General Moly, Inc.
Annual Report 2013

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, 2013 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 MKT 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. o 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, 2013, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $73,525,424 based on theclosing price as reported on the NYSE MKT. As of March 6, 2014, 91,864,896 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, 2013 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 PROPERTIES1 ITEM 1A.RISK FACTORS20 ITEM 1B.UNRESOLVED STAFF COMMENTS28 ITEM 3.LEGAL PROCEEDINGS28 ITEM 4.MINE SAFETY DISCLOSURES29 Part II ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUERPURCHASES OF EQUITY SECURITIES29 ITEM 6.SELECTED FINANCIAL DATA30 ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS31 ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK41 ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA43 ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURE67 ITEM 9A.CONTROLS AND PROCEDURES67 ITEM 9B.OTHER INFORMATION67 Part III ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE67 ITEM 11.EXECUTIVE COMPENSATION68 ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATEDSTOCKHOLDER MATTERS68 ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE68 ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES68 Part IV ITEM 15.EXHIBITS, FINANCIAL STATEMENT SCHEDULES68 SIGNATURES73 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,” and the “Company” refer to General Moly, Inc. and its consolidatedsubsidiary 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 contains proven and probable molybdenum reserves totaling 1.4 billion pounds (1.1 billion pounds owned by us) of which 1.2 billionpounds (1.0 billion pounds owned by us) are estimated to be recoverable. We received final federal and state of Nevada regulatory approvals inNovember 2012 and are in the process of obtaining project financing for the Mt. Hope Project. In 2006, we acquired a second significant molybdenum andcopper project, the Liberty Property (“Liberty Property”), located in Nye County, Nevada, which we wholly own. The Liberty Property is anticipated tobecome our second molybdenum and copper operation, after commencement of commercial production at the Mt. Hope Project, with initial productiondependent on market conditions. Mt. Hope Project In August, 2007, we completed a Bankable Feasibility Study (“Bankable Feasibility Study” or “BFS”) that provided data on the viability, expectedeconomics, and production and cost estimates of the project. Since publication of the BFS, we have revised several estimates, based primarily on engineeringprogress, which is approximately 65% complete at December 31, 2013. Our current estimates for the Mt. Hope Project capital cost requirements are referred toas the “Project Capital Estimate” and our current estimates for the Mt. Hope Project operating costs are referred to as the “Project Operating Cost Estimate”. OnJanuary 16, 2014, we filed a technical report (the “January 2014 Technical Report”) prepared in accordance with National Instrument 43-101 Standards ofDisclosure for Mineral Projects of the Canadian Securities Administration (“NI 43-101”) for the Mt. Hope Project. The NI 43-101 is a codified set of rules andguidelines for reporting and displaying information related to mineral properties owned by, or explored by, companies which report these results on stockexchanges within Canada. The completed report estimates molybdenum reserves and resources, production, capital and operating cost parameters, along withproject economics, as discussed in “— Reserves and Mineralized Material” below. Project Ownership 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 Eureka Moly, LLC (“the LLC”), and in February 2008entered into an agreement (“LLC Agreement”) for the development and operation of the Mt. Hope Project with POS-Minerals Corporation (“POS-Minerals”). Under the LLC Agreement, POS-Minerals owns a 20% interest in the LLC and General Moly, through Nevada Moly, LLC (“Nevada Moly”), a wholly-ownedsubsidiary, owns an 80% interest. The ownership interests and/or required capital 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 capital contributions to the LLC totaling $100.0 million duringthe year ended December 31, 2008 (“Initial Contributions”). Additional amounts of $100.7 million were received from POS-Minerals in December 2012,following receipt of major operating permits for the Mt. Hope Project, including the Record of Decision (“ROD”) from the U.S. Bureau of Land Management(“BLM”). In addition, as commercial production at the Mt. Hope Project was not achieved by December 31, 2011, the LLC will be required to return to POS-Minerals $36.0 million of its capital contributions, with no corresponding reduction in POS-Minerals’ ownership percentage. This return of contributionspayment is contingent upon the commencement of commercial production, as defined in the LLC Agreement, and will be due 20 days thereafter. Based on ourcurrent plan, subject to availability of full financing for construction of the Mt. Hope Project, we anticipate commercial production will be achieved following a20 — 24 month construction period. Nevada Moly is obligated under the terms of the LLC Agreement to make capital contributions to the LLC to fund thereturn of contributions to POS-Minerals upon achievement of commercial production (i.e. when the contingency is resolved). If Nevada Moly does not fundtheir additional capital contribution in order for the LLC to return to POS-Minerals $36 million of its total capital contributions, POS-Minerals has an electionto either make a secured loan to the LLC to fund the return of contributions, or receive an additional interest in the LLC of approximately 5%. In the lattercase, Nevada Moly’s interest in the LLC is subject to dilution by a percentage equal to the ratio of 1.5 times the amount of the unpaid return of contributionsover the aggregate amount of deemed capital contributions (as determined under the LLC Agreement) of both parties to the LLC (“Dilution Formula”). AtDecember 31, 2013, the aggregate amount of deemed capital contributions of both parties was $1,063.5 million. 1Table of Contents 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 the development andoperation of the Mt. Hope Project as contemplated by the parties for a period of twelve consecutive months. If POS-Minerals puts its interest, Nevada Moly orits transferee or surviving entity would be required to purchase the interest for 120% of POS-Minerals’ total contributions to the LLC, which, if not paidtimely, would be subject to 10% interest per annum. Beginning in November 2012, the Company and POS-Minerals had begun making monthly pro rata capital contributions to the LLC to fund costsincurred as required by the LLC Agreement. The interest of a party in the LLC that does not make its monthly pro rata capital contributions to fund costsincurred is subject to dilution based on the Dilution Formula. The Company and POS-Minerals consented, effective July 1, 2013, to Nevada Moly acceptingfinancial responsibility for POS-Minerals’ 20% interest in costs related to Nevada Moly’s compensation and reimbursement as Manager of the LLC, andcertain owners’ costs associated with Nevada Moly’s ongoing progress to complete project financing for its 80% interest, resulting in approximately $3.0million to be paid by Nevada Moly on behalf of POS-Minerals during the term of the consensual agreement, which will be in place until the earlier ofcompletion of Nevada Moly’s financing efforts or June 30, 2014. POS-Minerals remains obligated to contribute its 20% interest in all other costs incurred bythe LLC. Other than those costs noted, through December 31, 2013 and to date through 2014, all required monthly contributions have been made by bothparties. Permitting Completion and Project Restart On November 16, 2012, the BLM issued its ROD authorizing development of the Mt. Hope Project. The ROD approves the Plan of Operations(“PoO”) for construction and operation of the mining and processing facilities and also grants the Rights-of-Way for a 230kV power transmission line,discussed below. Monitoring and mitigation measures identified in the ROD, developed in collaboration with the regulatory agencies involved throughout thepermitting process, will avoid, minimize, and mitigate environmental impacts, and reflect the Company’s commitment to operate the Mt. Hope Project to thehighest environmental standards. On February 15, 2013, Great Basin Resource Watch and the Western Shoshone Defense Project (“Plaintiffs”) filed a Complaint against the U.S.Department of the Interior and the BLM in the U.S. District Court, District of Nevada, seeking relief under the National Environmental Policy Act (“NEPA”)and other federal laws challenging the BLM’s issuance of the ROD for the Mt. Hope Project, and on February 20, 2013 filed a Motion for PreliminaryInjunction. The Court allowed the LLC to intervene in the matter. On August 22, 2013, the Court denied, without prejudice, the Motion for Preliminary Injunction based on the parties’ Joint Stipulation to ContinuePreliminary Injunction Oral Argument, which advised the Court that as a result of current economic conditions, including the Company’s ongoing financingefforts, all major ground disturbing activities had ceased at the Mt. Hope Project. The Court’s “without prejudice” ruling means that upon the Company’sdecision to recommence significant ground-disturbing activities which were approved by the ROD, sixty days advance notice will be provided to Plaintiffs, orif Plaintiffs believe the scope of minor ongoing approved site activities exceeds the stipulated agreement, then Plaintiffs may elect to re-file their Motion forPreliminary Injunction at that time. The parties and the Court have agreed to address the Plaintiffs’ claims under the pending Complaint based on theadministrative record and the parties’ motion for summary judgment briefing on the merits. Briefing by the parties and probable oral argument is anticipatedto be completed in the second quarter of 2014. The Mt. Hope Project underwent exhaustive environmental analysis and review that lasted more than 6 years. The process to complete theEnvironmental Impact Statement (“EIS”) included extensive public and cooperating agency input (including the BLM, the National Park Service, the U.S.Environmental Protection Agency, the Nevada Division of Wildlife and the County of Eureka). The Company supports the work completed by the BLM andbelieves that the ROD complies with all federal statutes and rules, and is very robust and defensible. The State of Nevada Division of Environmental Protection (“NDEP”) issued a Reclamation Permit for the Mt. Hope Project on November 19, 2012,which authorizes surface disturbance and construction of facilities. The Reclamation Permit also approves the Phase 1 reclamation cost estimate ofapproximately $73.4 million to begin construction in 2013 and established bonding requirements based on this estimate. On December 18, 2012, BLMaccepted the LLC’s reclamation surety bonding in satisfaction of financial guarantee requirements under the ROD for the Mt. Hope Project. The surety bondprogram has been funded with an initial cash payment of $5.6 million and requires additional cash funding of $11.6 million through the constructionprocess for a total of $17.2 million, which is in alignment with the net cash bonding cost included in the December 2013 Project Capital Estimate (the “ProjectCapital Estimate”). This total, comprised of the $17.2 million in cash and the remainder in surety bonding, covers the initial surface disturbance andfacilities anticipated to be in place in the first three years following construction of the Mt. Hope Project, which are subject to ongoing evaluation thereafter.With the surety program in place and the initial contribution funded, the BLM has authorized that surface disturbance in conformity with the ROD mayproceed. 