executive For Good Reason Prior To a Change of Control. If Executive’s Termination Date occurs (y) during theTerm, and (z) prior to a Change of Control or after the expiration of the Transition Period, and if such termination is the result of Executive’sresignation for Good Reason, then, in addition to such Base Compensation that has been earned but not paid to Executive as of the Termination Date,and in consideration of Executive’s obligations under Section 8.2 below, the Company shall provide to Executive the payments set forth in thisSection 4.3(b), subject to the conditions described in Section 4.5: (i) Separation Pay. The Company shall pay to Executive an amount equal to one times Executive’s Base Compensation as of theTermination Date payable to Executive in approximately equal installments over twelve (12) months, with such period commencing on thefirst normal payroll date of the Company after the Termination Date and continuing thereafter in accordance with the Company’s regularpayroll schedule, but in no event shall such amount paid under this Section 4.3(b)(i) exceed the lesser of two times (A) the limit ofcompensation set forth in section 401(a)(17) of the Code as in effect for the year in which the Termination Date occurs, or (B) Executive’sannualized compensation based upon the annual rate of pay for services to the Company for the calendar year prior to the calendar year inwhich the Termination Date occurs (adjusted for any increase during that year that was expected to continue indefinitely if the Employeehad not separated from service). The Company and Executive intend the payments under this Section 4.3(b)(i) to be a “separation pay plandue to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii). (ii) Make-up Payment. In the event that Executive’s separation pay under Section 4.3(b)(i) above is limited by application of clause(A) or (B) thereof, then the Company shall make an additional lump sum payment to Executive equal to the difference between (x) one timesExecutive’s Base Compensation as of the Termination Date and (y) the amount payable to Executive under Section 4.3(b)(i). Such lumpsum payment shall be paid to Executive no later than sixty (60) days following the Termination Date, provided that Executive has satisfiedthe conditions described in Section 4.5. The Company and Executive intend the payment 7 under this Section 4.3(b)(ii) to be a short-term deferral under Treas. Reg. § 1.409A-1(b)(4). (c) Other Termination Prior to a Change of Control or After Expiration of the Transition Period. If Executive’s Termination Date occurs(y) during the Term, and (z) prior to a Change of Control or after the expiration of the Transition Period, and is the result of: (i) Executive’s abandonment of or resignation from employment for any reason other than Good Reason; (ii) termination of Executive’s employment by the Company for Cause; or (iii) Executive’s death or Disability; then the Company will pay to Executive, or Executive’s beneficiary or Executive’s estate, as the case may be, such Base Compensation that has beenearned but not paid to Executive as of the Termination Date, payable pursuant to the Company’s normal payroll practices and procedures, andExecutive shall not be entitled to any additional compensation or benefits provided under this Section 4. 4.4. Payments Upon Termination of Employment During the Transition Period. (a) Involuntary Termination By The Company Without Cause or Resignation by Executive for Good Reason During the Transition Period. IfExecutive’s Termination Date occurs during the Transition Period, and if such termination is involuntary at the initiative of the Company without Cause or isthe result of Executive’s resignation for Good Reason, then, in addition to such Base Compensation that has been earned but not paid to Executive as of theTermination Date, and in consideration of Executive’s obligations under Section 8.2 below, the Company shall provide to Executive the payments set forth inthis Section 4.4(a), subject to the conditions described in Section 4.5: (I ) Lump Sum Separation Pay. The Company shall pay to Executive an amount equal to (A) 100% of Executive’s target annualincentive award for one year (as in effect immediately prior to the closing of the Change of Control), if any, plus (B) if not paid previously, anamount equal to the Major Financing Award set forth in Section 3.2 (c), less applicable withholdings, payable to Executive in a lump sum no laterthan sixty (60) days following the Termination Date, provided that Executive has satisfied the conditions described in Section 4.5. The Companyand Executive intend the payment under this Section 4.4(a)(i) to be a short-term deferral under Treas. Reg. § 1.409A-1(b)(4). 8 (ii) Additional Separation Pay. The Company shall pay to Executive an amount equal to three times Executive’s BaseCompensation as of the Termination Date payable to Executive in approximately equal installments over twelve (12) months, with such periodcommencing on the first normal payroll date of the Company after the Termination Date and continuing thereafter in accordance with the Company’sregular payroll schedule, but in no event shall such amount paid under this Section 4.4(a)(ii) exceed the lesser of two times (A) the limit ofcompensation set forth in section 401(a)(17) of the Code as in effect for the year in which the Termination Date occurs, or (B) Executive’s annualizedcompensation based upon the annual rate of pay for services to the Company for the calendar year prior to the calendar year in which theTermination Date occurs (adjusted for any increase during that year that was expected to continue indefinitely if the Employee had not separated fromservice). The Company and Executive intend the payments under this Section 4.4(a)(ii) to be a “separation pay plan due to involuntary separationfrom service” under Treas. Reg. § 1.409A1(b)(9)(iii). (iii) Make-up Payment. In the event that Executive’s separation pay under Section 4.4(a)(ii) above is limited by application of clause(A) or (B) thereof, then the Company shall make an additional lump sum payment to Executive equal to the difference between (x) three timesExecutive’s Base Compensation as of the Termination Date and (y) the amount payable to Executive under Section 4.4(a)(ii). Such lump sumpayment shall be paid to Executive no later than sixty (60) days following the Termination Date, provided that Executive has satisfied the conditionsdescribed in Section 4.5. The Company and Executive intend the payment under this Section 4.4(a)(iii) to be a short-term deferral under Treas. Reg.§ 1 .409A-1 (b)(4). (b) Other Termination During the Transition Period. If Executive’s Termination Date occurs during the Transition Period and is the result of: (i) Executive’s abandonment of or resignation from employment for any reason other than Good Reason; (ii) termination of Executive’s employment by the Company for Cause; or (iii) Executive’s death or Disability; then the Company will pay to Executive, or Executive’s beneficiary or Executive’s estate, as the case may be, such Base Compensation that has beenearned but not paid to Executive as of the Termination Date, payable pursuant to the Company’s normal payroll practices and procedures, and 9 Executive shall not be entitled to any additional compensation or benefits provided under this Section 4. 4.5 Separation Pay Conditions. Notwithstanding anything above to the contrary, the Company will not be obligated to make anypayments to Executive under Section 4.3(a), Section 4.3(b) or Section 4.4(a) unless: (i) Executive has signed a release of claims in favor of theCompany and its Affiliates and related entities, and their directors, officers, insurers, employees and agents, in a form prescribed by the Company;(ii) all applicable rescission periods provided by law for releases of claims have expired and Executive has not rescinded the release of claims; and(iii) Executive is in strict compliance with the terms of this Agreement and any other written agreements between the Company and Executive as of thedates of such payments. Any payments scheduled to be paid to Executive pursuant to Section 4.3(a), Section 4.3(b) or Section 4.4(a) on payroll datesoccurring before the conditions set forth in clauses (i) and (ii) of this Section 4.5 are satisfied shall be held and paid to Executive as soon aspracticable following satisfaction of such conditions. 4.6 Section 409A; Deferred Compensation. (a) Delay in Payment. Notwithstanding anything in the Agreement to the contrary, if Executive is deemed by the Companyat the time of Executive’s “separation from service” with the Company to be a “specified employee” under Section 409A of the Code, thenany non-exempt deferred compensation which would otherwise be payable hereunder shall not be paid until the date which is the firstbusiness day following the six-month period after Executive’s separation from service (or if earlier, Executive’s death). Such delay inpayment shall only be effected with respect to each separate payment of non-exempt deferred compensation to the extent required to avoidadverse tax treatment to Executive under Section 409A. Any payments or benefits not subject to such delay, shall be paid pursuant to thetime and form of payment specified above. Any compensation which would have otherwise been paid during the delay period shall be paidto Executive (or his beneficiary or estate) in a lump sum payment on the first business day following the expiration of the delay period. (b) Interpretation. The parties intend that all payments or benefits payable under the Agreement will not be subject to theadditional tax imposed by Section 409A of the Code, and the provisions of the Agreement shall be construed and administered consistentwith such intent. To the extent such potential payments could become subject to Section 409A of the Code, the Company and Executiveagree to work together to modify the Agreement to the minimum extent necessary to reasonably comply with the requirements ofSection 409A of the Code, provided that the Company shall not be required to provide any additional compensation amounts or benefitsand Executive shall be responsible for payment of any and all taxes owed in connection with the consideration provided for underSection 4.3(a), Section 4.3(b) or Section 4.4(a) of this Agreement. 10 5. CHANGE OF CONTROL. 5. 1 Definition. For purposes of this Agreement, “Change of Control” means: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities ExchangeAct of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under theExchange Act) of 50% or more of either (A) the then-outstanding shares of common stock of the Company (the “Outstanding Company CommonStock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election ofdirectors (the “Outstanding Company Voting Securities”); provided, however, that, for purposes of this Section 5.1(a), the following acquisitionsshall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, or (iii) any acquisitionby any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate; or (b) Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involvingthe Company or the acquisition of assets or stock of another entity by the Company (each, a “Business Combination”), in each case unless,following such Business Combination, (i) all or substantially all of the individuals and entities that were the beneficial owners of the OutstandingCompany Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own,directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding votingsecurities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination(including, without limitation, a corporation that, as a result of such transaction, owns the Company or all or substantially all of the Company’sassets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to suchBusiness Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, and(ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Companyor such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 50% or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination; or (c) Individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Incumbent Board”) cease for anyreason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whoseelection, or nomination 11 for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shallbe considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initialassumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual orthreatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (d) A sale or disposition of all or substantially all of the operating assets of the Company to an unrelated party; or (e) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. 5.2 Parachute Payment Restrictions. (a) If any payments or benefits (including payments and benefits pursuant to this Agreement or under other compensatoryarrangements involving the Executive, including equity-based incentive awards (the “other arrangements”)) in the nature of compensation that theExecutive would receive in connection with a change in the ownership or effective control of the Company or in the ownership of a substantial portionof the assets of the Company (collectively, “Transaction Payments”) would collectively constitute a “parachute payment” within the meaning ofSection 280G of the Code, and if the “net after-tax amount” of such parachute payment to the Executive is less than what the net after-tax amount tothe Executive would be if the Transaction Payments otherwise constituting the parachute payment were limited to the maximum “parachute value” ofTransaction Payments that the Executive could receive without giving rise to any liability for any excise tax imposed by Section 4999 of the Code(the “Excise Tax”), then the Transaction Payments otherwise constituting the parachute payment shall be reduced so that the parachute value of allTransaction Payments, in the aggregate, will equal the maximum parachute value of all Transaction Payments that the Executive can receive withoutany Transaction Payments being subject to the Excise Tax. Should such a reduction in Transaction Payments be required, the Executive shall beentitled, subject to the following sentence, to designate those Transaction Payments under this Agreement or the other arrangements that will bereduced or eliminated so as to achieve the specified reduction in Transaction Payments to the Executive and avoid characterization of suchTransaction Payments as a parachute payment. The Company will provide the Executive with all information reasonably requested by the Executiveto permit the Executive to make such designation. To the extent that the Executive’s ability to make such a designation would cause any of theTransaction Payments to become subject to any additional tax under Code Section 409A, or if the Executive fails to make such a designation withinten business days of receiving the requested information from the Company, then the Company shall achieve the necessary reduction in theTransaction Payments by reducing them in the following order: (i) reduction of cash payments payable under this 12 Agreement; (ii) reduction of other payments and benefits to be provided to the Executive; (iii) cancellation or reduction of accelerated vesting of equity-based awards that are subject to performance-based vesting conditions; and (iv) cancellation or reduction of accelerated vesting of equity-basedawards that are subject only to service-based vesting conditions. If the acceleration of the vesting of Executive’s equity-based awards is to be cancelledor reduced, such acceleration of vesting shall be reduced or cancelled in the reverse order of the date of grant. For purposes of this Section 5.2, a “netafter-tax amount” shall be determined by taking into account all applicable income, excise and employment taxes, whether imposed at the federal,state or local level, including the Excise Tax, and the “parachute value” of a Transaction Payment means the present value as of the date of theChange of Control for purposes of Section 280G of the Code of the portion of such Transaction Payment that constitutes a parachute payment underSection 280G(b)(2) of the Code. (b) The independent registered public accounting firm engaged by the Company for general audit purposes as of the day prior to theeffective date of the Change of Control may be utilized by the Compensation Committee to make all determinations required to be made under thisSection 5.2. If the independent registered public accounting firm so engaged by the Company is serving as accountant or auditor for the individual,entity or group effecting the Change of Control, the Compensation Committee may appoint another nationally recognized independent registeredpublic accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations byany such independent registered public accounting firm retained hereunder. Any good faith determinations of the accounting firm made hereundershall be final, binding and conclusive upon the Company and Executive. 5.3 Effect of Change of Control on Equity Awards. Notwithstanding anything to the contrary in any award agreement pursuant to which anequity-based compensation award has been made to Executive, the effect of a Change of Control (as defined in the Equity Incentive Plan) on any equity-basedcompensation award granted to Executive during the Term of this Agreement or the term of the Prior Agreement shall be as provided in Section 12(c) of theEquity Incentive Plan. If and to the extent the vesting and exercisability of any such equity-based compensation award has not already been accelerated in fullin connection with a Change of Control, as contemplated by clause (ii) of Section 12(c) of the Equity Incentive Plan, then the vesting and exercisability of anysuch award shall be accelerated in full if Executive’s Termination Date occurs during the Transition Period under the circumstances described in 4.4(a) of thisAgreement. 6 DISCLOSURE OF INFORMATION. 6.1. Executive acknowledges that he has received and will continue to receive access to non-public, confidential and proprietary businessinformation and trade secrets about the Company and its Affiliates (“Confidential Information”), that this Confidential Information was and will be obtainedor developed by the Company at great expense and 13 is zealously guarded by the Company from unauthorized disclosure, and that Executive’s possession of this Confidential Information is due solely toExecutive’s employment with the Company. In recognition of the foregoing, Executive will not at any time during employment or following termination ofemployment for any reason, disclose, use or make otherwise available to any third party any Confidential Information relating to the Company’s or any of itsAffiliates’ business, including their products, production methods and development; manufacturing and business methods and techniques; trade secrets,data, specifications, developments, inventions, engineering and research activity; marketing and sales strategies, information and techniques; long and shortterm plans; current and prospective dealer, customer, vendor, supplier and distributor lists, contacts and information; financial, personnel and informationsystem information; and any other information concerning the business of the Company or its Affiliates. During the term of Executive’s employment with theCompany and at all times thereafter, Executive shall take reasonable steps to protect the confidentiality of Confidential Information and shall refrain from anyacts or omissions that would reduce the value of Confidential Information to the Company or any of its Affiliates. Executive’s foregoing obligations regardingConfidential Information do not apply to any knowledge or information to the extent that it (i) is now or subsequently becomes generally publicly known orgenerally known in the industry in which the Company operates in the form in which it was obtained from the Company (or its applicable Affiliate), (ii) isindependently made available to Executive in good faith by a third party who has not violated an obligation of confidentiality to the Company or any of itsAffiliates, or (iii) is required by law to be disclosed (but only to the extent such disclosure is required). In the latter event, Executive shall disclose to theCompany the event and authority requiring disclosure “required by law” at the first opportunity upon learning of the disclosure request. Nothing contained inthe preceding sentence shall be interpreted to legitimize any disclosure of Confidential Information by Executive that occurs outside of any of the eventsdescribed in items (i) through (iii) above. The parties acknowledge and agree that Executive’s obligations under this Section 6 to maintain the confidentiality ofthe Confidential Information are in addition to any obligations of Executive under applicable statutory or common law. 6.2. Upon termination of employment with the Company, Executive shall deliver to a designated Company representative all records,documents, hardware, software, and all other property of the Company or any of its Affiliates in whatever form and all copies thereof in Executive’spossession. Executive acknowledges and agrees that all such materials are the sole property of the Company or its Affiliates and that Executive will certify inwriting to the Company at the time of termination that Executive has complied with this obligation. 6.3 For purposes of this Section 6 and this entire Agreement, Affiliate” means an individual, a partnership, a corporation, a limited liabilitycompany, an association, a joint stock company, a trust, a joint venture, or an unincorporated organization, that directly, or indirectly through one or moreintermediaries, controls, or is controlled by, or is under common control with, the Company. 6.4 Executive acknowledges that Confidential Information constitutes a 14 unique and valuable asset of the Company and its Affiliates and represents a substantial investment of time and expense by the Company and its Affiliates.Executive further acknowledges that the provisions of this Section 6 are reasonable and necessary to protect the legitimate interests of the Company and itsAffiliates, and that any violation of this Section 6 by Executive would cause substantial and irreparable harm to the Company and its Affiliates to such anextent that monetary damages alone would be an inadequate remedy. Therefore, in the event that Executive violates any provision of this Section 6, theCompany and its Affiliates shall be entitled to immediate injunctive relief (without the necessity of proving actual damages or posting bond, or if a bond isrequired, a bond in the amount of $1,000 is deemed sufficient), in addition to all the other remedies it or they may have, restraining Executive from violatingor continuing to violate such provision. 7. DISCLOSURE AND ASSIGNMENT OF INVENTIONS. 7.1. Executive agrees to promptly disclose to the Company inventions, ideas, processes, writings, designs, developments and improvements,whether or not protectable under the applicable patent, trademark or copyright statutes, which Executive has made, conceived, reduced to practice or learnedduring his employment with the Company or which Executive makes, conceives, reduces to practice or learns during the period of employment by Company,either alone or jointly with others, relating to any business in which the Company, during the period of Executive’s employment, has been, is or may beconcerned (“the Inventions”). Such disclosures shall be made by Executive to the Company in a written report, setting forth in detail the structures, proceduresand methodology employed and the results achieved. 7.2. Consistent with and to the extent permitted by applicable law, Executive hereby assigns and agrees to assign to the Company all rights inand to the Inventions and proprietary rights therein, based thereon or related thereto, including, but not limited to, applications for United States and foreignpatents and resulting patents. 7.3. Executive further agrees, without charge to the Company but at its expense, to assist the Company in every proper way and execute,acknowledge and deliver, during and after employment by the Company, all such documents necessary and perform such other legal acts as may benecessary, in the opinion of the Company, to obtain or maintain United States or foreign patents or other proprietary protection, for any and all Inventionsmade during his employment by the Company in any and all countries, and to vest title therein to the Company. 7.4. Executive acknowledges notice from the Company that this foregoing obligation to assign rights in and to any Inventions does not apply toan Invention for which no equipment, supplies, facility or trade secret information of Company was used and which was developed entirely on Executive’sown time and (y) which does not relate (A) directly to the business of the Company, or (B) to the Company’s actual or demonstrably anticipated research ordevelopment; or (z) which does not result from any work performed by Executive for the Company. 15 7.5. Executive further agrees that prior to separation from employment with the Company for any reason, Executive shall disclose to theCompany, in a written report, all Inventions, the rights to which Executive has agreed to assign to the Company under Sections 7.1 and 7.2 above, and whichExecutive has not previously disclosed. 8 RESTRICTIVE COVENANTS. 8.1. Non-Solicitation. (a) Executive specifically acknowledges that the Confidential Information described in Section 6.1 includes confidential and tradesecret data pertaining to current and prospective customers of the Company, that such data is a valuable and unique asset of the Company’sbusiness and that the success or failure of the Company’s specialized business is dependent in large part upon the Company’s ability to establishand maintain close and continuing personal contacts and working relationships with such customers and to develop proposals which are specificallydesigned to meet the requirements of such customers. Therefore, during Executive’s employment with the Company and for the twelve (12) monthsfollowing termination of employment for any reason, except on behalf of the Company or with the Company’s prior written consent, Executive isprohibited from soliciting, either directly or indirectly, on his own behalf or on behalf of any other person or entity, all such customers with whomExecutive had contact during the twenty-four (24) months preceding Executive’s termination of employment. (b) Executive specifically acknowledges that the Confidential Information described in Section 6.1 also includes confidential andtrade secret data pertaining to current and prospective employees and agents of the Company, and Executive further agrees that during Executive’semployment with the Company and for the twelve (12) months following termination of employment for any reason, Executive will not directly orindirectly solicit, on his own behalf or on behalf of any other person or entity, the services of any person who is an employee or agent of theCompany or solicit any of the Company’s employees or agents to terminate their employment or agency with the Company. (c) Executive specifically acknowledges that the Confidential Information described in Section 6.1 also includes confidential andtrade secret data pertaining to current and prospective vendors and suppliers of the Company, Executive agrees that during Executive’s employmentwith the Company and for the twelve (12) months following termination of employment for any reason, Executive will not directly or indirectlysolicit, on his own behalf or on behalf of any other person or entity, any Company vendor or supplier for the purpose of either providing products orservices to competitors of the Company, as described in Section 8.2(b), or terminating such vendor’s or supplier’s relationship or agency with theCompany. 16 (d) Executive further agrees that, during Executive’s employment with the Company and for the twelve (12) months followingtermination of employment for any reason, Executive will do nothing to interfere with any of the Company’s business relationships. 8.2. Non-Competition. (a) Executive represents to the Company that Executive is not a party to any agreement with a prior employer or otherwise whichwould prohibit Executive from employment with the Company. Executive further represents that he has provided to the Company copies of any andall agreements (e.g., non-competition, non-solicitation, or non-disclosure agreements) that might limit Executive’s ability, in any way, to perform theduties of Executive’s position on behalf of the Company, and Executive agrees to act at all times on behalf of the Company in a manner consistentwith any such agreements. Executive acknowledges and understands that the Company will have no obligation to provide legal representation toExecutive in the event a prior employer or other third party brings or threatens to bring an action against Executive for violating any such agreements;that the Company may elect, at its sole discretion, to provide legal representation to Executive but Executive may be required to reimburse theCompany for any legal expenses paid on Executive’s behalf in the event Executive is found to have violated any such agreements; and that Executivemay be terminated in the event the Company determines that Executive may have violated any such agreements. Despite anything to the contraryherein, termination based upon the Company’s determination that Executive has violated this Section 8.2 shall be considered termination for Cause. (b) Executive covenants and agrees that during Executive’s employment with the Company and for the twenty-four (24) monthsfollowing termination of employment for any reason, he will not, in any state in which Executive worked on behalf of the Company or in any state orcountry where the Company has a material ownership or possessory interest in molybdenum, engage in or carry on, directly or indirectly, as anowner, employee, agent, associate, consultant or in any other capacity, a business competitive with that conducted by the Company. A “businesscompetitive with that conducted by the Company” shall mean any business or activity involved in the discovery or mining of molybdenum or anysimilar ore with properties for strengthening or hardening steel, or any other ore with which the Company is in the business of discovering or miningat the time of Executive’s termination. To “engage in or carry on” shall mean to have ownership in such business or consult, work in, direct or haveresponsibility for any area of such business, including but not limited to the following areas: operations, sales, marketing, manufacturing,procurement or sourcing, purchasing, customer service, distribution, product planning, research, design or development. (c) For the twelve (12) months following termination of employment for any reason, Executive certifies and agrees that he will notifythe Chairman of 17 the Board of the Company of his employment or other affiliation with any potentially competitive business or entity prior to thecommencement of such employment or affiliation. 8.3 Executive acknowledges that the provisions of this Section 8 are reasonable and necessary to protect the legitimate interests of theCompany and its Affiliates, including without limitation trade secrets, customer and supplier relationships, goodwill and loyalty, and that anyviolation of this Section 8 by Executive would cause substantial and irreparable harm to the Company and its Affiliates to such an extent thatmonetary damages alone would be an inadequate remedy. Therefore, in the event that Executive violates any provision of this Section 8, theCompany and its Affiliates shall be entitled to immediate injunctive relief (without the necessity of proving actual damages or posting bond, or if abond is required, a bond in the amount of $1,000 is deemed sufficient), in addition to all the other remedies it or they may have, restrainingExecutive from violating or continuing to violate such provision. 8.4 If the duration of, the scope of or any business activity covered by any provision of this Section 8 is in excess of what is validand enforceable under applicable law, such provision shall be construed to cover only that duration, scope or activity that is valid and enforceable.Executive and the Company agree that this Section 8 shall be given the construction which renders its provisions valid and enforceable to themaximum extent, not exceeding its express terms, possible under applicable law. 9. NOTICES. Any notice, consent, approval, request, demand or other communication required or permitted hereunder must be inwriting to be effective and shall be deemed delivered and received (i) if personally delivered or if delivered by telex or telecopy with electronic confirmation whenactually received by the party to whom sent, or (ii) if delivered by mail (whether actually received or not), at the close of business on the fifth business daynext following the day when placed in the federal mail, postage prepaid, certified or registered mail, return receipt requested, addressed as follows: If to Executive: David A. Chaput5141 Live Oak DriveSmithton, IL 62285 If to Employer: General Moly, Inc.Attn: Corporate Counsel — Vice President Human Resources1726 Cole Blvd, Suite 115Lakewood, CO 80401 Copy to: Faegre & Benson, LLPAttn: John Haverman200 Wells Fargo Center90 South 7 StreetMinneapolis, MN 55402-3901 18th (or to such other address as any party shall specify by written notice so given). 