2Table of Contents On May 29, 2012, NDEP issued a Class II Air Quality Operating Permit for the Mt. Hope Project. This permit establishes operating restrictionsand monitoring requirements associated with specific air emission points. On November 26, 2012, NDEP issued a Water Pollution Control Permit (“WPC”) for the Mt. Hope Project. The WPC also approves the operationaland closure plans for the Mt. Hope Project, and establishes monitoring requirements. The LLC initiated cultural clearance activities at the Mt. Hope Project in early December 2012 upon receipt of an Archaeological Resource ProtectionAct Permit issued by the State Archeologist at the Nevada State Office of the BLM. Cultural clearance is an important component of the LLC’s commitment toenvironmental protection and will be completed before major earthworks are done in any of the construction areas. The LLC has cleared priority areas forinitial construction and will continue mitigation throughout the disturbance footprint. Use of this phased approach is intended to allow the LLC to maintainuninterrupted construction progress. On January 2, 2013, the Public Utilities Commission of Nevada (“PUCN”) issued the LLC a permit to construct a 230kV power line thatinterconnects with Nevada Energy’s transmission system at the existing Machacek Substation located near the town of Eureka, Nevada and extend itapproximately 25 miles to the planned Mt. Hope Substation. In addition, the BLM approved the LLC’s surety bonds for reclamation of disturbanceassociated with construction of the 230kV power transmission line. The PUCN permit and approved bond allows the LLC to build the transmissioninfrastructure in a timely manner and provide the necessary capacity to power construction activities and Mt. Hope Project operations. Construction of thetransmission line will also include upgrades to the existing Machacek Substation near Eureka that will improve the reliability of electrical power to thecommunity. At full production the Mt. Hope Project will have a total electrical demand load of approximately 75 megawatts. Transmission capacity wassecured in 2008 and the LLC will negotiate for generating capacity prior to Mt. Hope Project commissioning activities, which will be available once the powerline is constructed and energized. On January 17, 2013, the Federal Energy Regulatory Commission approved an Engineering, Procurement and Construction Agreement contractbetween Nevada Energy and Mt. Wheeler Power. In turn, in early January 2013, the LLC put in place a contract with Mt. Wheeler Power to provide theinterconnect facilities to the Mt. Hope Project. The contract scope is to design and install the interconnect facility at the Machacek Substation, near the town ofEureka, to connect the LLC’s future 230kV power line to the utility. The LLC initiated preliminary construction activities in early January 2013 including early wellfield development and clearing and grubbing ofterrain. Completion of the wellfield and water distribution systems are key items to begin major construction activities. Preliminary work also includedclearing the open pit minesite, millsite, tailings dam and administrative office areas. Further activities have been suspended as a result of the delay infinancing for the Mt. Hope Project and will resume as financing becomes available. Capital & Operating Cost Estimates The development of the Mt. Hope Project has a Project Capital Estimate of $1,312 million, which includes development costs of approximately$1,245 million and $67 million in cash financial guaranty/bonding requirements, advance royalty payments, and power pre-payment estimates. Thesecapital costs were updated in the third quarter of 2012, and were then escalated by approximately 3% in the third quarter of 2013, for those items not yetprocured or committed to by contract. The Mt. Hope Project has not materially changed in scope and is currently designed at approximately 65% engineeringcompletion, with solid scope definition. The pricing remains subject to escalation associated with equipment, construction labor and commodity priceincreases, and project delays, which will continue to be reviewed periodically. The Project Capital Estimate does not include financing costs or amountsnecessary to fund operating working capital and potential capital overruns, is subject to additional holding costs as the Company experiences delays inachieving its portion of financing for the Mt. Hope Project, and may be subject to other escalation and de-escalation as contracts and purchase arrangementsare finalized at then current pricing. From October 2007 through the year ended December 31, 2013, the LLC spent approximately $263.4 million of theestimated $1,312 million on development of the Mt. Hope Project. The LLC’s Project Operating Cost Estimate forecasts molybdenum production of approximately 40 million pounds per year for the first five years ofoperations at estimated average direct operating costs of $6.28 per pound based on $90 per barrel oil equivalent energy prices. The Costs Applicable to Sales(“CAS”) per pound, including anticipated royalties calculated at a market price of $15 per pound molybdenum, are anticipated to average $7.00 per pound. For a reconciliation of direct operating costs, a non-GAAP measure, to CAS, see “—Description of the Mt. Hope Project—Reserves and MineralizedMaterial—Production and Operating Cost Estimates” below. These cost estimates are based on 2013 constant dollars and are subject to cost inflation ordeflation. 3Table of Contents Equipment and Supply Procurement Through December 31, 2013, the LLC has made deposits and/or final payments of $74.1 million on equipment orders, has spent approximately$177.3 million for the development of the Mt. Hope Project and has paid $12.0 million into an escrow arrangement for electricity transmission services, for atotal Mt. Hope Project inception-to-date spend of $263.4 million. In late 2012 and early 2013, the LLC made additional commitments for wellfield materials and equipment, and placed purchase orders for long-leadprocess equipment including the commitments for the engineering portion of flotation cells and roaster equipment. Based on such commitments atDecember 31, 2013, we expect to make additional payments of approximately $2.6 million in 2014 and $12.8 million in 2015. Based on our current cash onhand and our ongoing cash conservation plan, the Company expects it will have adequate liquidity through the end of 2014. However, additional financingwill be required to meet commitments and operating costs in 2015. In 2012, the LLC issued a firm purchase order for eighteen haul trucks. The order provides for delivery of those haul trucks required to performinitial mine development, which will begin several months prior to commercial production. Non-refundable down-payments of $1.2 million were made in2012, with pricing subject to escalation as the trucks were not delivered prior to December 31, 2013. During the third quarter of 2013, the LLC renegotiatedthe timelines for truck delivery, accepting a 3% price increase and delaying deliveries into late 2014. The contract is cancellable with no further liability to theLLC. Also in 2012, the LLC issued a firm purchase order for four mine production drills with a non-refundable down-payment of $0.4 million, andpricing was subject to escalation if the drills were not delivered by the end of 2013. In June of 2013, the LLC signed a change order which delayed deliveryinto the second half of 2014 and triggered a $0.2 million price increase. The contract remains cancellable with no further liability to the LLC. On June 30, 2012, the LLC’s contract to purchase two electric shovels expired. On July 11, 2012, we signed a letter of intent with the same vendorproviding for the opportunity to purchase the electric shovels at prices consistent with the expired contract, less a special discount in the amount of $3.4million to provide credit to the LLC for amounts paid as deposits under the expired contract. The letter of intent provides that equipment pricing will remainsubject to inflation indexes and guarantees production slots to ensure that the equipment is available when required by the LLC. In October 2013, the partiesagreed to extend the letter of intent through June 30, 2014. Termination of Agreements with Hanlong (USA) Mining Investment Inc. In March 2010, we signed a series of agreements with Hanlong (USA) Mining Investment, Inc. (“Hanlong”), an affiliate of Sichuan Hanlong Group,a privately held Chinese company. The agreements formed the basis of a $745 million transaction that was intended to provide the Company with adequatecapital to contribute its 80% share of costs to develop the Mt. Hope Project. The agreements included: (a) a Securities Purchase Agreement (the “PurchaseAgreement”) that provided for the sale to Hanlong of shares of our common stock in two tranches that would have aggregated 25% of our outstanding stock ona fully diluted basis for $80 million ($40 million per tranche), conditioned upon us receiving permits for the Mt. Hope Project and Hanlong’s obligation to usecommercially reasonable efforts to procure a $665 million loan from a Prime Chinese Bank (“Term Loan”) for our use in constructing the Mt. Hope Project;(b) a Stockholder Agreement that provided Hanlong representation on our Board of Directors (“Board”) and provided Hanlong representation on the LLCmanagement committee, governed how Hanlong would vote its shares of the Company and limited Hanlong’s ability to purchase or dispose of our securities;(c) a Bridge Loan whereby Hanlong provided $10 million to the Company to preserve liquidity until permits were received and the Term Loan was available;and (d) a long-term molybdenum supply off-take agreement (discussed further in Item 3 below) which required Hanlong to purchase the Company’s entireshare of the Mt. Hope Project’s molybdenum production above that necessary for the Company to meet its pre-existing supply commitments until the expirationof those commitments (collectively, the “Hanlong Transaction”). Pursuant to the Purchase Agreement, on December 20, 2010, we closed on the first trancheand issued 11,843,341 shares of common stock to Hanlong for a purchase price of $40 million, or approximately $3.38 per share. We granted Hanlongregistration rights with respect to those shares. The Company filed a Registration Statement on Form S-3 in December 2013, which, among other transactionsincluded registration of the Hanlong shares, thereby allowing Hanlong to sell their shares to a third party. The registration statement was declared effective onJanuary 29, 2014. After the closing of the first tranche, Hanlong became entitled to nominate one director to serve on our Board and one representative to theLLC management committee. Nelson Chen was designated by Hanlong to serve in both of these capacities. On March 20, 2013, the Company was notified that China Development Bank (“CDB”) had suspended work on the Term Loan. This suspensionrelates to reports that Mr. Liu Han, Chairman of Hanlong had been detained by Chinese authorities. In August 2013, the Company terminated its ongoing relationship with Hanlong. The Purchase Agreement provided that it could be terminated byeither party (providing the terminating party was not in default) if the closing of the second tranche had not 4Table of Contents occurred on or before the earlier of December 31, 2012 or August 16, 2013 (the date which is nine months after the issuance of the ROD). In August 2013, theCompany notified Hanlong that it was terminating the Purchase Agreement as Hanlong had not met its commitments under the agreement. Hanlongacknowledged and consented to the termination. As a result of the termination of the Purchase Agreement, Hanlong was obligated to pay the Company a break fee of $10.0 million because Hanlongfailed to arrange the Term Loan within the above described deadline. The Company and Hanlong have agreed to offset the break fee against the repayment ofthe Bridge Loan. The outstanding balance of the Bridge Loan and related accrued interest were recorded on the income statement as constructive receipt ofbreak fee for $10.0 million and forgiveness of debt of bridge loan interest for $0.8 million as of September 30, 2013, and upon the termination of the PurchaseAgreement. In connection with the termination of the Hanlong relationship, most of the provisions of the Stockholder Agreement were also terminated. Under thecontinuing provisions of the Stockholder Agreement, Hanlong’s right to designate one nominee to the Board continues until such time that Hanlong’sownership percentage falls below 10%. Currently, Hanlong owns approximately 13.0% of our outstanding common stock on a fully diluted basis. In June,2013, the Board recommended the election of Mr. Chen as a Class III member, in the Board’s slate of nominees submitted to our stockholders, pursuant to theStockholder Agreement. He was elected by a vote of the stockholders at the Company’s 2013 Annual Meeting of Stockholders for a three-year term. InAugust 2013, Mr. Chen stepped down from the LLC management committee. On October 26, 2012, we entered into an agreement with Hanlong pursuant to which Hanlong would provide us with a Subordinated Debt Facility(“Sub Debt Facility”) of up to $125.0 million to assist the Company in financing capital cost increases. Simultaneously with the execution of the Sub DebtFacility, the Company issued a warrant to Hanlong with a 2.5-year maturity to purchase ten million shares of the Company’s common stock. On May 14, 2013, the Company and Hanlong mutually agreed to terminate the Sub Debt Facility and warrant to provide the Company with greaterflexibility in securing an additional strategic partner. As the warrant was fully vested and exercisable at the time of termination, this resulted in an $11.5million non-cash charge to the income statement for the remaining unamortized value associated with the issuance of the warrant as of June 30, 2013. 