10. LEGAL REQUIREMENTS. Executive represents and warrants that, during the Term (and thereafter for so long as Executive remains anemployee of the Company), Executive shall use his best efforts to comply in all material respects with, and shall use his best efforts, within the scope of hisduties to comply with all legal requirements imposed by environmental laws imposed by any local, state or federal authority and the rules and regulationspromulgated by any such entity. For the purposes of this Agreement, environmental law shall mean all local, state or federal law, now or hereafter existing, thatrelate to health, safety or environmental protection. Executive shall use his best efforts to comply in all material respects with, and shall use his best efforts,within the scope of his duties, to cause the Company to comply with, all other applicable laws and regulations governing the Company including, withoutlimitation, all environmental laws and regulations. 11. NO IMPLIED WAIVERS. Neither party shall waive any breach of any provision of this Agreement except in writing, and any waiver sogranted in any single instance shall not thereby be deemed to be a waiver of any preceding or succeeding breach of the same or any other provision of thisAgreement. 12. HEADINGS. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof, norto affect the meaning thereof. 13. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and construed under Colorado law, without regard to itsconflict of laws principles. The parties agree that any litigation in any way relating to this Agreement shall be venued in either federal or state court in JeffersonCounty, Colorado, and Executive hereby consents to the personal jurisdiction of these courts and waives any objection that such venue is inconvenient orimproper. 14. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, EXECUTIVE AND COMPANY HEREBYIRREVOCABLY AND EXPRESSLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, ORENFORCEMENT THEREOF. 15. EXECUTIVE’S RIGHT TO RECOVER ATTORNEYS’ FEES AND COSTS. In the event of any litigation concerning any controversy,claim or dispute between the parties hereto, arising out of or relating to this Agreement, the breach hereof or the interpretation hereof, Executive will be entitled torecover from the Company Executive’s reasonable expenses, attorneys’ fees, and costs incurred therein or in the enforcement or collection of any judgment oraward rendered therein if (and only if) Executive is the prevailing party. The “prevailing party” means the party determined by the court to have most nearlyprevailed, even if such party did not prevail in all matters, not necessarily the party in whose favor a judgment is rendered. 16. COMPLETE AGREEMENT - AMENDMENTS - PRIOR AGREEMENTS. The foregoing is the entire agreement of the parties withrespect to the subject matter hereof, 19 excepting those documents identified herein to be signed by the Executive and the Company, and may not be amended, supplemented, canceled or dischargedexcept by written instrument executed by both parties hereto. This Agreement supersedes any and all prior agreements among the Company and Executive withrespect to the matters covered herein, including without limitation the Prior Agreement. 17. INVALIDITY. The invalidity or lack of enforceability of any particular provision in this Agreement shall not affect the other provisionshereof, and this Agreement shall be construed in all other respects as though such invalid or unenforceable provisions were permitted. Moreover, the partiesagree to replace or have a Court replace such invalid provisions with a substitute provision that will satisfy the intent of the parties. 18. SURVIVAL. Upon the expiration or termination of this Agreement for any reason, the provisions of this Section and the covenants of theparties herein shall survive and remain in full force and effect. 19. BINDING OBLIGATIONS. The Executive and the Company acknowledge and understand that, unless expressly stated above,Executive’s obligations hereunder shall not be affected by the reasons for, circumstances of, or identity of the party who initiates the termination of Executive’semployment with the Company. 20. FORFEITURE AND COMPENSATION RECOVERY. 20.1 Forfeiture Conditions. Notwithstanding anything to the contrary in this Agreement, if the Executive breaches any of the restrictionsapplicable to the Executive under Section 8 of this Agreement after Executive’s Termination Date, then (i) the Executive shall immediately forfeit hisright to receive any separation pay under Sections 4.3(a), 4.3(b) or 4.4(a) of this Agreement, and to the extent any portion of such payments has beenreceived, the Executive will be required to repay to the Company the amount of such payments previously received. 20.2 Compensation Recovery Policy. To the extent that any compensation provided pursuant to this Agreement is considered “incentive-based compensation” within the meaning and subject to the requirements of Section 10D of the Securities Exchange Act of 1934 (the “Exchange Act”),any such compensation shall be subject to potential forfeiture or recovery by the Company in accordance with any compensation recovery policyadopted by the Board or its Compensation Committee in response to the requirements of Section 10D of the Exchange Act and any implementingrules and regulations thereunder adopted by the Securities and Exchange Commission or any national securities exchange on which the Company’scommon stock is then listed. This Agreement may be unilaterally amended by the Company to comply with any such compensation recovery policy. 20 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates set forth below, effective as of the Effective Date first setforth above. COMPANY: GENERAL MOLY, INC. By:/s/ R. Scott Roswell Its:Corporate Counsel-VP, Human Resources Execute:/s/ David A. ChaputDavid A. Chaput 21Exhibit 10.36 CHANGE OF CONTROL SEVERANCE, CONFIDENTIALITYAND NON-SOLICITATION AGREEMENT This Change of Control Severance, Confidentiality and Non-Solicitation Agreement (the “Agreement”) is entered into between GENERAL MOLY,INC., a Delaware corporation (the “Company”) and Robert I. Pennington (“Employee”) to be effective as of January 1, 2012 (the “Effective Date”). Certaincapitalized terms used in this Agreement are defined in Section 5 below. RECITALS A. The Company has retained Employee to perform services that are important to the long-term success of the Company. Employee and theCompany acknowledge that Employee’s services are of a senior managerial nature and that in conducting the Company’s business Employee will be in adecision-making capacity and will exercise direction, control and supervision over a material part of the Company’s business. B. The Company believes that it is in the best interests of the Company and its shareholders to provide Employee with enhanced financialsecurity and sufficient encouragement to remain with the Company during this stage of the Company’s operations notwithstanding the employmentuncertainties related to a possible Change of Control of the Company. C. In connection with Employee’s employment with the Company, Employee has had and will continue to have access to confidential,proprietary and trade secret information of the Company and its Affiliates (as defined herein) and relating to the business of the Company and its Affiliates,which confidential, proprietary and trade secret information the Company and its Affiliates desire to protect from disclosure and unfair competition. D. By execution of this Agreement, Employee and the Company agree that this Agreement contains the entire agreement between the partieshereto and supersedes all prior agreements (oral or written), negotiations and discussions between the Company and Employee regarding the obligations of theCompany upon a Change of Control of the Company. AGREEMENT In consideration of the foregoing and the mutual promises and covenants set forth below, the parties agree as follows: 1. Change in Control Severance Pay. If a Change of Control occurs on or before the date upon which the Company achieves CommercialProduction (as such term is defined in the Amended and Restated Limited Liability Agreement of Eureka Moly, LLC dated February 26, 2008) and as a resultof the closing of the Change of Control, or during the one-year period immediately following the closing of the Change of Control (i) the Company (or itssuccessor) terminates Employee’s employment without Cause or (ii) Employee terminates employment for Good Reason, then, subject to the conditionsdescribed in Section 3, Employee will be entitled to Severance Pay. The “Severance Pay” will equal the sum of (a) an amount equal to two (2) timesEmployee’s annual base salary (as in effect immediately prior to the closing of the Change of Control), plus (b) an amount equal to 100% of Employee’s targetannual incentive award for one  year (as in effect immediately prior to the closing of the Change of Control), if any, less applicable withholdings. Severance Pay will be in addition to anyaccrued but unpaid salary or paid time off earned through the date of Employee’s termination. 2. Time and Form of Payment. The Severance Pay shall be paid in a lump sum, on a date determined by the Company (or itssuccessor), provided the release described in Section 3 has been executed and is effective and non-revocable, within 60 days following Employee’s separationfrom service, except as required by Section 6(a).3. Conditions. The Company will not be obligated to pay Severance Pay unless: (a) Employee has signed arelease of claims in favor of the Company and its Affiliates and related entities, and their directors, officers, insurers, employees and agents, in a formprescribed by the Company; (b) all applicable rescission periods provided by law for releases of claims have expired and Employee has not rescinded therelease of claims; and (c) Employee is in strict compliance with the terms of this Agreement and any other written agreements between the Company andEmployee as of the dates of such payments. 4. Effect of Change of Control on Equity Awards. Notwithstanding anything to the contrary in any award agreement pursuant to whichan equity-based compensation award has been made to Employee, the effect of a Change in Control (as defined in the Company’s 2006 Equity Incentive Plan,as may be amended from time to time (the “Equity Incentive Plan”)), on any equity-based compensation award granted to Employee while employed by theCompany shall be as provided in Section 12(c) of the Equity Incentive Plan. If and to the extent the vesting and exercisability of any such equity-basedcompensation award has not already been accelerated in full in connection with a Change of Control, as contemplated by clause (ii) of Section 12(c) of theEquity Incentive Plan, then the vesting and exercisability of any such award shall be accelerated in full if Employee’s Termination Date occurs as a result ofthe closing of the Change of Control, or during the one-year period immediately following the closing of the Change of Control under the circumstancesdescribed in Section 1 of this Agreement. 5. Certain Definitions. For purposes of this Agreement the following terms shall have the following meanings: (a) “Cause” means the good faith determination by the Company that: (i) Employee has neglected, failed or refused to perform Employee’s duties (other than as a result of physical or mental illness); (ii) Employee has failed to timely attain the goals assigned to Employee by the Company, in its good faith judgment, from time totime; (iii) Employee has committed an act of personal dishonesty including, without limitation, an act or omission intended to result inpersonal enrichment of Employee at the expense of the Company; (iv) Employee has committed a willful or intentional act that could reasonably be expected to injure the reputation, business, orbusiness relationships of the Company or Employee’s reputation or business relationships; 2 (v) Employee has perpetrated an intentional fraud against or affecting the Company or any customer, supplier, client, agent, oremployee thereof; (vi) Employee has been convicted (including conviction on a nolo contendere, no contest, or similar plea) of a felony or any crimeinvolving fraud, dishonesty, or moral turpitude; or (vii) Employee materially breaches Employee’s obligations under Section 8 of this Agreement. With respect to any of the matters set forth in (i) or (ii) above, the Company shall give Employee notice of the deficiency and a reasonable opportunity tocorrect the deficiency (not to exceed sixty (60) days) prior to termination. In the event that the Company has given notice of a deficiency and makes adetermination that the deficiency has not been cured within a reasonable period of time, Employee’s employment may be terminated for Cause. (b) “Change of Control” means: (i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities ExchangeAct of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)of 50% or more of either (A) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) thecombined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “OutstandingCompany Voting Securities”); provided, however, that, for purposes of this Section 5(b)(i), the following acquisitions shall not constitute a Change ofControl: (x) any acquisition directly from the Company, (y) any acquisition by the Company, or (z) any acquisition by any employee benefit plan (or relatedtrust) sponsored or maintained by the Company or any Affiliate; or (ii) Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involvingthe Company or the acquisition of assets or stock of another entity by the Company (each, a “Business Combination”), in each case unless, following suchBusiness Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stockand the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% ofthe then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election ofdirectors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that, as a result ofsuch transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantiallythe same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the OutstandingCompany Voting Securities, as the case may be, and (B) no Person (excluding any corporation resulting from such Business Combination or any employeebenefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 50%or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business 3 Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed priorto the Business Combination; or (iii) Individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Incumbent Board”) cease for anyreason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election,or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Boardshall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initialassumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatenedsolicitation of proxies or consents by or on behalf of a Person other than the Board; or (iv) A sale or disposition of all or substantially all of the operating assets of the Company to an unrelated party; or (v) Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. (c) “Good Reason” means a material negative change in the service relationship as determined in good faith by Employee of the occurrence ofany of the following conditions, without Employee’s express written consent (i) a material dimunition in Employee’s base compensation; (ii) a materialdimunition in Employee’s authority, duties, or responsibilities; (iii) a material change of more than 50 miles in the geographic location at which Employee isrequired to perform the services;(iv) any direction or requirement that Employee engage in conduct that could reasonably be construed to violate local, state orfederal law; or (v) a material failure by the Company to pay Employee’s annual base salary due Employee in a timely manner. With respect to any of thematters set forth above, Employee shall provide written notice to the Company within ninety (90) days of the initial existence of the Good Reason condition. Upon receipt of such notice, the Company shall have a period of thirty (30) days during which it may remedy the condition and not be required to pay theSeverance Pay in connection with a resignation with Good Reason. 