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 have 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 updatedNI 43-101 compliant resource estimate and on November 15, 2011, released an updated pre-feasibility study detailing updated resource estimates and projecteconomics. The NI 43-101 is a codified set of rules and guidelines for reporting and displaying information related to mineral properties owned by, or exploredby, companies which report these results on stock exchanges within Canada. The completed report estimates molybdenum and copper reserves and resources,production, capital and operating cost parameters, along with project economics. We advanced metallurgical and environmental work in 2013, with dedicatedinternal resources and $0.2 million in external costs, and will continue to examine project development options and feasibility. 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, and (c) 34 unpatented mining claims in Marion County, Oregon, known as the Detroit property. Our efforts at these properties areminimal and consume no significant financial resources. The 5Table of Contents Company has retained production royalties of 1.5% of all net smelter returns on future production from two undeveloped properties in Skamania County,Washington and Josephine County, Oregon, which were sold in 2012 and 2013, respectively. 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, Inc. being thesurviving entity. In connection with the Reincorporation, all of the outstanding securities of Idaho General Mines, Inc. were converted into securities of GeneralMoly, Inc. on a one-for-one basis. For purposes of the Company’s reporting status with the U.S. Securities and Exchange Commission (“SEC”), GeneralMoly, Inc. is deemed a successor to Idaho General Mines, Inc. Our common stock is traded on the NYSE MKT under the symbol “GMO” and, inFebruary 2008, the Company began trading on the Toronto Stock Exchange (“TSX”) under the same symbol. Our registered and principal executive office islocated 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 1.800.732.0330. 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 financing required to complete the development of the Mt. Hope Project based on our current schedule, while at the same time conserving our cashresources until such financing is received. We believe we have the following business strengths that will enable us to achieve our objectives: · We have 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 development stage, is construction ready and fully permitted, and isanticipated to be one of the largest and lowest cost primary molybdenum projects in the world, driven, in part, by high ore grades that willbe processed early in the mine life. · Our Liberty Property has the potential to become a second, significant, molybdenum and copper operation and is wholly-owned by theCompany and royalty-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 sound design. · We have strong international support from the steel industry as evidenced by the strategic partnerships and off-take agreements we have inplace with several of the world’s largest steel companies. · We anticipate favorable long-term market fundamentals for molybdenum. 6Table of Contents Products We do not currently produce any products. When the Mt. Hope Project is developed, the LLC expects production of 40 million pounds ofmolybdenum per year over the first five years on average and approximately 1.2 billion pounds of molybdenum over the expected 41-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, corrosion resistance and high temperature properties of the alloy. Themajor applications of molybdenum containing plain and low alloy steels are automotive body panels, construction steel and oil and gas pipelines. Whenadded to stainless steels, molybdenum imparts specialized corrosion resistance in severe corrosive environments while improving strength. The majorapplications of stainless steels are in industrial chemical process plants, desalinization plants, nuclear reactor cooling systems and environmental pollutionabatement. When added to super alloy steels, such as those used in jet turbine blades and other advanced aerospace engine components, molybdenumdramatically improves high temperature strength, thermal expansion and contraction resistance and resistance to oxidation. The effects of molybdenumadditions to steels are not readily duplicated by other elements and as such are not significantly impacted by 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 eliminable in times of technical or economic downturns. Competitive Conditions Molybdenum exploration, development and production is a competitive business. We anticipate competing worldwide with numerous molybdenumsuppliers once 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 by CPMGroup to grow to 515 million pounds in 2013 and then to 534 million pounds in 2014. Although many companies produce molybdenum, some of which alsomine other minerals, approximately two-thirds of global production is concentrated among ten companies. When and if we commence production at either or both of our Mt. Hope Project and Liberty Property, our competitive position will be based on thequality and grade of our ore bodies and our ability to manage costs compared with other producers. Our costs are driven by the grade and nature of our orebodies as well as input costs, including energy, labor and equipment. Our ability to have a competitive position over the long-term will be based on, amongother things, favorable logistics and stable geo-political climate, the large size of our combined ore resources and anticipated production rate capacity as well asour intention to hire and retain a skilled workforce, and manage our costs. Employees The Company had a total of 38 employees, including 34 exempt and 4 hourly employees, as of December 31, 2013. Description of the Mt. Hope Project Overview The discussion in this section is based on the entire Mt. Hope Project, of which we own an 80% interest. The LLC is proceeding with thedevelopment of the Mt. Hope Project. The Mt. Hope 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 EIS. We completed an initial PoO, which the BLM accepted inSeptember 2006. In December 2006, the BLM selected an environmental firm to complete 7Table of Contents the EIS for the Mt. Hope Project. The Company worked diligently with the environmental firm to complete the EIS, resulting in the ROD becoming effectiveon November 16, 2012. The Mt. Hope Project — the Mt. Hope Lease The Mt. Hope Project is owned/leased and will be operated by the LLC under the LLC Agreement. The LLC currently has a lease (“Mt. Hope Lease”)with Mount Hope Mines, Inc. (“MHMI”) for the Mt. Hope Project for a period of 30 years from October 19, 2005 and for so long thereafter as operations arebeing 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 curesuch breach. If the LLC terminates the lease, termination is effective 30 days after receipt by MHMI of written notice to terminate the Mt. Hope Lease and nofurther payments would be due to MHMI. If MHMI terminates the lease, termination is effective upon receipt of a notice of termination of a material breach,representation, warranty, covenant or term contained in the Mt. Hope Lease and followed by failure to cure such breach within 90 days of receipt of a notice ofdefault. MHMI may also elect to terminate the Mt. Hope Lease if the LLC has not cured the non-payment of obligations under the lease within 10 days ofreceipt of a notice of default. Located in Eureka County, Nevada, the Mt. Hope Project consists of 13 patented lode claims and one millsite claim, which are owned by MHMI andleased to the LLC, and 1,521 unpatented lode claims, including 109 unpatented lode claims owned by MHMI and leased to the LLC and 1,412 unpatentedlode claims owned by the LLC. Patented claims are owned real property and unpatented claims are held subject to the paramount title of the United States ofAmerica and remain valid for as long as the claim contains a discovery of valuable minerals 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 project financing, MHMI’s consent may not be unreasonably withheld. The Mt. Hope Lease further requires the LLC to keep theproperty free 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 prohibit or interfere with any advance royalty payments due toMHMI under the Mt. Hope Lease; and (iii) no cash sweeps or payments of excess cash flow may be made to the lenders in priority of such advance royaltypayments, as discussed in “ — Royalties, Agreements and Encumbrances” below. 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. 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. 8Table of Contents Royalties, Agreements and Encumbrances Advance Royalty 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, 2013, we have paid $23.1million of the total Construction Royalty Advance. Based on our Mt. Hope Project capital budget we estimate that a final reconciliation payment on the CapitalConstruction Cost Estimate (the “Estimate”) will be due following the commencement of commercial production, after as-built costs are definitivelydetermined. The Company estimates, based on the revised capital estimate discussed above and the current timeline for the commencement of commercialproduction, that an additional $4.2 million will be due approximately 20 — 24 months after the commencement of construction. This amount was accrued asof December 31, 2013. The capital estimates may be subject to escalation in the event the Company experiences continued delays in achieving full financingfor the Mt. Hope Project. The LLC is also obligated to make a minimum annual advance royalty payment (“Annual Advance Royalty”) of $0.5 million each October 19 forany year wherein commercial production has not been achieved or the MHMI Production Royalty (as hereinafter defined) is less than $0.5 million. Ascommercial production is not anticipated to commence until mid-2016, the Company has accrued $1.0 million in Annual Advance Royalty payments whichwill be due in two $0.5 million installments in October 2014 and 2015, respectively. An additional installment of $0.5 million was paid in October 2013. The Estimate and the Annual Advance Royalty are collectively referred to as the “Advance Royalties.” All Advance Royalties are credited against the MHMIProduction Royalties once the mine has achieved commercial production. After the mine begins production, the LLC estimates that the MHMI ProductionRoyalties will be in excess of the Annual Advance Royalties for the life of the Mt. Hope Project and, further, the Estimate will be credited against MHMIProduction Royalties owed at the rate of 50% of MHMI Production Royalties on an annual basis until fully consumed. Assuming a $15 molybdenum price,the Annual Advance Royalties are consumed within the first three years of commercial 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 9Table of Contents other product) sold or deemed to be sold from the Mt. Hope Project; or (ii) 3.5% of net returns (“Base Percentage”), if the average gross value ofproducts 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 ishigher 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 valueof 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 and sold (or deemed to be sold) from the Mt. Hope Project; the term “gross value” refers generally toproceeds received by us or our affiliates for the products sold (or deemed to be sold); and the term “net returns” refers to the gross value of allproducts, 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 85 degrees Fahrenheit and lows in January of about 17 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. 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 mill concentrator consist of bringing power and water to the property, commensurate with the operational requirements, includingdeveloping a water wellfield within the Kobeh Valley, constructing site access roads, constructing maintenance shops for the mine and plant administrativeoffices, constructing a potable water supply system, constructing septic leachfield systems, installing emergency power generators and liquid natural gastanks, and installing facilities for project communications. A 230kV power line is expected to be developed from the Machacek substation near Eureka to theminesite. 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 PermittingRequirements — Water Appropriation Permits—Nevada Division of Water Resources” below for a discussion of the current status of our applications forwater rights for use in the Mt. Hope Project). Surface rights on the Mt. Hope Project include BLM open range grazing rights; stock water rights are located in the vicinity of the Project. Twopower line easements cross within the property boundaries. An existing easement for a 345kV transmission line runs north-south on the western edge of theproperty and the other existing easement is a medium-voltage power line that runs east along the existing main access road that connects to Route 278 to theeastern property boundary. The Company also has a right-of-way from the BLM for a microwave relay that provides network communications and voiceradio capability for the minesite and will provide improved cellular service to the surrounding community. 10Table of Contents 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 and southwest of theMt. Hope Project. Diamond and Pine Valleys are elongated in a north-south direction. Valleys are typically underlain by thick (several thousand feet) of unconsolidated to poorly consolidated alluvium. Mountains are characterized byextensive bedrock exposures. Soils are typically thin and poorly developed. Generally, groundwater in the mountains is hosted in fracture-controlled aquifers, while groundwater in the valleys is in porosity-controlled aquifers. 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, shrubs, and 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 of the Project slope gently to elevations from 6,400 to 7,900 feet. Diamond Valley, situated to the south and east, is approximately 6,000 feetin elevation. These physiographic attributes are typical of other major mines in Nevada. 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 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 drill 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. 11Table of Contents 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 (MoS - molybdenum disulfide). Much of the knownmolybdenite is distributed around two lobes and offshoots of the main quartz porphyry stock and within two separate mineralized zones. A concentration ofhigher-grade mineralization is present between the eastern and western mineral zones. Referred to as the Mt. Hope Fault Zone, this area is approximately1,300 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 bemined and stockpiled during the first 34 years and will be processed in the succeeding 8 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. The drill hole databaseused in the current mineral resource estimate includes 267 holes drilled for a total of 324,634 feet of drilling; 247,893 feet of which is core and RC collar/corefinish, the remaining 76,741 feet is RC. Ore to Be Mined The table below summarizes the ore grades we expect to mill under our January 2014 Technical Report prepared in accordance with NI 43-101guidelines for the Mt. Hope Project. Mill Feed Ore Statistics AverageGradeMoCategoryKtonsMo%Recovery %Ore in Years 1-5122,0000.09289.8Ore in Years 1-10244,0000.08689.5Ore Life of Mine985,0000.07088.8 The modeled pit, including the above mineralized material and waste, contains an estimated 2.7 billion tons of total material. Based on theseestimates, from the inception of production through year 34, the mill will process 820 million tons of ore at an average ore grade of 0.076%. During this timeperiod low-grade ore totaling 165 million tons with an average ore grade of 0.039% will be stockpiled for later feed into the mill from years 34 through 41. Waste material totaling 1.7 million tons will also be mined and disposed of on site. The total production is based on estimated life of mine and has a 0.034%Mo cutoff grade. In February, 2014, we announced the results of an internal study for operating the Mt. Hope Project in later years in a sustained lower molybdenumprice environment. The study considered an optional scenario which would provide ore for 24 years of mining and 30 years of milling, compared with thebase plan discussed above (34 years of mining and 41 years of milling). The optional scenario provides the LLC with flexibility to respond to a sustainedlower molybdenum price environment in later years, after the Mt. Hope Project is developed and operating. During the first nine years of production in the pit,there would be no meaningful change between the base and optional scenario developed by the study. The divergence would come in later years when theoptional scenario could be implemented if lower molybdenum prices are sustained long-term. 122Table of Contents 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 165 million tons at a grade of 0.039% Mo. Process Overview The process circuit will include: · Primary Crusher & Coarse Ore Stockpile—The primary crusher will be located adjacent to the pit and crushed ore will be fed to a70,000 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 micrometers in the two ball mills at an average daily processing rate of 66,688 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 six additional stages of cleanerflotation. 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 approximately89% is achievable across grades ranging from 0.04% through 0.1% Mo with final concentrate grades of approximately 54% to 56% Mo. · 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. Tailing Facility The proposed mining and processing operation is expected to produce approximately 24 million tons of tailing (including SO scrubber residue) peryear. Approximately 990 million tons of tailing will be produced. The tailing storage facility layout provides for the construction of one tailing impoundmentthat will contain approximately 30 years of operations. A second facility is planned for the remaining years. Both tailing impoundments will be constructedwith plastic liners to provide for groundwater protection. Reserves and Mineralized Material Our January 2014 Technical Report, which contained an updated statement of reserves and mineralized material, revised the previous proven andprobable estimates supported by the 2007 BFS. The new statement establishes proven reserves totaling 320,473 thousand tons of ore at an average grade of0.084% molybdenum and probable reserves totaling 664,129 thousand tons of ore at an average grade of 0.063% molybdenum, summarized as follows: Statement of Reserves and Mineralized MaterialUnits = Short Tons Reserves Cutoff GradeProven ReservesProbable ReservesProven+Probable Reserves%Mo SulfideKtonsMoGrade%KtonsMoGrade%KtonsMo Grade% 0.034%320,4730.084664,1290.063984,6020.070 132Table of Contents Additional Mineralized Material Cutoff GradeMeasuredIndicatedMeasured+Indicated%MoKtonsMoGrade%KtonsMoGrade%KtonsMo Grade% 0.025–0.034%12,9760.03352,2670.03365,2430.033 Footnotes to Statements of Reserves and Mineralized Material Mineralized material is tabulated at the cutoff grade of 0.025% Mo. The final reserve pit design was based on a molybdenum price of $12/lbmolybdenum in the saleable form of moly tri-oxide. As of December 31, 2013, the approximate three-year backward average price for molybdenumwas $12.86/lb, according to Ryan’s Notes, a ferro-alloy industry news and pricing publication (and the spot price for molybdenum on the same datewas approximately $9.75/lb). The three-year backward average is above the pit design price. The reserve at the Mt. Hope Project is based on a block model that utilized the statistical process of Indicator and Ordinary Linear Krigingconstrained by appropriate rock type and grade boundaries. Lerch Grossman pit design algorithms were used to establish the guidelines to designeight phases and the reserve pit. Mine planning utilized conventional mine equipment to prepare detailed mine cost estimates. The metallurgical recovery applied to the financial models used in the determination of reserves was variable by grade, with 89.8% for the first fiveyears of mining, 89.5% for the first ten years, and 88.8% for the life of mine. The molybdenum roaster recovery was held constant at 99.2%. Capital Cost Estimates The development of the Mt. Hope Project has a Project Capital Estimate of $1,312 million, which includes development costs of approximately$1,245 million and $67 million in cash financial guaranty/bonding requirements, advance royalty payments, and power pre-payment estimates. Thesecapital costs were updated in the third quarter of 2012, and were then escalated by approximately 3% in the third quarter of 2013, for those items not yetprocured or committed to by contract. The Mt. Hope Project has not materially changed in scope and is currently designed at approximately 65% engineeringcompletion, with solid scope definition. The pricing remains subject to escalation associated with equipment, construction labor and commodity priceincreases, and project delays, which will continue to be reviewed periodically. The Project Capital Estimate does not include financing costs or amountsnecessary to fund operating working capital and potential capital overruns, is subject to additional holding costs as the Company experiences delays inachieving its portion of financing for the Mt. Hope Project, and may be subject to other escalation and de-escalation as contracts and purchase arrangementsare finalized at then current pricing. From October 2007 through the year ended December 31, 2013, the LLC spent approximately $263.4 million of theestimated $1,312 million on development of the Mt. Hope Project. The anticipated capital requirements of the Mt. Hope Project are divided into cost categories in the following table: Millions $USCategory2012Estimate2013RevisedEstimateMining equipment$150$149Construction, materials & plant facilities583595Owners cost, pre-stripping, camp245265Taxes, freight, commissioning, spares7374Equipment suspension costs1111Engineering, Procurement, & Construction Mgmt7070Contingency7059Escalation—22Total Capital$1,2021,245Bonding and pre-paid items6767Total Capital Requirement$1,2691,312 Furthermore, ongoing replacement and sustaining mine equipment and process plant capital over the expected 41-year operating life is currentlyestimated to be approximately $786 million (in 2013 dollars). These amounts do not include financing costs, amounts necessary to fund operating workingcapital, or reclamation. We expect that these cost estimates will continue to evolve over time based on changes in the industry-wide cost structure as well aschanges in our operating strategies and initiatives for the project. 14Table of Contents 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. By theend of 2011, prices had pulled back to $13.30 per pound and decreased further to $11.50 per pound at the end of 2012. During 2013, molybdenum traded ina range of $9.10 per pound to $11.90 per pound, and as of late February 2014 traded at approximately $10.00 per pound according to Ryan’s Notes. 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 December 2013, CPM Group forecast that molybdenum prices would range between $11.00 and $13.00 per pound through 2018, then $14.35 in2019, $15.65 in 2020, $16.80 in 2021, and $17.50 in 2022. Production and Operating Cost Estimates Production over the life of the Mt. Hope Project is estimated to be 1.2 billion pounds of saleable molybdenum on a 100% basis. Average yearlyproduction over the first full five years is estimated at 40 million pounds of molybdenum. Direct operating costs for the Mt. Hope Project over the first full fiveyears of operation are anticipated to average $6.28 per pound, using $90 per barrel oil equivalent energy costs, and CAS per pound over the first full fiveyears of operation, including anticipated royalties calculated at $15 per pound molybdenum, are anticipated to average $7.00 per pound. Life of mine CASare estimated to be approximately $8.70 per pound of molybdenum at $90 per barrel oil, inclusive of anticipated royalty payments calculated at $15 perpound molybdenum. These cost estimates are based on 2013 constant dollars and are subject to cost inflation or deflation. 