6. Section 409A; Deferred Compensation. (a) Delay in Payment. Notwithstanding anything in this Agreement to the contrary, if Employee is deemed by the Company (or itssuccessor) at the time of Employee’s termination of employment to be a “specified employee,” then any of the Severance Pay that is non-exempt deferredcompensation which would otherwise be payable hereunder shall not be paid until the date which is the first business day following the six-month period afterEmployee’s separation from service (or if earlier, Employee’s death). Such delay in payment shall only be effected to the extent required to avoid adverse taxtreatment to Employee under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). Any payment not subject to such delay,shall be paid pursuant to the time and form of payment specified above. Any compensation which would have otherwise been paid during the delay periodshall be paid to 4 Employee (or Employee’s beneficiary or estate) in a lump sum payment on the first business day following the expiration of the delay period. (b) Key Definitions. For purposes of the Agreement, the term “termination of employment” shall mean “separation from service” as definedin Section 409A. (c) Interpretation. The parties intend that all payments payable under this Agreement will not be subject to the additional tax imposed bySection 409A, and the provisions of this Agreement shall be construed and administered consistent with such intent. To the extent such potential paymentscould become subject to Section 409A, the Company (or its successor) and Employee agree to work together to modify the Agreement to the minimum extentnecessary to reasonably comply with the requirements of Section 409A, provided that the Company (or its successor) shall not be required to pay Employee’staxes or additional compensation and Employee shall be responsible for payment of any and all taxes owed in connection with any payment payable under thisAgreement. 7. Protection of Confidential Information and Trade Secrets. (a) Confidential Information and Trade Secrets. Employee acknowledges that he has received and will continue to receive access to non-public, confidential and proprietary business information and trade secrets about the Company and its Affiliates (“Confidential Information”), that thisConfidential Information was and will be obtained or developed by the Company at great expense and is zealously guarded by the Company fromunauthorized disclosure, and that Employee’s possession of this Confidential Information is due solely to Employee’s employment with the Company. Inrecognition of the foregoing, Employee will not at any time during employment or following termination of employment for any reason, disclose, use or makeotherwise available to any third party any Confidential Information relating to the Company’s or any of its Affiliates’ business, including their products,production methods and development; manufacturing and business methods and techniques; trade secrets, data, specifications, developments, inventions,engineering and research activity; marketing and sales strategies, information and techniques; long and short term plans; current and prospective dealer,customer, vendor, supplier and distributor lists, contacts and information; financial, personnel and information system information; and any otherinformation concerning the business of the Company or its Affiliates. During the term of Employee’s employment with the Company and at all timesthereafter, Employee shall take reasonable steps to protect the confidentiality of Confidential Information and shall refrain from any acts or omissions thatwould reduce the value of Confidential Information to the Company or any of its Affiliates. Employee’s foregoing obligations regarding ConfidentialInformation do not apply to any knowledge or information to the extent that it (i) is now or subsequently becomes generally publicly known or generallyknown in the industry in which the Company operates in the form in which it was obtained from the Company (or its applicable Affiliate), (ii) isindependently made available to Employee in good faith by a third party who has not violated an obligation of confidentiality to the Company or any of itsAffiliates, or (iii) is required by law to be disclosed (but only to the extent such disclosure is required). In the latter event, Employee shall disclose to theCompany the event and authority requiring disclosure “required by law” at the first opportunity upon learning of the disclosure request. Nothing contained inthe preceding sentence shall be interpreted to legitimize any disclosure of Confidential Information by Employee that occurs outside of any of the eventsdescribed in items (i) through (iii) above. The parties acknowledge and agree that Employee’s 5 obligations under this Section 7 to maintain the confidentiality of the Confidential Information are in addition to any obligations of Employee under applicablestatutory or common law. (b) Return of Confidential Information and Trade Secrets. Upon termination of employment with the Company, Employee shall deliverto a designated Company representative all records, documents, hardware, software, and all other property of the Company or any of its Affiliates in whateverform and all copies thereof in Employee’s possession. Employee acknowledges and agrees that all such materials are the sole property of the Company or itsAffiliates and that Employee will certify in writing to the Company at the time of termination that Employee has complied with this obligation. (c) Definition of Affiliate. For purposes of this Section 7 and this entire Agreement, Affiliate” means an individual, a partnership, acorporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, or an unincorporated organization, that directly, orindirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company. (d) Acknowledgements. Employee acknowledges that Confidential Information constitutes a unique and valuable asset of the Company andits Affiliates and represents a substantial investment of time and expense by the Company and its Affiliates. Employee acknowledges that he holds amanagement position with the Company, that he is employed in a decision-making capacity and exercises direction, control and supervision over a materialpart of the Company’s business. Employee further acknowledges that the provisions of this Section 7 are reasonable and necessary to protect the legitimateinterests of the Company and its Affiliates, and that any violation of this Section 7 by Employee would cause substantial and irreparable harm to theCompany and its Affiliates to such an extent that monetary damages alone would be an inadequate remedy. Therefore, in the event that Employee violates anyprovision of this Section 7, the Company and its Affiliates shall be entitled to immediate injunctive relief (without the necessity of proving actual damages orposting bond, or if a bond is required, a bond in the amount of $1,000 is deemed sufficient), in addition to all the other remedies it or they may have,restraining Employee from violating or continuing to violate such provision. 8. Non-Solicitation. (a) Restrictions. (i) Employee specifically acknowledges that the Confidential Information described in Section 7(a) includes confidential and tradesecret data pertaining to current and prospective customers of the Company, that such data is a valuable and unique asset of the Company’s business and thatthe success or failure of the Company’s specialized business is dependent in large part upon the Company’s ability to establish and maintain close andcontinuing personal contacts and working relationships with such customers and to develop proposals which are specifically designed to meet therequirements of such customers. Therefore, during Employee’s employment with the Company and for the twelve (12) months following termination ofemployment for any reason, except on behalf of the Company or with the Company’s prior written consent, Employee is prohibited from soliciting, eitherdirectly or indirectly, on his own behalf or on behalf of any other person or entity, all such customers with 6 whom Employee had contact during the twenty-four (24) months preceding Employee’s termination of employment. (ii) Employee specifically acknowledges that the Confidential Information described in Section 7(a) also includes confidential andtrade secret data pertaining to current and prospective employees and agents of the Company, and Employee further agrees that during Employee’s employmentwith the Company and for the twelve (12) months following termination of employment for any reason, Employee will not directly or indirectly solicit, on hisown behalf or on behalf of any other person or entity, the services of any person who is an employee or agent of the Company or solicit any of the Company’semployees or agents to terminate their employment or agency with the Company. (iii) Employee further agrees that, during Employee’s employment with the Company and for the twelve (12) months followingtermination of employment for any reason, Employee will do nothing to interfere with any of the Company’s business relationships. (b) Acknowledgements. Employee acknowledges that the provisions of this Section 8 are reasonable and necessary to protect the legitimateinterests of the Company and its Affiliates, including without limitation trade secrets, customer and supplier relationships, goodwill and loyalty, and that anyviolation of this Section 8 by Employee would cause substantial and irreparable harm to the Company and its Affiliates to such an extent that monetarydamages alone would be an inadequate remedy. Therefore, in the event that Employee violates any provision of this Section 8, the Company and its Affiliatesshall be entitled to immediate injunctive relief (without the necessity of proving actual damages or posting bond, or if a bond is required, a bond in the amountof $1,000 is deemed sufficient), in addition to all the other remedies it or they may have, restraining Employee from violating or continuing to violate suchprovision. (c) Modification. If the duration of, the scope of or any business activity covered by any provision of this Section 8 is in excess of what isvalid and enforceable under applicable law, such provision shall be construed to cover only that duration, scope or activity that is valid and enforceable. Employee and the Company agree that this Section 8 shall be given the construction which renders its provisions valid and enforceable to the maximum extent,not exceeding its express terms, possible under applicable law. 9. Parachute Payment Restrictions. (a) Restrictions. If any payments or benefits (including payments and benefits pursuant to this Agreement or under other compensatoryarrangements involving the Employee, including equity-based incentive awards (the “other arrangements”)) in the nature of compensation that the Employeewould receive in connection with a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of theCompany (collectively, “Transaction Payments”) would collectively constitute a “parachute payment” within the meaning of Section 280G of the Code, and ifthe “net after-tax amount” of such parachute payment to the Employee is less than what the net after-tax amount to the Employee would be if the TransactionPayments otherwise constituting the parachute payment were limited to the maximum “parachute value” of Transaction Payments that the Employee couldreceive without giving rise to any liability for any excise tax imposed by Section 4999 of 7 the Code (the “Excise Tax”), then the Transaction Payments otherwise constituting the parachute payment shall be reduced so that the parachute value of allTransaction Payments, in the aggregate, will equal the maximum parachute value of all Transaction Payments that the Employee can receive without anyTransaction Payments being subject to the Excise Tax. Should such a reduction in Transaction Payments be required, the Employee shall be entitled, subjectto the following sentence, to designate those Transaction Payments under this Agreement or the other arrangements that will be reduced or eliminated so as toachieve the specified reduction in Transaction Payments to the Employee and avoid characterization of such Transaction Payments as a parachute payment. The Company will provide the Employee with all information reasonably requested by the Employee to permit the Employee to make such designation. Tothe extent that the Employee’s ability to make such a designation would cause any of the Transaction Payments to become subject to any additional tax underCode Section 409A, or if the Employee fails to make such a designation within ten business days of receiving the requested information from the Company,then the Company shall achieve the necessary reduction in the Transaction Payments by reducing them in the following order: (i) reduction of cash paymentspayable under this Agreement; (ii) reduction of other payments and benefits to be provided to the Employee; (iii) cancellation or reduction of accelerated vestingof equity-based awards that are subject to performance-based vesting conditions; and (iv) cancellation or reduction of accelerated vesting of equity-basedawards that are subject only to service-based vesting conditions. If the acceleration of the vesting of Employee’s equity-based awards is to be cancelled orreduced, such acceleration of vesting shall be reduced or cancelled in the reverse order of the date of grant. For purposes of this Section 9, a “net after-taxamount” shall be determined by taking into account all applicable income, excise and employment taxes, whether imposed at the federal, state or local level,including the Excise Tax, and the “parachute value” of a Transaction Payment means the present value as of the date of the Change of Control for purposes ofSection 280G of the Code of the portion of such Transaction Payment that constitutes a parachute payment under Section 280G(b)(2) of the Code. (b) Use of Independent Accounting Firm. The independent registered public accounting firm engaged by the Company for general auditpurposes as of the day prior to the effective date of the Change of Control may be utilized by the Compensation Committee to make all determinations requiredto be made under this Section 9. If the independent registered public accounting firm so engaged by the Company is serving as accountant or auditor for theindividual, entity or group effecting the Change of Control, the Compensation Committee may appoint another nationally recognized independent registeredpublic accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by any suchindependent registered public accounting firm retained hereunder. Any good faith determinations of the accounting firm made hereunder shall be final, bindingand conclusive upon the Company and Employee. 10. At-Will Employment. This Agreement does not modify Employee’s status as an employee-at-will. The parties acknowledge thatEmployee is an employee-at-will and that Employee’s services may be terminated by the Company at any time with or without Cause. 11. Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof, nor toaffect the meaning thereof. 8 12. Governing Law; Jurisdiction. This Agreement shall be governed by and construed under Colorado law, without regard to its conflictof laws principles. The parties agree that any litigation in any way relating to this Agreement shall be venued in either federal or state court in Jefferson County,Colorado, and Employee hereby consents to the personal jurisdiction of these courts and waives any objection that such venue is inconvenient or improper. 13. Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW, EMPLOYEE AND COMPANY HEREBYIRREVOCABLY AND EXPRESSLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, ORENFORCEMENT THEREOF. 14. Employee’s Right to Recover Attorneys’ Fees and Costs. In the event of any litigation concerning any controversy, claim or disputebetween the parties hereto, arising out of or relating to this Agreement, the breach hereof or the interpretation hereof, Employee will be entitled to recover from theCompany Employee’s reasonable expenses, attorneys’ fees, and costs incurred therein or in the enforcement or collection of any judgment or award renderedtherein if (and only if) Employee is the prevailing party. The “prevailing party” means the party determined by the court to have most nearly prevailed, even ifsuch party did not prevail in all matters, not necessarily the party in whose favor a judgment is rendered. 