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$6.28$7.90Royalty payments (1) .72.80Total CAS$7.00$8.70 (1) Royalty payments are a function of assumed molybdenum prices realized. The above calculation assumes a molybdenum price of $15.00 perpound. 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, which will be due upon commencement of commercialproduction at the property. In connection with the transaction, we acquired $1.2 million in cash accounts and assumed all environmental liabilities on thereclaimed site. Additionally in 2007, we purchased all outstanding mineral claims associated with this property that were not previously owned by us thusgiving the Company 100% control over all mineral rights within the boundary of the property, as well as claims on BLM property adjacent to the patentedgrounds. 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 on the Liberty Property 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 15Table of Contents project economics. The completed report estimates molybdenum and copper reserves and resources, production, capital and operating cost parameters, alongwith project economics. The Liberty Property is viewed by the Company as a follow-on project to the Mt. Hope Project that we intend to actively pursuefollowing 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 Cyprus mined atotal of 50 million tons of ore grading 0.11 percent molybdenum. No further molybdenum mining took place after 1991, leaving an estimated 150 milliontons of un-mined ore at a grade of 0.09 percent molybdenum. A 100 million ton copper ore zone independent of the molybdenum pit 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 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 mine and ore milling facility on this property could be entirely on fee lands owned by us. As a result,initial permitting is anticipated to be through state agencies, including the NDEP. There are minor BLM landholdings in the footprint of planned wastestockpiles and the open pit, and at some future time we will pursue acquisition of these lands or perform Federal National Environmental Policy Act (“NEPA”)evaluations to permit use of these lands. Based on this and the project’s previous operations, we would expect to have a shorter permitting schedule ascompared 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. 16Table of Contents 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 pending action or proceeding relating to any regulatory matters that wouldaffect our financial position due to these inactive mining claims in Shoshone County. 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 of America (“federal lands”). The LLC, as the owner or leaseholder of theunpatented mining claims, has the right to conduct mining operations on the lands subject to the required operating permits and approvals, compliance withthe terms and conditions of the Mt. Hope Lease, and compliance with applicable federal, state, and local laws, regulations and ordinances. On federal lands,mining rights are governed by the General Mining Law of 1872, as amended, 30 U.S.C. UU 21-161 (various sections), which allows for the location ofmining claims on certain 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 obtained the required principal environmental operating permits for the Mt. Hope Project in November 2012 in anticipation of the commencementof construction and availability of financing for the Mt. Hope Project. Baseline studies and data acquisition to support permitting were initiated in the fourthquarter of 2005. Facility designs and operational plans have been refined as data was collected and reviewed to minimize environmental impacts and facilitatethe permitting process. The planned mining and processing operations are consistent with numerous other permitted projects in Nevada, in terms of methods,facility design, equipment, and related engineering plans. Permitting Process Overview The development, operation, closure and reclamation of mining projects in the United States of America 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 begranted, but instead focuses on those that are considered to be critical for project start-up. 17Table of Contents 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. Reports summarizing background information on geology, air quality, soils, biology, water resources, wildlife, vegetation, noise, visual resources,social and economic conditions, and cultural resources have been assembled and have been submitted to the appropriate regulatory agencies. These reportshave been approved during the permitting process. Mt. Hope Permitting Requirements The Mt. Hope Project required both federal and state permits before construction and operations could commence. Major permits required for the Mt.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, received in November 2012, and an Air Quality Permit (“AQP”) from the NDEP—BAPC, received inMay 2012. Plan of Operations Approval—Bureau of Land Management The BLM has prepared 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 issued the ROD for the Mt. Hope Project. The ROD became effective on November 16, 2012; the date the BLMrecorded its decision to approve the EIS and Plan of Operations (“PoO”) for the Mt. Hope Project. 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 reduce potential environmental liability, and promote good community and social responsibility. Potential impacts addressed in the ROD are primarily related to geochemistry and the associated potential for acid generation from waste rock, thewater quality in the post-mining pit lake, and the potential mobilization of constituents in the tailings. Other significant potential impacts include effects ofgroundwater pumping on existing water rights and/or surface water flows, air emissions, reduction of wildlife habitat (including a federally listed sensitivespecies) and the socioeconomic impact to the community of Eureka. Extensive laboratory testing has been conducted to fully evaluate the geochemistry of allmaterial types that will be mined. The waste rock disposal facilities and tailing impoundment designs incorporate components to minimize potential impacts,consistent with accepted and demonstrated industry practices. Hydrological and geochemical computer modeling predicts that the post-mining pit lake waterquality will not pose a threat to wildlife and will therefore not require treatment. Air emissions will be reduced by using control technology and leading industrypractices. A detailed reclamation plan has been developed to re-establish post-mining land uses, including wildlife habitat. Other resource-specific mitigationplans have been developed, including those for wild horses and burros, bats, cultural resources, the Pony Express Trail, sage grouse habitat, water resources,and fugitive dust. Environmental regulations related to reclamation require that the cost for a third party contractor to perform reclamation activities on theminesite be estimated. The $73.4 million reclamation cost estimate is the basis for the required financial guarantee amount. The LLC was required to post afinancial instrument held by the BLM to provide a guarantee that this amount will be available to BLM and NDEP for use in conducting reclamation shouldwe become insolvent or default on our reclamation obligations. The BLM also holds a bond of $0.1 million to provide funds to assure reclamation ofpreviously approved exploration disturbance. Additionally, a reclamation cost estimate of $1.3 million was approved to remove and reclaim disturbanceassociated with the grant of rights-of-way for the 230 kV power transmission line. A group of surety underwriters arranged by Marsh USA was assembled tosatisfy these financial guarantees through the posting of bonds. The surety program was funded with an initial payment of $5.6 million in December 2012and requires additional payments of $11.6 million throughout the construction period for a total cash funding amount of $17.2 million for annual premiumsand collateral. Although the Reclamation Permit is administered by the NDEP-BMRR, BLM review is required and the reclamation cost estimate wasapproved in conjunction with approval of the PoO. The $73.4 million reclamation cost estimate addresses the anticipated activities for a three-year period from the point of PoO approval. Thereclamation cost estimate will be recalculated every three years to include the current activities and those activities anticipated to be completed during thesubsequent three-year period. Financial guarantees held by the BLM will be adjusted periodically in conjunction with the growth of the waste rock pile and thetailing impoundments, as well as completion of concurrent reclamation. It is estimated that financial guarantee requirements could reach $171.8 million at theanticipated end of the project (year 41), assuming no concurrent reclamation activities occur. Additionally, through the ROD, the BLM has determined that a Long Term Funding Mechanism (“LTFM”) is required for post-reclamationobligations, including long-term monitoring and mitigation at the Mt. Hope Project site. The LTFM approximates an undiscounted cost estimate of $83.2million for mitigation and monitoring for a 500-year period post reclamation. The Company completed preparation of a trust, designating the BLM asbeneficiary, initially funded in the amount of $0.3 million to fund this long-term post-reclamation obligation. 18Table of Contents 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. The Nevada State Engineer (“State Engineer”) has issued all water permits for the Mt. Hope Project. Eureka County, Nevada and two other partiescomprised of three individual water rights holders in Diamond Valley and one in Kobeh Valley filed an appeal in July 2012 to the Nevada Supreme Courtchallenging the granting of water permits by the State Engineer. On June 26, 2013, the appeal was consolidated with a similar appeal of the State Engineer’sapproval of the LLC’s Monitoring, Management and Mitigation Plan (“3M Plan”), discussed below, and remains pending before the Nevada Supreme Court. Two individual water rights holders appealed the State Engineer’s approval of the Company’s 3M Plan to the Nevada State District Court (“DistrictCourt”). Following oral argument on April 15, 2013, the District Court denied the Petition for Judicial Review of the 3M Plan and issued its Written Order onMay 17, 2013. Thereafter, Petitioners filed an appeal on May 20, 2013 of the District’s Court Order to the Nevada Supreme Court, which, as discussedabove, has been consolidated with the appeal of the water permits. We remain confident the Nevada Supreme Court will uphold the District Court’s Orders regarding the 3M Plan and the water permits. We expect theCourt to set the date for oral arguments for the second quarter of 2014, before the full panel of Justices. Notwithstanding the above, subject to the ongoing Nevada Supreme Court consolidated appeal, the Company’s water permits have been granted andthe water remains available to the Company, as described above, for use at the Mt. Hope Project. Water Pollution Control and Reclamation Permits—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. The Reclamation Permit approves the proposed reclamation methods, specifies reclamation objectives, and requires bonding based on the reclamation costestimate. We received the WPC Permit and the Reclamation Permit in November 2012. Air Quality Permit—Nevada Division of Environmental Protection—Bureau of Air Quality The Nevada BAPC regulations categorize permit types as Class 1 or Class 2, based on the estimated emissions amounts. The Mt. Hope Project issubject to a Class 2 permit (smaller emissions) based on emissions estimates. The permit application included an emissions inventory and dispersionmodeling to demonstrate that emissions from the project will not exceed established air quality standards. Emissions are primarily associated with thecrush/grind circuit (particulate matter) and the roaster (sulfur oxides). Roaster emissions will be controlled with a 99.7% estimated removal efficiency forsulfur oxides. We received the AQP in May 2012. 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 the largely privately heldproperty with existing water rights. We control over 14,000 acres, including 5,054 acres of fee land, 946 acres of patented lode claims, 63 acres of patentedmillsite claims and 7,984 acres of unpatented lode claims. Our ownership of the assets and mineral rights at the Liberty Property include most of the landsrequired for future operations and all of the mineral rights. Thus, we are evaluating the option of initiating a new molybdenum mine and ore processingoperation completely on lands owned by us, thereby avoiding the Federal NEPA process for access and use of neighboring BLM land. Based on the pre-feasibility study completed in November 2011, the initial three years for a new molybdenum operation and mine on this property will be completely on feeland owned by us. As a result, construction and initial production could occur simultaneously with federal permitting efforts. State permits, including thewater pollution control, reclamation and air quality permits comparable to those described in previous sections, would be required for the Liberty Property siteand the level of analysis and time required is anticipated to be consistent with those described for the Mt. Hope Project. In addition to land ownership, two other factors distinguish the Liberty property from the Mt. Hope Project with respect to environmental permitting. First, water consumption is not as significant an issue at Liberty. Unlike the Mt. Hope Project, the areas surrounding Liberty are not extensively irrigated. Inaddition, we own significant water rights at the Liberty site and have water wells 19Table of Contents in place. Second, the area has been mined previously which has resulted in significant surface disturbance. By conducting exploration drilling on pre-existingdisturbance to the extent possible, the amount of disturbance created by exploration drilling is greatly reduced, and permitting requirements to supportexploration are reduced. Furthermore, there is extensive environmental information developed to support permitting of the previous mine operation. Weanticipate that this information can be used to streamline the permitting process by reducing the amount of baseline studies and other technical information thatmust be developed by the Company. 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. 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 wellfield for the Mt. Hope Project. Although hydrologic modeling predicts no impacts to these stream segments,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 include all of the material risks known to us, however, additional risks and uncertainties not presentlyknown to us or that we 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. 20Table of Contents 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. China Development Bank has suspended work on the Term Loan and we have not obtained, and may not obtain, alternative financing, whichcould cause additional delays or expenses in developing the Mt. Hope Project. The Company was notified on March 20, 2013 that China Development Bank had provided instructions to its legal counsel to suspend work on theTerm Loan. The Company is working to secure another strategic partner in or outside of China to help advance the full financing of the Mt. Hope Project. The Company has also begun to pursue other potential financing sources such as capital markets, domestic and international credit markets, and bankproject financing. There is no assurance that a suitable partner will be identified or that alternative financing can be achieved on economically suitable terms,or at all. 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 continue to make theirrequired on-going capital contributions as outlined in the LLC Agreement. We may not be able to obtain additional financing necessary for achievingproduction at the Mt. Hope Project if these contributions are not made. We continue to review the technical merits of the Liberty Property, which would also require significant additional capital to permit and/or commencemining activities. 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. 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; 21Table of Contents · 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-Minerals, other than in each instance a purchase moneysecurity interest or other security interest in the LLC to finance the acquisition or lease of 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 several that are beyond the control of any mining company. These factorsinclude fluctuations 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 licenses which could cause us to lose our interests in, or be forced to sell, ourproperties; 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 2014 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. Prices traded in a relatively narrow range during 2013 and finished the year at $9.75 per pound. Although we estimate the Mt. Hope Project’s average cost ofproduction over the first five years to be approximately $7.00 per pound, a sustained period of lower molybdenum prices would have material negativeimpacts on the Company’s profitability. Actual molybdenum prices when and if we commence commercial production cannot be estimated and are subject tonumerous factors outside our control. 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. Sustained low molybdenum demand resulting from a prolonged global financial crisis maycause prolonged periods of low molybdenum prices ultimately resulting in a continued suspension of our development or, in the future, a suspension of ourmining 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 128.0 million annual pounds of production could be added to the supply of molybdenum (including a portion of the 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. 22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, and Sojitz contain provisions allowing forthe sale of molybdenum at certain floor prices, or higher, over the life of the agreements. During the past 18 months there have been periods where the spotmolybdenum prices fell below the inflation-adjusted floor prices in the contracts. During these time periods all three contracts would have provided for theCompany to sell molybdenum at above-spot prices. In the event that our contract parties choose not to honor their contractual obligations, our profitabilitymay be adversely impacted. We may be unable to sell any product our contract parties fail to purchase in a timely manner, at comparable prices, or at all. 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 was required to obtain a ROD from the BLM authorizing implementation of the Mt. Hope Project PoO. The LLCwas also required 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 requiring 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 continued delays in developing the Mt. Hope Project. These could increase its development costs, affect its economicviability, or prevent us from completing its development. The timing of development of the Mt. Hope Project depends on many factors, some of which arebeyond our and the LLC’s control, including: · Timely availability of equipment; · Continued appeal or unfavorable order concerning the water rights ruling, 3M plan, or permits, including the ROD; · Sustained low prices for molybdenum; · Acquisition of surface land and easement rights required to develop and operate the project; · Completion of advanced engineering; · Timely availability of project financing to construct the Mt. Hope Project; and · Timely availability of labor and resources from construction contractors throughout construction of the project. In addition, factors such as sustained low prices of molybdenum and volatility in foreign exchange or interest rates could adversely affect our abilityto obtain adequate financing to fund the development of the project on a timely basis. Any delays caused by our inability to raise capital when needed maylead to the cancellation or extension of, or defaults under, agreements with equipment manufacturers or a need to sell equipment already purchased, any ofwhich may adversely impact the Mt. Hope Project timeline. Additionally, delays to the Mt. Hope Project schedule have consequences with regard to our LLCagreement with POS-Minerals, including potential claims by POS-Minerals, which may serve to increase our capital obligations and further enhance this riskfactor. 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, 23Table of Contents production, and the evaluation of mine plans subsequent to the date of any estimate may justify revision of such estimates. The volume and grade ofmineralization and reserves recovered and rates of production may be less than anticipated. Assumptions about prices are subject to greater uncertainty andmetals prices have fluctuated widely in the past. Further declines in the market price of molybdenum and copper may render mineralization and reservescontaining relatively lower grades of ore uneconomic to exploit, which may materially and adversely impact our reserve and mineralization estimates at ourprojects. Changes in operating and capital costs and other factors including, but not limited to, short-term operating factors such as the need for sequentialdevelopment of ore bodies and the processing of new or different ore grades, may also materially 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 maintain 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 has inherent dangers and is 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 industry) at a reasonable price. To the extent that we become subject to environmental liabilities, the satisfaction of any suchliabilities would reduce funds otherwise available to us and could have a material adverse effect on us. Laws and regulations intended to ensure the protectionof the environment are constantly 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. 24Table of Contents 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 of theCompany’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. Non-compliance with our Mt. Hope Mines Inc. Lease could result in loss of the LLC’s rights to develop the Mt. Hope Project and may adverselyaffect our business 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 VicePresident and General Manager, Controller and Treasurer, and Vice President of Environmental and Permitting. We will be required to recruit additionalpersonnel and to train, motivate and manage these new employees. The number of persons skilled in the development and operation of mining properties islimited and significant competition exists for these individuals. We implemented salary reductions to our executives and senior managers to reduce costs whilethe Company sees to arrange project financing. Our retention program including cash stay incentives and equity incentives may not be successful in retainingour executives and key employees. We may not be able to attract and retain qualified personnel in the future. We do not maintain “key person” life insuranceto cover our executive officers. Due to the relatively small size of our 25Table of Contents company and the specific skill sets of our key employees, the loss of any of our key employees or our failure to attract and retain key personnel may delay orotherwise adversely affect the development of the Mt. Hope Project, which could have a material adverse effect on our 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 U.S. Congress, which may include imposition of a governmental royalty and new permitting and environmental rules. 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. 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 project financing; · Difficulty of estimating construction costs over a period of years; and · Delays in obtaining and maintaining environmental or other government permits, including appeals of granted water applications and the ROD. 26Table of Contents 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 · 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; · Our ability to obtain project financing for the development and construction of the Mt. Hope Project; · The ability to obtain and maintain 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; · Risks related to the failure of POS-Minerals to make ongoing cash contributions pursuant to the LLC Agreement; · Fluctuations in the market price of, and demand for, molybdenum and other metals; 27Table of Contents · 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 statements are reasonable, our actual results could differ materially from those expressed in these forward-looking statements, and any events anticipated in the forward-looking statements may not actually occur. ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 3. LEGAL PROCEEDINGS The Nevada State Engineer (“State Engineer”) has issued all water permits for the Mt. Hope Project. Eureka County, Nevada and two other partiescomprised of three individual water rights holders in Diamond Valley and one in Kobeh Valley filed an appeal in July 2012 to the Nevada Supreme Courtchallenging the granting of water permits by the State Engineer. On June 26, 2013, the appeal was consolidated with a similar appeal of the State Engineer’sapproval of the LLC’s Monitoring, Management and Mitigation Plan (“3M Plan”), discussed below, and remains pending before the Nevada Supreme Court. Two individual water rights holders appealed the State Engineer’s approval of the LLC’s 3M Plan to the Nevada State District Court (“DistrictCourt”). Following oral argument on April 15, 2013, the District Court denied the Petition for Judicial Review of the 3M Plan and issued its written Order onMay 17, 2013. Thereafter, Petitioners filed an appeal on May 20, 2013 of the District Court’s Order to the Nevada Supreme Court, which as discussed abovewas consolidated with the appeal of the water permits. We remain confident the Nevada Supreme Court will uphold the District Court’s Orders regarding the 3M Plan and the water permits. We expect theCourt to set the date for oral argument for the second quarter of 2014, before the full panel of Justices. Notwithstanding the above, subject to the ongoing Nevada Supreme Court consolidated appeal, the Company’s water permits have been granted andthe water remains available to the Company, as described above, for use at the Mt. Hope Project. On February 15, 2013, Great Basin Resource Watch and the Western Shoshone Defense Project (“Plaintiffs”) filed a Complaint against the U.S.Department of the Interior and the BLM in the U.S. District Court, District of Nevada, seeking relief under the NEPA and other federal laws challenging theBLM’s issuance of the ROD for the Mt. Hope Project, and on February 20, 2013 filed a Motion for Preliminary Injunction. The Court allowed the LLC tointervene in the matter. On August 22, 2013, the Court denied, without prejudice, the Motion for Preliminary Injunction based on the parties’ Joint Stipulation to ContinuePreliminary Injunction Oral Argument, which advised the Court that as a result of current economic conditions, including the Company’s ongoing financingefforts, all major ground disturbing activities had ceased at the Mt. Hope Project. The Court’s “without prejudice” ruling means that upon the Company’sdecision to recommence significant ground-disturbing activities which were approved by the ROD, sixty days advance notice will be provided to Plaintiffs, orif Plaintiffs believe the scope of minor ongoing approved site activities exceeds the stipulated agreement, then Plaintiffs may elect to re-file their Motion 28Table of Contents for Preliminary Injunction at that time. The parties and the Court have agreed to address the Plaintiffs’ claims under the pending Complaint based on theadministrative record and the parties’ motion for summary judgment briefing on the merits. Briefing by the parties and probable oral argument is anticipatedto be completed in the second quarter 2014. The Mt. Hope Project underwent exhaustive environmental analysis and review that lasted more than 6 years. The process to complete the finalEnvironmental Impact Statement (“EIS”) included extensive public and cooperating agency input (including the BLM, the National Park Service, the U.S.Environmental Protection Agency, the Nevada Division of Wildlife and the County of Eureka). The Company supports the work completed by the BLM andbelieves that the ROD complies will all federal statutes and rules, and is very robust and defensible. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIES Market Information Our common stock trades on the NYSE MKT under the symbol “GMO.” On February 14, 2008 our common stock began trading on the TorontoStock Exchange (“TSX”), also under the symbol “GMO.” The following table sets forth our common stock closing price as reported on the NYSE MKT: YearQuarterHighLow2013First Quarter$4.23$2.17Second Quarter$2.24$1.72Third Quarter$2.05$1.59Fourth Quarter$1.73$1.062012First Quarter$4.08$3.18Second Quarter$3.45$2.48Third Quarter$3.27$2.66Fourth Quarter$4.14$3.11 Holders As of March 6, 2014, there were approximately 450 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. 29Table of Contents Stock Performance Graph The performance graph covers the period from December 31, 2008 through December 31, 2013. 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. Company31-Dec-0831-Dec-0931-Dec-1031-Dec-1131-Dec-1231-Dec-13General Moly (GMO)$100.00$176.27$549.15$261.86$339.83$113.56Thompson Creek Metals (TCM)100.00293.73368.92174.44104.0154.64Moly Mines (MOL)100.00223.68331.5881.5836.8431.58Freeport McMoRan (FCX)100.00328.51506.06319.64306.79338.55Augusta Resources (AZC)100.00526.09828.26673.91532.61310.87iShares Dow Jones Basic Materials100.00166.37221.30189.52210.69252.56iShares Russell 2000100.00130.51167.84161.76190.44264.14 ITEM 6. SELECTED FINANCIAL DATA (in millions, except per share data)For the Years Ended December 31,20132012201120102009Loss from operations(9.8)(11.4)(15.2)(16.6)(10.5)Net loss(16.3)(9.9)(14.8)(16.7)(10.5)Basic and diluted net loss per share$(0.18)$(0.11)$(0.16)$(0.22)$(0.14) At December 31,20132012201120102009Total assets$360.7$385.5$271.1$273.0$209.6Long-term obligations24.839.830.436.394.3Contingently redeemable noncontrolling interest209.0201.998.198.899.8Total stockholders’ equity$134.8$148.1$143.1$136.4$104.9 30Table of Contents 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, 2013, 2012 and 2011. 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. Project Ownership 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 Eureka Moly, LLC (“the LLC”), and in February 2008entered into an agreement (“LLC Agreement”) for the development and operation of the Mt. Hope Project with POS-Minerals Corporation (“POS-Minerals”). Under the LLC Agreement, POS-Minerals owns a 20% interest in the LLC and General Moly, through Nevada Moly, LLC (“Nevada Moly”), a wholly-ownedsubsidiary, owns an 80% interest. The ownership interests and/or required capital 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 capital contributions to the LLC totaling $100.0 million duringthe year ended December 31, 2008 (“Initial Contributions”). Additional amounts of $100.7 million were received from POS-Minerals in December 2012,following receipt of major operating permits for the Mt. Hope Project, including the Record of Decision (“ROD”) from the U.S. Bureau of Land Management(“BLM”). In addition, as commercial production at the Mt. Hope Project was not achieved by December 31, 2011, the LLC will be required to return to POS-Minerals $36.0 million of its capital contributions, with no corresponding reduction in POS-Minerals’ ownership percentage. This return of contributionspayment is contingent upon the commencement of commercial production, as defined in the LLC Agreement, and will be due 20 days thereafter. Based on ourcurrent plan, subject to availability of full financing for construction of the Mt. Hope Project, we anticipate commercial production will be achieved following a20 — 24 month construction period. Nevada Moly is obligated under the terms of the LLC Agreement to make capital contributions to the LLC to fund thereturn of contributions to POS-Minerals upon achievement of commercial production (i.e. when the contingency is resolved). If Nevada Moly does not fundtheir additional capital contribution in order for the LLC to return to POS-Minerals $36 million of its total capital contributions, POS-Minerals has an electionto either make a secured loan to the LLC to fund the return of contributions, or receive an additional interest in the LLC of approximately 5%. In the lattercase, Nevada Moly’s interest in the LLC is subject to dilution by a percentage equal to the ratio of 1.5 times the amount of the unpaid return of contributionsover the aggregate amount of deemed capital contributions (as determined under the LLC Agreement) of both parties to the LLC (“Dilution Formula”). AtDecember 31, 2013, the aggregate amount of deemed capital contributions of both parties was $1,063.5 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 the development andoperation of the Mt. Hope Project as contemplated by the parties for a period of twelve consecutive months. If POS-Minerals puts its interest, Nevada Moly orits transferee or surviving entity would be required to purchase the interest for 120% of POS-Minerals’ total contributions to the LLC, which, if not paidtimely, would be subject to 10% interest per annum. Beginning in November 2012, the Company and POS-Minerals had begun making monthly pro rata capital contributions to the LLC to fund costsincurred as required by the LLC Agreement. The interest of a party in the LLC that does not make its monthly pro rata capital contributions to fund costsincurred is subject to dilution based on the Dilution Formula. The Company and POS-Minerals consented, effective July 1, 2013, to Nevada Moly acceptingfinancial responsibility for POS-Minerals’ 20% interest in costs related to Nevada Moly’s compensation and reimbursement as Manager of the LLC, andcertain owners’ costs associated with Nevada Moly’s ongoing progress to complete project financing for its 80% interest, resulting in approximately $3.0million to be paid by Nevada Moly on behalf of POS-Minerals during the term of the consensual agreement, which will be in place until the earlier ofcompletion of Nevada Moly’s financing efforts or June 30, 2014. POS-Minerals remains obligated to contribute its 20% interest in all other costs incurred bythe LLC. Other than those costs noted, through December 31, 2013 and to date through 2014, all required monthly contributions have been made by bothparties. 31Table of Contents Permitting Completion and Project Restart On November 16, 2012, the BLM issued its ROD authorizing development of the Mt. Hope Project. The ROD approves the Plan of Operations(“PoO”) for construction and operation of the mining and processing facilities and also grants the Rights-of-Way for a 230kV power transmission line,discussed below. Monitoring and mitigation measures identified in the ROD, developed in collaboration with the regulatory agencies involved throughout thepermitting process, will avoid, minimize, and mitigate environmental impacts, and reflect the Company’s commitment to operate the Mt. Hope Project to thehighest environmental standards. On February 15, 2013, Great Basin Resource Watch and the Western Shoshone Defense Project (“Plaintiffs”) filed a Complaint against the U.S.Department of the Interior and the BLM in the U.S. District Court, District of Nevada, seeking relief under the National Environmental Policy Act (“NEPA”)and other federal laws challenging the BLM’s issuance of the ROD for the Mt. Hope Project, and on February 20, 2013 filed a Motion for PreliminaryInjunction. The Court allowed the LLC to intervene in the matter. On August 22, 2013, the Court denied, without prejudice, the Motion for Preliminary Injunction based on the parties’ Joint Stipulation to ContinuePreliminary Injunction Oral Argument, which advised the Court that as a result of current economic conditions, including the Company’s ongoing financingefforts, all major ground disturbing activities had ceased at the Mt. Hope Project. The Court’s “without prejudice” ruling means that upon the Company’sdecision to recommence significant ground-disturbing activities which were approved by the ROD, sixty days advance notice will be provided to Plaintiffs, orif Plaintiffs believe the scope of minor ongoing approved site activities exceeds the stipulated agreement, then Plaintiffs may elect to re-file their Motion forPreliminary Injunction at that time. The parties and the Court have agreed to address the Plaintiffs’ claims under the pending Complaint based on theadministrative record and the parties’ motion for summary judgment briefing on the merits. Briefing by the parties