15. Complete Agreement; Amendments. The foregoing is the entire agreement of the parties with respect to the subject matter hereof,excepting those documents identified herein to be signed by the Employee and the Company, and may not be amended, supplemented, canceled or dischargedexcept by written instrument executed by both parties hereto. This Agreement supersedes any and all prior agreements among the Company and Employee withrespect to the matters covered herein. 16. Invalidity. The invalidity or lack of enforceability of any particular provision in this Agreement shall not affect the other provisionshereof, and this Agreement shall be construed in all other respects as though such invalid or unenforceable provisions were permitted. Moreover, the partiesagree to replace or have a Court replace such invalid provisions with a substitute provision that will satisfy the intent of the parties. 17. Survival. Upon the expiration or termination of this Agreement for any reason, the provisions of this Section and the covenants of theparties herein shall survive and remain in full force and effect. 18. Binding Obligations. The Employee and the Company acknowledge and understand that, unless expressly stated above, Employee’sobligations hereunder shall not be affected by the reasons for, circumstances of, or identity of the party who initiates the termination of Employee’semployment with the Company. 9 IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below to be effective as of the Effective Date. GENERAL MOLY, INC.The Company By:/s/ R. Scott Roswell Date:12/29/11 EMPLOYEE — Robert I. Pennington By:/s/ Robert I. Pennington Date:12/29/2011 10Exhibit 10.40 CHANGE OF CONTROL SEVERANCE, CONFIDENTIALITYAND NON-SOLICITATION AGREEMENT This Change of Control Severance, Confidentiality and Non-Solicitation Agreement (the “Agreement”) is entered into between GENERAL MOLY,INC., a Delaware corporation (the “Company”) and Lee M. Shumway (“Employee”) to be effective as of January 1, 2012 (the “Effective Date”). Certaincapitalized terms used in this Agreement are defined in Section 5 below. RECITALS A. The Company has retained Employee to perform services that are important to the long-term success of the Company. Employee and theCompany acknowledge that Employee’s services are of a senior managerial nature and that in conducting the Company’s business Employee will be in adecision-making capacity and will exercise direction, control and supervision over a material part of the Company’s business. B. The Company believes that it is in the best interests of the Company and its shareholders to provide Employee with enhanced financialsecurity and sufficient encouragement to remain with the Company during this stage of the Company’s operations notwithstanding the employmentuncertainties related to a possible Change of Control of the Company. C. In connection with Employee’s employment with the Company, Employee has had and will continue to have access to confidential,proprietary and trade secret information of the Company and its Affiliates (as defined herein) and relating to the business of the Company and its Affiliates,which confidential, proprietary and trade secret information the Company and its Affiliates desire to protect from disclosure and unfair competition. D. By execution of this Agreement, Employee and the Company agree that this Agreement contains the entire agreement between the partieshereto and supersedes all prior agreements (oral or written), negotiations and discussions between the Company and Employee regarding the obligations of theCompany upon a Change of Control of the Company. AGREEMENT In consideration of the foregoing and the mutual promises and covenants set forth below, the parties agree as follows: 1. Change in Control Severance Pay. If a Change of Control occurs on or before the date upon which the Company achieves CommercialProduction (as such term is defined in the Amended and Restated Limited Liability Agreement of Eureka Moly, LLC dated February 26, 2008) and as a resultof the closing of the Change of Control, or during the one-year period immediately following the closing of the Change of Control (i) the Company (or itssuccessor) terminates Employee’s employment without Cause or (ii) Employee terminates employment for Good Reason, then, subject to the conditionsdescribed in Section 3, Employee will be entitled to Severance Pay. The “Severance Pay” will equal the sum of (a) an amount equal to two (2) timesEmployee’s annual base salary (as in effect immediately prior to the closing of the Change of Control), plus (b) an amount equal to 100% of Employee’s targetannual incentive award for one  year (as in effect immediately prior to the closing of the Change of Control), if any, less applicable withholdings. Severance Pay will be in addition to anyaccrued but unpaid salary or paid time off earned through the date of Employee’s termination. 2. Time and Form of Payment. The Severance Pay shall be paid in a lump sum, on a date determined by the Company (or itssuccessor), provided the release described in Section 3 has been executed and is effective and non-revocable, within 60 days following Employee’s separationfrom service, except as required by Section 6(a).3. Conditions. The Company will not be obligated to pay Severance Pay unless: (a) Employee has signed arelease of claims in favor of the Company and its Affiliates and related entities, and their directors, officers, insurers, employees and agents, in a formprescribed by the Company; (b) all applicable rescission periods provided by law for releases of claims have expired and Employee has not rescinded therelease of claims; and (c) Employee is in strict compliance with the terms of this Agreement and any other written agreements between the Company andEmployee as of the dates of such payments. 4. Effect of Change of Control on Equity Awards. Notwithstanding anything to the contrary in any award agreement pursuant to whichan equity-based compensation award has been made to Employee, the effect of a Change in Control (as defined in the Company’s 2006 Equity Incentive Plan,as may be amended from time to time (the “Equity Incentive Plan”)), on any equity-based compensation award granted to Employee while employed by theCompany shall be as provided in Section 12(c) of the Equity Incentive Plan. If and to the extent the vesting and exercisability of any such equity-basedcompensation award has not already been accelerated in full in connection with a Change of Control, as contemplated by clause (ii) of Section 12(c) of theEquity Incentive Plan, then the vesting and exercisability of any such award shall be accelerated in full if Employee’s Termination Date occurs as a result ofthe closing of the Change of Control, or during the one-year period immediately following the closing of the Change of Control under the circumstancesdescribed in Section 1 of this Agreement. 5. Certain Definitions. For purposes of this Agreement the following terms shall have the following meanings: (a) “Cause” means the good faith determination by the Company that: (i) Employee has neglected, failed or refused to perform Employee’s duties (other than as a result of physical or mental illness); (ii) Employee has failed to timely attain the goals assigned to Employee by the Company, in its good faith judgment, from time totime; (iii) Employee has committed an act of personal dishonesty including, without limitation, an act or omission intended to result inpersonal enrichment of Employee at the expense of the Company; (iv) Employee has committed a willful or intentional act that could reasonably be expected to injure the reputation, business, orbusiness relationships of the Company or Employee’s reputation or business relationships; 2 (v) Employee has perpetrated an intentional fraud against or affecting the Company or any customer, supplier, client, agent, oremployee thereof; (vi) Employee has been convicted (including conviction on a nolo contendere, no contest, or similar plea) of a felony or any crimeinvolving fraud, dishonesty, or moral turpitude; or (vii) Employee materially breaches Employee’s obligations under Section 8 of this Agreement. With respect to any of the matters set forth in (i) or (ii) above, the Company shall give Employee notice of the deficiency and a reasonable opportunity tocorrect the deficiency (not to exceed sixty (60) days) prior to termination. In the event that the Company has given notice of a deficiency and makes adetermination that the deficiency has not been cured within a reasonable period of time, Employee’s employment may be terminated for Cause. (b) “Change of Control” means: (i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities ExchangeAct of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)of 50% or more of either (A) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) thecombined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “OutstandingCompany Voting Securities”); provided, however, that, for purposes of this Section 5(b)(i), the following acquisitions shall not constitute a Change ofControl: (x) any acquisition directly from the Company, (y) any acquisition by the Company, or (z) any acquisition by any employee benefit plan (or relatedtrust) sponsored or maintained by the Company or any Affiliate; or (ii) Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involvingthe Company or the acquisition of assets or stock of another entity by the Company (each, a “Business Combination”), in each case unless, following suchBusiness Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stockand the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% ofthe then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election ofdirectors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that, as a result ofsuch transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantiallythe same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the OutstandingCompany Voting Securities, as the case may be, and (B) no Person (excluding any corporation resulting from such Business Combination or any employeebenefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 50%or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business 3 Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed priorto the Business Combination; or (iii) Individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Incumbent Board”) cease for anyreason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election,or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Boardshall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initialassumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatenedsolicitation of proxies or consents by or on behalf of a Person other than the Board; or (iv) A sale or disposition of all or substantially all of the operating assets of the Company to an unrelated party; or (v) Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. (c) “Good Reason” means a material negative change in the service relationship as determined in good faith by Employee of the occurrence ofany of the following conditions, without Employee’s express written consent (i) a material dimunition in Employee’s base compensation; (ii) a materialdimunition in Employee’s authority, duties, or responsibilities; (iii) a material change of more than 50 miles in the geographic location at which Employee isrequired to perform the services;(iv) any direction or requirement that Employee engage in conduct that could reasonably be construed to violate local, state orfederal law; or (v) a material failure by the Company to pay Employee’s annual base salary due Employee in a timely manner. With respect to any of thematters set forth above, Employee shall provide written notice to the Company within ninety (90) days of the initial existence of the Good Reason condition. Upon receipt of such notice, the Company shall have a period of thirty (30) days during which it may remedy the condition and not be required to pay theSeverance Pay in connection with a resignation with Good Reason. 6. Section 409A; Deferred Compensation. (a) Delay in Payment. Notwithstanding anything in this Agreement to the contrary, if Employee is deemed by the Company (or itssuccessor) at the time of Employee’s termination of employment to be a “specified employee,” then any of the Severance Pay that is non-exempt deferredcompensation which would otherwise be payable hereunder shall not be paid until the date which is the first business day following the six-month period afterEmployee’s separation from service (or if earlier, Employee’s death). Such delay in payment shall only be effected to the extent required to avoid adverse taxtreatment to Employee under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). Any payment not subject to such delay,shall be paid pursuant to the time and form of payment specified above. Any compensation which would have otherwise been paid during the delay periodshall be paid to 4 Employee (or Employee’s beneficiary or estate) in a lump sum payment on the first business day following the expiration of the delay period. (b) Key Definitions. For purposes of the Agreement, the term “termination of employment” shall mean “separation from service” as definedin Section 409A. (c) Interpretation. The parties intend that all payments payable under this Agreement will not be subject to the additional tax imposed bySection 409A, and the provisions of this Agreement shall be construed and administered consistent with such intent. To the extent such potential paymentscould become subject to Section 409A, the Company (or its successor) and Employee agree to work together to modify the Agreement to the minimum extentnecessary to reasonably comply with the requirements of Section 409A, provided that the Company (or its successor) shall not be required to pay Employee’staxes or additional compensation and Employee shall be responsible for payment of any and all taxes owed in connection with any payment payable under thisAgreement. 7. Protection of Confidential Information and Trade Secrets. (a) Confidential Information and Trade Secrets. Employee acknowledges that he has received and will continue to receive access to non-public, confidential and proprietary business information and trade secrets about the Company and its Affiliates (“Confidential Information”), that thisConfidential Information was and will be obtained or developed by the Company at great expense and is zealously guarded by the Company fromunauthorized disclosure, and that Employee’s possession of this Confidential Information is due solely to Employee’s employment with the Company. Inrecognition of the foregoing, Employee will not at any time during employment or following termination of employment for any reason, disclose, use or makeotherwise available to any third party any Confidential Information relating to the Company’s or any of its Affiliates’ business, including their products,production methods and development; manufacturing and business methods and techniques; trade secrets, data, specifications, developments, inventions,engineering and research activity; marketing and sales strategies, information and techniques; long and short term plans; current and prospective dealer,customer, vendor, supplier and distributor lists, contacts and information; financial, personnel and information system information; and any otherinformation concerning the business of the Company or its Affiliates. During the term of Employee’s employment with the Company and at all timesthereafter, Employee shall take reasonable steps to protect the confidentiality of Confidential Information and shall refrain from any acts or omissions thatwould reduce the value of Confidential Information to the Company or any of its Affiliates. Employee’s foregoing obligations regarding ConfidentialInformation do not apply to any knowledge or information to the extent that it (i) is now or subsequently becomes generally publicly known or generallyknown in the industry in which the Company operates in the form in which it was obtained from the Company (or its applicable Affiliate), (ii) isindependently made available to Employee in good faith by a third party who has not violated an obligation of confidentiality to the Company or any of itsAffiliates, or (iii) is required by law to be disclosed (but only to the extent such disclosure is required). In the latter event, Employee shall disclose to theCompany the event and authority requiring disclosure “required by law” at the first opportunity upon learning of the disclosure request. Nothing contained inthe preceding sentence shall be interpreted to legitimize any disclosure of Confidential Information by Employee that occurs outside of any of the eventsdescribed in items (i) through (iii) above. The parties acknowledge and agree that Employee’s 5 obligations under this Section 7 to maintain the confidentiality of the Confidential Information are in addition to any obligations of Employee under applicablestatutory or common law. (b) Return of Confidential Information and Trade Secrets. Upon termination of employment with the Company, Employee shall deliverto a designated Company representative all records, documents, hardware, software, and all other property of the Company or any of its Affiliates in whateverform and all copies thereof in Employee’s possession. Employee acknowledges and agrees that all such materials are the sole property of the Company or itsAffiliates and that Employee will certify in writing to the Company at the time of termination that Employee has complied with this obligation. (c) Definition of Affiliate. For purposes of this Section 7 and this entire Agreement, Affiliate” means an individual, a partnership, acorporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, or an unincorporated organization, that directly, orindirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company. (d) Acknowledgements. Employee acknowledges that Confidential Information constitutes a unique and valuable asset of the Company andits Affiliates and represents a substantial investment of time and expense by the Company and its Affiliates. Employee acknowledges that he holds amanagement position with the Company, that he is employed in a decision-making capacity and exercises direction, control and supervision over a materialpart of the Company’s business. Employee further acknowledges that the provisions of this Section 7 are reasonable and necessary to protect the legitimateinterests of the Company and its Affiliates, and that any violation of this Section 7 by Employee would cause substantial and irreparable harm to theCompany and its Affiliates to such an extent that monetary damages alone would be an inadequate remedy. Therefore, in the event that Employee violates anyprovision of this Section 7, the Company and its Affiliates shall be entitled to immediate injunctive relief (without the necessity of proving actual damages orposting bond, or if a bond is required, a bond in the amount of $1,000 is deemed sufficient), in addition to all the other remedies it or they may have,restraining Employee from violating or continuing to violate such provision. 8. Non-Solicitation. (a) Restrictions. (i) Employee specifically acknowledges that the Confidential Information described in Section 7(a) includes confidential and tradesecret data pertaining to current and prospective customers of the Company, that such data is a valuable and unique asset of the Company’s business and thatthe success or failure of the Company’s specialized business is dependent in large part upon the Company’s ability to establish and maintain close andcontinuing personal contacts and working relationships with such customers and to develop proposals which are specifically designed to meet therequirements of such customers. Therefore, during Employee’s employment with the Company and for the twelve (12) months following termination ofemployment for any reason, except on behalf of the Company or with the Company’s prior written consent, Employee is prohibited from soliciting, eitherdirectly or indirectly, on his own behalf or on behalf of any other person or entity, all such customers with 6 whom Employee had contact during the twenty-four (24) months preceding Employee’s termination of employment. (ii) Employee specifically acknowledges that the Confidential Information described in Section 7(a) also includes confidential andtrade secret data pertaining to current and prospective employees and agents of the Company, and Employee further agrees that during Employee’s employmentwith the Company and for the twelve (12) months following termination of employment for any reason, Employee will not directly or indirectly solicit, on hisown behalf or on behalf of any other person or entity, the services of any person who is an employee or agent of the Company or solicit any of the Company’semployees or agents to terminate their employment or agency with the Company. (iii) Employee further agrees that, during Employee’s employment with the Company and for the twelve (12) months followingtermination of employment for any reason, Employee will do nothing to interfere with any of the Company’s business relationships. (b) Acknowledgements. Employee acknowledges that the provisions of this Section 8 are reasonable and necessary to protect the legitimateinterests of the Company and its Affiliates, including without limitation trade secrets, customer and supplier relationships, goodwill and loyalty, and that anyviolation of this Section 8 by Employee would cause substantial and irreparable harm to the Company and its Affiliates to such an extent that monetarydamages alone would be an inadequate remedy. Therefore, in the event that Employee violates any provision of this Section 8, the Company and its Affiliatesshall be entitled to immediate injunctive relief (without the necessity of proving actual damages or posting bond, or if a bond is required, a bond in the amountof $1,000 is deemed sufficient), in addition to all the other remedies it or they may have, restraining Employee from violating or continuing to violate suchprovision. (c) Modification. If the duration of, the scope of or any business activity covered by any provision of this Section 8 is in excess of what isvalid and enforceable under applicable law, such provision shall be construed to cover only that duration, scope or activity that is valid and enforceable. Employee and the Company agree that this Section 8 shall be given the construction which renders its provisions valid and enforceable to the maximum extent,not exceeding its express terms, possible under applicable law. 9. Parachute Payment Restrictions. (a) Restrictions. If any payments or benefits (including payments and benefits pursuant to this Agreement or under other compensatoryarrangements involving the Employee, including equity-based incentive awards (the “other arrangements”)) in the nature of compensation that the Employeewould receive in connection with a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of theCompany (collectively, “Transaction Payments”) would collectively constitute a “parachute payment” within the meaning of Section 280G of the Code, and ifthe “net after-tax amount” of such parachute payment to the Employee is less than what the net after-tax amount to the Employee would be if the TransactionPayments otherwise constituting the parachute payment were limited to the maximum “parachute value” of Transaction Payments that the Employee couldreceive without giving rise to any liability for any excise tax imposed by Section 4999 of 7 the Code (the “Excise Tax”), then the Transaction Payments otherwise constituting the parachute payment shall be reduced so that the parachute value of allTransaction Payments, in the aggregate, will equal the maximum parachute value of all Transaction Payments that the Employee can receive without anyTransaction Payments being subject to the Excise Tax. Should such a reduction in Transaction Payments be required, the Employee shall be entitled, subjectto the following sentence, to designate those Transaction Payments under this Agreement or the other arrangements that will be reduced or eliminated so as toachieve the specified reduction in Transaction Payments to the Employee and avoid characterization of such Transaction Payments as a parachute payment. The Company will provide the Employee with all information reasonably requested by the Employee to permit the Employee to make such designation. Tothe extent that the Employee’s ability to make such a designation would cause any of the Transaction Payments to become subject to any additional tax underCode Section 409A, or if the Employee fails to make such a designation within ten business days of receiving the requested information from the Company,then the Company shall achieve the necessary reduction in the Transaction Payments by reducing them in the following order: (i) reduction of cash paymentspayable under this Agreement; (ii) reduction of other payments and benefits to be provided to the Employee; (iii) cancellation or reduction of accelerated vestingof equity-based awards that are subject to performance-based vesting conditions; and (iv) cancellation or reduction of accelerated vesting of equity-basedawards that are subject only to service-based vesting conditions. If the acceleration of the vesting of Employee’s equity-based awards is to be cancelled orreduced, such acceleration of vesting shall be reduced or cancelled in the reverse order of the date of grant. For purposes of this Section 9, a “net after-taxamount” shall be determined by taking into account all applicable income, excise and employment taxes, whether imposed at the federal, state or local level,including the Excise Tax, and the “parachute value” of a Transaction Payment means the present value as of the date of the Change of Control for purposes ofSection 280G of the Code of the portion of such Transaction Payment that constitutes a parachute payment under Section 280G(b)(2) of the Code. (b) Use of Independent Accounting Firm. The independent registered public accounting firm engaged by the Company for general auditpurposes as of the day prior to the effective date of the Change of Control may be utilized by the Compensation Committee to make all determinations requiredto be made under this Section 9. If the independent registered public accounting firm so engaged by the Company is serving as accountant or auditor for theindividual, entity or group effecting the Change of Control, the Compensation Committee may appoint another nationally recognized independent registeredpublic accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by any suchindependent registered public accounting firm retained hereunder. Any good faith determinations of the accounting firm made hereunder shall be final, bindingand conclusive upon the Company and Employee. 10. At-Will Employment. This Agreement does not modify Employee’s status as an employee-at-will. The parties acknowledge thatEmployee is an employee-at-will and that Employee’s services may be terminated by the Company at any time with or without Cause. 11. Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof, nor toaffect the meaning thereof. 8 12. Governing Law; Jurisdiction. This Agreement shall be governed by and construed under Colorado law, without regard to its conflictof laws principles. The parties agree that any litigation in any way relating to this Agreement shall be venued in either federal or state court in Jefferson County,Colorado, and Employee hereby consents to the personal jurisdiction of these courts and waives any objection that such venue is inconvenient or improper. 13. Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW, EMPLOYEE AND COMPANY HEREBYIRREVOCABLY AND EXPRESSLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, ORENFORCEMENT THEREOF. 14. Employee’s Right to Recover Attorneys’ Fees and Costs. In the event of any litigation concerning any controversy, claim or disputebetween the parties hereto, arising out of or relating to this Agreement, the breach hereof or the interpretation hereof, Employee will be entitled to recover from theCompany Employee’s reasonable expenses, attorneys’ fees, and costs incurred therein or in the enforcement or collection of any judgment or award renderedtherein if (and only if) Employee is the prevailing party. The “prevailing party” means the party determined by the court to have most nearly prevailed, even ifsuch party did not prevail in all matters, not necessarily the party in whose favor a judgment is rendered. 15. Complete Agreement; Amendments. The foregoing is the entire agreement of the parties with respect to the subject matter hereof,excepting those documents identified herein to be signed by the Employee and the Company, and may not be amended, supplemented, canceled or dischargedexcept by written instrument executed by both parties hereto. This Agreement supersedes any and all prior agreements among the Company and Employee withrespect to the matters covered herein. 16. Invalidity. The invalidity or lack of enforceability of any particular provision in this Agreement shall not affect the other provisionshereof, and this Agreement shall be construed in all other respects as though such invalid or unenforceable provisions were permitted. Moreover, the partiesagree to replace or have a Court replace such invalid provisions with a substitute provision that will satisfy the intent of the parties. 17. Survival. Upon the expiration or termination of this Agreement for any reason, the provisions of this Section and the covenants of theparties herein shall survive and remain in full force and effect. 18. Binding Obligations. The Employee and the Company acknowledge and understand that, unless expressly stated above, Employee’sobligations hereunder shall not be affected by the reasons for, circumstances of, or identity of the party who initiates the termination of Employee’semployment with the Company. 9 IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below to be effective as of the Effective Date. GENERAL MOLY, INC.The Company By:/s/ R. Scott Roswell Date:12/29/2011 EMPLOYEE — Lee M. Shumway By:/s/ Lee. M. Shumway Date:12/29/2011 10Exhibit 10.46 OPTION TO AMEND SECURITIES PURCHASE AGREEMENT THIS OPTION TO AMEND SECURITIES PURCHASE AGREEMENT, dated January 9, 2012, (this “Option to Amend”), is between GeneralMoly, Inc., a Delaware corporation, (the “Company”), and Hanlong (USA) Mining Investment, Inc., a Delaware corporation, (“Purchaser”). Capitalized termsused, but not defined herein, shall have the meanings assigned to them in the Agreement, as defined below. RECITALS A. The Company and Purchaser are parties to the Securities Purchase Agreement, dated March 4, 2010 (as amended by Amendment No. 1 toSecurities Purchase Agreement, dated July 30, 2010, Amendment No. 2 and Waiver to Securities Purchase Agreement, dated October 26, 2010, AmendmentNo. 3 to Securities Purchase Agreement, dated December 20, 2010, Amendment No. 4 to Securities Purchase Agreement, dated July 7 ,2011, and as furtheramended, restated or replaced, the “Agreement”); and B. The parties desire to provide the Company with the option to amend the Agreement to modify dates for specified payments provided in theAgreement. Accordingly, in consideration of the mutual covenants contained in this Amendment, the parties intending to be legally bound agree as follows. AGREEMENT The Company may, at is option amend the Agreement by written notice to Purchaser delivered (in the manner specified in the Agreement) on or beforeDecember 31, 2012, to provide that the payments specified in the last sentence of Section 7.2(e) shall be payable on April 30, 2013 (or credited against theArrangement Fee), instead of as provided in Section 7.2(e). Except as may be amended by the Company upon exercise of this Option, the Agreement shall remain in full force and effect. [Signature page follows]  IN WITNESS WHEREOF, the parties have executed this Amendment to be effective as of the date first above written. GENERAL MOLY, INC. By:/s/ Bruce D. Hansen Name:Bruce D. Hansen Title:Chief Executive Officer HANLONG (USA) MINING INVESTMENT, INC. By:/s/ Nelson Feng Chen Name:Nelson Feng Chen Title:Director Exhibit 10.51 OPTION TO AMEND BRIDGE LOAN AGREEMENT OPTION TO AMEND BRIDGE LOAN AGREEMENT, dated January 9 , 2012, (this “Option to Amend”), is between General Moly, Inc., aDelaware corporation, (the “Company”), and Hanlong (USA) Mining Investment, Inc., a Delaware corporation, (“Lender”). RECITALS The Company and Lender are parties to the Bridge Loan Agreement, dated March 4, 2010 (as amended by that certain Amendment No. 1 to BridgeLoan Agreement, dated July 30, 2010, Amendment No. 2 to Bridge Loan Agreement dated July 7, 2011, and as further amended, restated or replaced the“Agreement”) and desire to enter into an agreement by which the Company may at its option, further amend the Agreement to provide for an extended MaturityDate. Undefined capitalized terms used herein have the respective meanings set forth in the Agreement. Accordingly, in consideration of the mutual covenants contained in this Option to Amend, the parties intending to be legally bound agree as follows. AGREEMENT The Company may by written notice to Lender delivered on or before December 30, 2012 (in the manner provided in the Bridge Loan Agreement), atis option amend the Bridge Loan Agreement to extend the Maturity Date of the Loan to April 30, 2013. Except as may be amended by the Company upon exercise of this Option, the Agreement shall remain in full force and effect. [Signature page follows]  GENERAL MOLY, INC. By:/s/ Bruce D. Hansen Name:Bruce D. Hansen Title:Chief Executive Officer HANLONG (USA) MINING INVESTMENT, INC. By:/s/ Nelson Feng Chen Name:Nelson Feng Chen Title:Director Exhibit 10.60CHANGE OF CONTROL SEVERANCE, CONFIDENTIALITYAND NON-SOLICITATION AGREEMENT This Change of Control Severance, Confidentiality and Non-Solicitation Agreement (the “Agreement”) is entered into between GENERAL MOLY,INC., a Delaware corporation (the “Company”) and Robert Scott Roswell (“Employee”) to be effective as of January 1, 2012 (the “Effective Date”). Certaincapitalized terms used in this Agreement are defined in Section 5 below. RECITALS A. The Company has retained Employee to perform services that are important to the long-term success of the Company. Employee and theCompany acknowledge that Employee’s services are of a senior managerial nature and that in conducting the Company’s business Employee will be in adecision-making capacity and will exercise direction, control and supervision over a material part of the Company’s business. B. The Company believes that it is in the best interests of the Company and its shareholders to provide Employee with enhanced financialsecurity and sufficient encouragement to remain with the Company during this stage of the Company’s operations notwithstanding the employmentuncertainties related to a possible Change of Control of the Company. C. In connection with Employee’s employment with the Company, Employee has had and will continue to have access to confidential,proprietary and trade secret information of the Company and its Affiliates (as defined herein) and relating to the business of the Company and its Affiliates,which confidential, proprietary and trade secret information the Company and its Affiliates desire to protect from disclosure and unfair competition. D. By execution of this Agreement, Employee and the Company agree that this Agreement contains the entire agreement between the partieshereto and supersedes all prior agreements (oral or written), negotiations and discussions between the Company and Employee regarding the obligations of theCompany upon a Change of Control of the Company. AGREEMENT In consideration of the foregoing and the mutual promises and covenants set forth below, the parties agree as follows: 1. Change in Control Severance Pay. If a Change of Control occurs on or before the date upon which the Company achieves CommercialProduction (as such term is defined in the Amended and Restated Limited Liability Agreement of Eureka Moly, LLC dated February 26, 2008) and as a resultof the closing of the Change of Control, or during the one-year period immediately following the closing of the Change of Control (i) the Company (or itssuccessor) terminates Employee’s employment without Cause or (ii) Employee terminates employment for Good Reason, then, subject to the conditionsdescribed in Section 3, Employee will be entitled to Severance Pay. The “Severance Pay” will equal the sum of (a) an amount equal to two (2) timesEmployee’s annual base salary (as in effect immediately prior to the closing of the Change of Control), plus (b) an amount equal to 100% of Employee’s targetannual incentive award for one  year (as in effect immediately prior to the closing of the Change of Control), if any, less applicable withholdings. Severance Pay will be in addition to anyaccrued but unpaid salary or paid time off earned through the date of Employee’s termination. 2. Time and Form of Payment. The Severance Pay shall be paid in a lump sum, on a date determined by the Company (or itssuccessor), provided the release described in Section 3 has been executed and is effective and non-revocable, within 60 days following Employee’s separationfrom service, except as required by Section 6(a).3. Conditions. The Company will not be obligated to pay Severance Pay unless: (a) Employee has signed arelease of claims in favor of the Company and its Affiliates and related entities, and their directors, officers, insurers, employees and agents, in a formprescribed by the Company; (b) all applicable rescission periods provided by law for releases of claims have expired and Employee has not rescinded therelease of claims; and (c) Employee is in strict compliance with the terms of this Agreement and any other written agreements between the Company andEmployee as of the dates of such payments. 4. Effect of Change of Control on Equity Awards. Notwithstanding anything to the contrary in any award agreement pursuant to whichan equity-based compensation award has been made to Employee, the effect of a Change in Control (as defined in the Company’s 2006 Equity Incentive Plan,as may be amended from time to time (the “Equity Incentive Plan”)), on any equity-based compensation award granted to Employee while employed by theCompany shall be as provided in Section 12(c) of the Equity Incentive Plan. If and to the extent the vesting and exercisability of any such equity-basedcompensation award has not already been accelerated in full in connection with a Change of Control, as contemplated by clause (ii) of Section 12(c) of theEquity Incentive Plan, then the vesting and exercisability of any such award shall be accelerated in full if Employee’s Termination Date occurs as a result ofthe closing of the Change of Control, or during the one-year period immediately following the closing of the Change of Control under the circumstancesdescribed in Section 1 of this Agreement. 5. Certain Definitions. For purposes of this Agreement the following terms shall have the following meanings: (a) “Cause” means the good faith determination by the Company that: (i) Employee has neglected, failed or refused to perform Employee’s duties (other than as a result of physical or mental illness); (ii) Employee has failed to timely attain the goals assigned to Employee by the Company, in its good faith judgment, from time totime; (iii) Employee has committed an act of personal dishonesty including, without limitation, an act or omission intended to result inpersonal enrichment of Employee at the expense of the Company; (iv) Employee has committed a willful or intentional act that could reasonably be expected to injure the reputation, business, orbusiness relationships of the Company or Employee’s reputation or business relationships; 2 (v) Employee has perpetrated an intentional fraud against or affecting the Company or any customer, supplier, client, agent, oremployee thereof; (vi) Employee has been convicted (including conviction on a nolo contendere, no contest, or similar plea) of a felony or any crimeinvolving fraud, dishonesty, or moral turpitude; or (vii) Employee materially breaches Employee’s obligations under Section 8 of this Agreement. With respect to any of the matters set forth in (i) or (ii) above, the Company shall give Employee notice of the deficiency and a reasonable opportunity tocorrect the deficiency (not to exceed sixty (60) days) prior to termination. In the event that the Company has given notice of a deficiency and makes adetermination that the deficiency has not been cured within a reasonable period of time, Employee’s employment may be terminated for Cause. (b) “Change of Control” means: (i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities ExchangeAct of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)of 50% or more of either (A) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) thecombined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “OutstandingCompany Voting Securities”); provided, however, that, for purposes of this Section 5(b)(i), the following acquisitions shall not constitute a Change ofControl: (x) any acquisition directly from the Company, (y) any acquisition by the Company, or (z) any acquisition by any employee benefit plan (or relatedtrust) sponsored or maintained by the Company or any Affiliate; or (ii) Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involvingthe Company or the acquisition of assets or stock of another entity by the Company (each, a “Business Combination”), in each case unless, following suchBusiness Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stockand the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% ofthe then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election ofdirectors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that, as a result ofsuch transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantiallythe same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the OutstandingCompany Voting Securities, as the case may be, and (B) no Person (excluding any corporation resulting from such Business Combination or any employeebenefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 50%or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business 3 Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed priorto the Business Combination; or (iii) Individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Incumbent Board”) cease for anyreason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election,or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Boardshall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initialassumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatenedsolicitation of proxies or consents by or on behalf of a Person other than the Board; or (iv) A sale or disposition of all or substantially all of the operating assets of the Company to an unrelated party; or (v) Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. (c) “Good Reason” means a material negative change in the service relationship as determined in good faith by Employee of the occurrence ofany of the following conditions, without Employee’s express written consent (i) a material dimunition in Employee’s base compensation; (ii) a materialdimunition in Employee’s authority, duties, or responsibilities; (iii) a material change of more than 50 miles in the geographic location at which Employee isrequired to perform the services;(iv) any direction or requirement that Employee engage in conduct that could reasonably be construed to violate local, state orfederal law; or (v) a material failure by the Company to pay Employee’s annual base salary due Employee in a timely manner. With respect to any of thematters set forth above, Employee shall provide written notice to the Company within ninety (90) days of the initial existence of the Good Reason condition. Upon receipt of such notice, the Company shall have a period of thirty (30) days during which it may remedy the condition and not be required to pay theSeverance Pay in connection with a resignation with Good Reason. 6. Section 409A; Deferred Compensation. (a) Delay in Payment. Notwithstanding anything in this Agreement to the contrary, if Employee is deemed by the Company (or itssuccessor) at the time of Employee’s termination of employment to be a “specified employee,” then any of the Severance Pay that is non-exempt deferredcompensation which would otherwise be payable hereunder shall not be paid until the date which is the first business day following the six-month period afterEmployee’s separation from service (or if earlier, Employee’s death). Such delay in payment shall only be effected to the extent required to avoid adverse taxtreatment to Employee under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). Any payment not subject to such delay,shall be paid pursuant to the time and form of payment specified above. Any compensation which would have otherwise been paid during the delay periodshall be paid to 4 Employee (or Employee’s beneficiary or estate) in a lump sum payment on the first business day following the expiration of the delay period. (b) Key Definitions. For purposes of the Agreement, the term “termination of employment” shall mean “separation from service” as definedin Section 409A. (c) Interpretation. The parties intend that all payments payable under this Agreement will not be subject to the additional tax imposed bySection 409A, and the provisions of this Agreement shall be construed and administered consistent with such intent. To the extent such potential paymentscould become subject to Section 409A, the Company (or its successor) and Employee agree to work together to modify the Agreement to the minimum extentnecessary to reasonably comply with the requirements of Section 409A, provided that the Company (or its successor) shall not be required to pay Employee’staxes or additional compensation and Employee shall be responsible for payment of any and all taxes owed in connection with any payment payable under thisAgreement. 7. Protection of Confidential Information and Trade Secrets. (a) Confidential Information and Trade Secrets. Employee acknowledges that he has received and will continue to receive access to non-public, confidential and proprietary business information and trade secrets about the Company and its Affiliates (“Confidential Information”), that thisConfidential Information was and will be obtained or developed by the Company at great expense and is zealously guarded by the Company fromunauthorized disclosure, and that Employee’s possession of this Confidential Information is due solely to Employee’s employment with the Company. Inrecognition of the foregoing, Employee will not at any time during employment or following termination of employment for any reason, disclose, use or makeotherwise available to any third party any Confidential Information relating to the Company’s or any of its Affiliates’ business, including their products,production methods and development; manufacturing and business methods and techniques; trade secrets, data, specifications, developments, inventions,engineering and research activity; marketing and sales strategies, information and techniques; long and short term plans; current and prospective dealer,customer, vendor, supplier and distributor lists, contacts and information; financial, personnel and information system information; and any otherinformation concerning the business of the Company or its Affiliates. During the term of Employee’s employment with the Company and at all timesthereafter, Employee shall take reasonable steps to protect the confidentiality of Confidential Information and shall refrain from any acts or omissions thatwould reduce the value of Confidential Information to the Company or any of its Affiliates. Employee’s foregoing obligations regarding ConfidentialInformation do not apply to any knowledge or information to the extent that it (i) is now or subsequently becomes generally publicly known or generallyknown in the industry in which the Company operates in the form in which it was obtained from the Company (or its applicable Affiliate), (ii) isindependently made available to Employee in good faith by a third party who has not violated an obligation of confidentiality to the Company or any of itsAffiliates, or (iii) is required by law to be disclosed (but only to the extent such disclosure is required). In the latter event, Employee shall disclose to theCompany the event and authority requiring disclosure “required by law” at the first opportunity upon learning of the disclosure request. Nothing contained inthe preceding sentence shall be interpreted to legitimize any disclosure of Confidential Information by Employee that occurs outside of any of the eventsdescribed in items (i) through (iii) above. The parties acknowledge and agree that Employee’s 5 obligations under this Section 7 to maintain the confidentiality of the Confidential Information are in addition to any obligations of Employee under applicablestatutory or common law. (b) Return of Confidential Information and Trade Secrets. Upon termination of employment with the Company, Employee shall deliverto a designated Company representative all records, documents, hardware, software, and all other property of the Company or any of its Affiliates in whateverform and all copies thereof in Employee’s possession. Employee acknowledges and agrees that all such materials are the sole property of the Company or itsAffiliates and that Employee will certify in writing to the Company at the time of termination that Employee has complied with this obligation. (c) Definition of Affiliate. For purposes of this Section 7 and this entire Agreement, Affiliate” means an individual, a partnership, acorporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, or an unincorporated organization, that directly, orindirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company. (d) Acknowledgements. Employee acknowledges that Confidential Information constitutes a unique and valuable asset of the Company andits Affiliates and represents a substantial investment of time and expense by the Company and its Affiliates. Employee acknowledges that he holds amanagement position with the Company, that he is employed in a decision-making capacity and exercises direction, control and supervision over a materialpart of the Company’s business. Employee further acknowledges that the provisions of this Section 7 are reasonable and necessary to protect the legitimateinterests of the Company and its Affiliates, and that any violation of this Section 7 by Employee would cause substantial and irreparable harm to theCompany and its Affiliates to such an extent that monetary damages alone would be an inadequate remedy. Therefore, in the event that Employee violates anyprovision of this Section 7, the Company and its Affiliates shall be entitled to immediate injunctive relief (without the necessity of proving actual damages orposting bond, or if a bond is required, a bond in the amount of $1,000 is deemed sufficient), in addition to all the other remedies it or they may have,restraining Employee from violating or continuing to violate such provision. 8. Non-Solicitation. (a) Restrictions. (i) Employee specifically acknowledges that the Confidential Information described in Section 7(a) includes confidential and tradesecret data pertaining to current and prospective customers of the Company, that such data is a valuable and unique asset of the Company’s business and thatthe success or failure of the Company’s specialized business is dependent in large part upon the Company’s ability to establish and maintain close andcontinuing personal contacts and working relationships with such customers and to develop proposals which are specifically designed to meet therequirements of such customers. Therefore, during Employee’s employment with the Company and for the twelve (12) months following termination ofemployment for any reason, except on behalf of the Company or with the Company’s prior written consent, Employee is prohibited from soliciting, eitherdirectly or indirectly, on his own behalf or on behalf of any other person or entity, all such customers with 6 whom Employee had contact during the twenty-four (24) months preceding Employee’s termination of employment. (ii) Employee specifically acknowledges that the Confidential Information described in Section 7(a) also includes confidential andtrade secret data pertaining to current and prospective employees and agents of the Company, and Employee further agrees that during Employee’s employmentwith the Company and for the twelve (12) months following termination of employment for any reason, Employee will not directly or indirectly solicit, on hisown behalf or on behalf of any other person or entity, the services of any person who is an employee or agent of the Company or solicit any of the Company’semployees or agents to terminate their employment or agency with the Company. (iii) Employee further agrees that, during Employee’s employment with the Company and for the twelve (12) months followingtermination of employment for any reason, Employee will do nothing to interfere with any of the Company’s business relationships. (b) Acknowledgements. Employee acknowledges that the provisions of this Section 8 are reasonable and necessary to protect the legitimateinterests of the Company and its Affiliates, including without limitation trade secrets, customer and supplier relationships, goodwill and loyalty, and that anyviolation of this Section 8 by Employee would cause substantial and irreparable harm to the Company and its Affiliates to such an extent that monetarydamages alone would be an inadequate remedy. Therefore, in the event that Employee violates any provision of this Section 8, the Company and its Affiliatesshall be entitled to immediate injunctive relief (without the necessity of proving actual damages or posting bond, or if a bond is required, a bond in the amountof $1,000 is deemed sufficient), in addition to all the other remedies it or they may have, restraining Employee from violating or continuing to violate suchprovision. (c) Modification. If the duration of, the scope of or any business activity covered by any provision of this Section 8 is in excess of what isvalid and enforceable under applicable law, such provision shall be construed to cover only that duration, scope or activity that is valid and enforceable. Employee and the Company agree that this Section 8 shall be given the construction which renders its provisions valid and enforceable to the maximum extent,not exceeding its express terms, possible under applicable law. 9. Parachute Payment Restrictions. (a) Restrictions. If any payments or benefits (including payments and benefits pursuant to this Agreement or under other compensatoryarrangements involving the Employee, including equity-based incentive awards (the “other arrangements”)) in the nature of compensation that the Employeewould receive in connection with a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of theCompany (collectively, “Transaction Payments”) would collectively constitute a “parachute payment” within the meaning of Section 280G of the Code, and ifthe “net after-tax amount” of such parachute payment to the Employee is less than what the net after-tax amount to the Employee would be if the TransactionPayments otherwise constituting the parachute payment were limited to the maximum “parachute value” of Transaction Payments that the Employee couldreceive without giving rise to any liability for any excise tax imposed by Section 4999 of 7 the Code (the “Excise Tax”), then the Transaction Payments otherwise constituting the parachute payment shall be reduced so that the parachute value of allTransaction Payments, in the aggregate, will equal the maximum parachute value of all Transaction Payments that the Employee can receive without anyTransaction Payments being subject to the Excise Tax. Should such a reduction in Transaction Payments be required, the Employee shall be entitled, subjectto the following sentence, to designate those Transaction Payments under this Agreement or the other arrangements that will be reduced or eliminated so as toachieve the specified reduction in Transaction Payments to the Employee and avoid characterization of such Transaction Payments as a parachute payment. The Company will provide the Employee with all information reasonably requested by the Employee to permit the Employee to make such designation. Tothe extent that the Employee’s ability to make such a designation would cause any of the Transaction Payments to become subject to any additional tax underCode Section 409A, or if the Employee fails to make such a designation within ten business days of receiving the requested information from the Company,then the Company shall achieve the necessary reduction in the Transaction Payments by reducing them in the following order: (i) reduction of cash paymentspayable under this Agreement; (ii) reduction of other payments and benefits to be provided to the Employee; (iii) cancellation or reduction of accelerated vestingof equity-based awards that are subject to performance-based vesting conditions; and (iv) cancellation or reduction of accelerated vesting of equity-basedawards that are subject only to service-based vesting conditions. If the acceleration of the vesting of Employee’s equity-based awards is to be cancelled orreduced, such acceleration of vesting shall be reduced or cancelled in the reverse order of the date of grant. For purposes of this Section 9, a “net after-taxamount” shall be determined by taking into account all applicable income, excise and employment taxes, whether imposed at the federal, state or local level,including the Excise Tax, and the “parachute value” of a Transaction Payment means the present value as of the date of the Change of Control for purposes ofSection 280G of the Code of the portion of such Transaction Payment that constitutes a parachute payment under Section 280G(b)(2) of the Code. (b) Use of Independent Accounting Firm. The independent registered public accounting firm engaged by the Company for general auditpurposes as of the day prior to the effective date of the Change of Control may be utilized by the Compensation Committee to make all determinations requiredto be made under this Section 9. If the independent registered public accounting firm so engaged by the Company is serving as accountant or auditor for theindividual, entity or group effecting the Change of Control, the Compensation Committee may appoint another nationally recognized independent registeredpublic accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by any suchindependent registered public accounting firm retained hereunder. Any good faith determinations of the accounting firm made hereunder shall be final, bindingand conclusive upon the Company and Employee. 10. At-Will Employment. This Agreement does not modify Employee’s status as an employee-at-will. The parties acknowledge thatEmployee is an employee-at-will and that Employee’s services may be terminated by the Company at any time with or without Cause. 11. Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof, nor toaffect the meaning thereof. 8 12. Governing Law; Jurisdiction. This Agreement shall be governed by and construed under Colorado law, without regard to its conflictof laws principles. The parties agree that any litigation in any way relating to this Agreement shall be venued in either federal or state court in Jefferson County,Colorado, and Employee hereby consents to the personal jurisdiction of these courts and waives any objection that such venue is inconvenient or improper. 13. Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW, EMPLOYEE AND COMPANY HEREBYIRREVOCABLY AND EXPRESSLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, ORENFORCEMENT THEREOF. 14. Employee’s Right to Recover Attorneys’ Fees and Costs. In the event of any litigation concerning any controversy, claim or disputebetween the parties hereto, arising out of or relating to this Agreement, the breach hereof or the interpretation hereof, Employee will be entitled to recover from theCompany Employee’s reasonable expenses, attorneys’ fees, and costs incurred therein or in the enforcement or collection of any judgment or award renderedtherein if (and only if) Employee is the prevailing party. The “prevailing party” means the party determined by the court to have most nearly prevailed, even ifsuch party did not prevail in all matters, not necessarily the party in whose favor a judgment is rendered. 15. Complete Agreement; Amendments. The foregoing is the entire agreement of the parties with respect to the subject matter hereof,excepting those documents identified herein to be signed by the Employee and the Company, and may not be amended, supplemented, canceled or dischargedexcept by written instrument executed by both parties hereto. This Agreement supersedes any and all prior agreements among the Company and Employee withrespect to the matters covered herein. 16. Invalidity. The invalidity or lack of enforceability of any particular provision in this Agreement shall not affect the other provisionshereof, and this Agreement shall be construed in all other respects as though such invalid or unenforceable provisions were permitted. Moreover, the partiesagree to replace or have a Court replace such invalid provisions with a substitute provision that will satisfy the intent of the parties. 17. Survival. Upon the expiration or termination of this Agreement for any reason, the provisions of this Section and the covenants of theparties herein shall survive and remain in full force and effect. 18. Binding Obligations. The Employee and the Company acknowledge and understand that, unless expressly stated above, Employee’sobligations hereunder shall not be affected by the reasons for, circumstances of, or identity of the party who initiates the termination of Employee’semployment with the Company. 9 IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below to be effective as of the Effective Date. GENERAL MOLY, INC.The Company By:/s/ David A Chaput Date:12/21/2011 EMPLOYEE — Robert Scott Roswell By:/s/ R. Scott Roswell Date:12/29/2011 10EXHIBIT 21.1 SUBSIDIARIES OF GENERAL MOLY, INC. Net Smelter, Inc., a Delaware corporation Moly Royalty, Inc., a Delaware corporation Copper Royalty, Inc., a Delaware corporation Eureka Moly, LLC, a Delaware limited liability company Nevada Moly, LLC, a Delaware limited liability company Kobeh Valley Ranch, LLC, a Nevada limited liability company Liberty Moly, LLC, a Delaware limited liability company Exhibit 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 Nos. 333-139615, 333-139961, 33-149208, and 333-166999and Registration Statement on Form S-3 No. 333-170389 of General Moly, Inc. of our report dated March 1, 2012 relating to the consolidated financialstatements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K. PricewaterhouseCoopers LLPDenver, ColoradoMarch 1, 2012 EXHIBIT 31.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Bruce D. Hansen, certify that: 1. I have reviewed this Annual Report on Form 10-K of General Moly, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary tomake the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (asdefined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a—15(f) and 15d—15(f)) for the registrant and have: a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designedunder our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles; c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’smost recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financialreporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting whichare reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting. Dated: March 1, 2012 By:/s/ Bruce D. HansenName:Bruce D. HansenTitle:Chief Executive Officer EXHIBIT 31.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, David A. Chaput, certify that: 1. I have reviewed this Annual Report on Form 10-K of General Moly, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary tomake the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (asdefined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a—15(f) and 15d—15(f)) for the registrant and have: a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designedunder our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles; c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’smost recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financialreporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting whichare reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting. Dated: March 1, 2012 By:/s/ David A. ChaputName:David A. ChaputTitle:Chief Financial Officer EXHIBIT 32.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 1350,AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Bruce D. Hansen, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that theAnnual Report on Form 10-K of General Moly, Inc. for the year ended December 31, 2011 fully complies with the requirements of Section 13(a) or 15(d) of theSecurities Exchange Act of 1934 and that information contained in such Annual Report on Form 10-K fairly presents in all material respects the financialcondition and results of operations of General Moly, Inc. Dated: March 1, 2012 By:/s/ Bruce D. HansenName:Bruce D. HansenTitle:Chief Executive Officer(Principal Executive Officer) EXHIBIT 32.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 1350,AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, David A. Chaput, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that theAnnual Report on Form 10-K of General Moly, Inc. for the year ended December 31, 2011 fully complies with the requirements of Section 13(a) or 15(d) of theSecurities Exchange Act of 1934 and that information contained in such Annual Report on Form 10-K fairly presents in all material respects the financialcondition and results of operations of General Moly, Inc. Dated: March 1, 2012 By:/s/ David A. ChaputName:David A. ChaputTitle:Chief Financial Officer 

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