and probable oral argument is anticipatedto be completed in second quarter 2014. The Mt. Hope Project underwent exhaustive environmental analysis and review that lasted more than 6 years. The process to complete theEnvironmental Impact Statement (“EIS”) included extensive public and cooperating agency input (including the BLM, the National Park Service, the U.S.Environmental Protection Agency, the Nevada Division of Wildlife and the County of Eureka). The Company supports the work completed by the BLM andbelieves that the ROD complies with all federal statutes and rules, and is very robust and defensible. The State of Nevada Division of Environmental Protection (“NDEP”) issued a Reclamation Permit for the Mt. Hope Project on November 19, 2012,which authorizes surface disturbance and construction of facilities. The Reclamation Permit also approves the Phase 1 reclamation cost estimate ofapproximately $73.4 million to begin construction in 2013 and established bonding requirements based on this estimate. On December 18, 2012, BLMaccepted the LLC’s reclamation surety bonding in satisfaction of financial guarantee requirements under the ROD for the Mt. Hope Project. The surety bondprogram has been funded with an initial cash payment of $5.6 million and requires additional cash funding of $11.6 million through the constructionprocess for a total of $17.2 million, which is in alignment with the net cash bonding cost included in the December 2013 Project Capital Estimate. This total,comprised of the $17.2 million in cash and the remainder in surety bonding, covers the initial surface disturbance and facilities anticipated to be in place inthe first three years following construction of the Mt. Hope Project, which are subject to ongoing evaluation thereafter. With the surety program in place and theinitial contribution funded, the BLM has authorized that surface disturbance in conformity with the ROD may proceed. On May 29, 2012, NDEP issued a Class II Air Quality Operating Permit for the Mt. Hope Project. This permit establishes operating restrictionsand monitoring requirements associated with specific air emission points. On November 26, 2012, NDEP issued a Water Pollution Control Permit (“WPC”) for the Mt. Hope Project. The WPC also approves the operationaland closure plans for the Mt. Hope Project, and establishes monitoring requirements. The LLC initiated cultural clearance activities at the Mt. Hope Project in early December 2012 upon receipt of an Archaeological Resource ProtectionAct Permit issued by the State Archeologist at the Nevada State Office of the BLM. Cultural clearance is an important component of the LLC’s commitment toenvironmental protection and will be completed before major earthworks are done in any of the construction areas. The LLC has cleared priority areas forinitial construction and will continue mitigation throughout the disturbance footprint. Use of this phased approach is intended to allow the LLC to maintainuninterrupted construction progress once construction resumes. On January 2, 2013, the Public Utilities Commission of Nevada (“PUCN”) issued the LLC a permit to construct a 230kV power line thatinterconnects with Nevada Energy’s transmission system at the existing Machacek Substation located near the town of Eureka, Nevada and extend itapproximately 25 miles to the planned Mt. Hope Substation. In addition, the BLM approved the LLC’s surety bonds for reclamation of disturbanceassociated with construction of the 230kV power transmission line. The PUCN permit 32Table of Contents and approved bond allows the LLC to build the transmission infrastructure in a timely manner and provide the necessary capacity to power constructionactivities and Mt. Hope Project operations. Construction of the transmission line will also include upgrades to the existing Machacek Substation near Eurekathat will improve the reliability of electrical power to the community. At full production the Mt. Hope Project will have a total electrical demand load ofapproximately 75 megawatts. Transmission capacity was secured in 2008 and the LLC will negotiate for generating capacity prior to Mt. Hope Projectcommissioning activities, which will be available once the power line is constructed and energized. On January 17, 2013, the Federal Energy Regulatory Commission approved an Engineering, Procurement and Construction Agreement contractbetween Nevada Energy and Mt. Wheeler Power. In turn, in early January 2013, the LLC put in place a contract with Mt. Wheeler Power to provide theinterconnect facilities to the Mt. Hope Project. The contract scope is to design and install the interconnect facility at the Machacek Substation, near the town ofEureka, to connect the LLC’s future 230kV power line to the utility. The LLC initiated preliminary construction activities in early January 2013 including early wellfield development and clearing and grubbing ofterrain. Completion of the wellfield and water distribution systems are key items to begin major construction activities. Preliminary work also includedclearing the open pit minesite, millsite, tailings dam and administrative office areas. Further activities have been suspended as a result of the delay infinancing for the Mt. Hope Project and will resume as financing becomes available. Capital & Operating Cost Estimates The development of the Mt. Hope Project has a Project Capital Estimate of $1,312 million, which includes development costs of approximately$1,245 million and $67 million in cash financial guaranty/bonding requirements, advance royalty payments, and power pre-payment estimates. Thesecapital costs were updated in the third quarter of 2012, and were then escalated by approximately 3% in the third quarter of 2013, for those items not yetprocured or committed to by contract. The Mt. Hope Project has not materially changed in scope and is currently designed at approximately 65% engineeringcompletion, with solid scope definition. The pricing remains subject to escalation associated with equipment, construction labor and commodity priceincreases, and project delays, which will continue to be reviewed periodically. The Project Capital Estimate does not include financing costs or amountsnecessary to fund operating working capital and potential capital overruns, is subject to additional holding costs as the Company experiences delays inachieving its portion of financing for the Mt. Hope Project, and may be subject to other escalation and de-escalation as contracts and purchase arrangementsare finalized at then current pricing. From October 2007 through the year ended December 31, 2013, the LLC spent approximately $263.4 million of theestimated $1,312 million on development of the Mt. Hope Project. The LLC’s Project Operating Cost Estimate forecasts molybdenum production of approximately 40 million pounds per year for the first five years ofoperations at estimated average direct operating costs of $6.28 per pound, based on $90 per barrel oil equivalent energy prices. The Costs Applicable to Sales(“CAS”) per pound, including anticipated royalties calculated at a market price of $15 per pound molybdenum, are anticipated to average $7.00 per pound. For a reconciliation of direct operating costs, a non-GAAP measure, to CAS, see “Business—Description of the Mt. Hope Project—Reserves andMineralized Material—Production and Operating Cost Estimates” below. These cost estimates are based on 2013 constant dollars and are subject to costinflation or deflation. Equipment and Supply Procurement Through December 31, 2013, the LLC has made deposits and/or final payments of $74.1 million on equipment orders, has spent approximately$177.3 million for the development of the Mt. Hope Project and has paid $12.0 million into an escrow arrangement for electricity transmission services, for atotal Mt. Hope Project inception-to-date spend of $263.4 million. In late 2012 and early 2013, the LLC made additional commitments for wellfield materials and equipment, and placed purchase orders for long-leadprocess equipment including the commitments for the engineering portion of flotation cells and roaster equipment. Based on such commitments, atDecember 31, 2013, we expect to make additional payments of approximately $2.6 million in 2014 and $12.8 million in 2015. Based on our current cash onhand and our ongoing cash conservation plan, the Company expects it will have adequate liquidity through the end of 2014. However, additional financingwill be required to meet commitments and operating costs in 2015. In 2012, the LLC issued a firm purchase order for eighteen haul trucks. The order provides for delivery of those haul trucks required to performinitial mine development, which will begin several months prior to commercial production. Non-refundable down-payments of $1.2 million were made in2012, with pricing subject to escalation as the trucks were not delivered prior to December 31, 2013. During the third quarter of 2013, the LLC renegotiatedthe timelines for truck delivery, accepting a 3% price increase and delaying deliveries into late 2014. The contract is cancellable with no further liability to theLLC. 33Table of Contents Also in 2012, the LLC issued a firm purchase order for four mine production drills with a non-refundable down-payment of $0.4 million, andpricing was subject to escalation if the drills were not delivered by the end of 2013. In June of 2013, the LLC signed a change order, which delayed deliveryinto the second half of 2014 and triggered a $0.2 million price increase. The contract remains cancellable with no further liability to the LLC. On June 30, 2012, the LLC’s contract to purchase two electric shovels expired. On July 11, 2012, we signed a letter of intent with the same vendorproviding for the opportunity to purchase the electric shovels at prices consistent with the expired contract, less a special discount in the amount of $3.4million to provide credit to the LLC for amounts paid as deposits under the expired contract. The letter of intent provides that equipment pricing will remainsubject to inflation indexes and guarantees production slots to ensure that the equipment is available when required by the LLC. In October 2013, the partiesagreed to extend the letter of intent through June 30, 2014. Termination of Agreements with Hanlong (USA) Mining Investment Inc. In March 2010, we signed a series of agreements with Hanlong (USA) Mining Investment, Inc. (“Hanlong”), an affiliate of Sichuan Hanlong Group,a privately held Chinese company. The agreements formed the basis of a $745 million transaction that was intended to provide the Company with adequatecapital to contribute its 80% share of costs to develop the Mt. Hope Project. The agreements included: (a) a Securities Purchase Agreement (the “PurchaseAgreement”) that provided for the sale to Hanlong of shares of our common stock in two tranches that would have aggregated 25% of our outstanding stock ona fully diluted basis for $80 million ($40 million per tranche), conditioned upon us receiving permits for the Mt. Hope Project and Hanlong’s obligation to usecommercially reasonable efforts to procure a $665 million loan from a Prime Chinese Bank (“Term Loan”) for our use in constructing the Mt. Hope Project;(b) a Stockholder Agreement that provided Hanlong representation on our Board of Directors (“Board”) and provided Hanlong representation on the LLCmanagement committee, governed how Hanlong would vote its shares of the Company and limited Hanlong’s ability to purchase or dispose of our securities;(c) a Bridge Loan whereby Hanlong provided $10 million to the Company to preserve liquidity until permits were received and the Term Loan was available;and (d) a long-term molybdenum supply off-take agreement (discussed further in Item 3 below) which required Hanlong to purchase the Company’s entireshare of the Mt. Hope Project’s molybdenum production above that necessary for the Company to meet its pre-existing supply commitments until the expirationof those commitments (collectively, the “Hanlong Transaction”). Pursuant to the Purchase Agreement, on December 20, 2010, we closed on the first trancheand issued 11,843,341 shares of common stock to Hanlong for a purchase price of $40 million, or approximately $3.38 per share. We granted Hanlongregistration rights with respect to those shares. The Company filed a Registration Statement on Form S-3 in December 2013, which, among other transactionsincluded registration of the Hanlong shares, thereby allowing Hanlong to sell their shares to a third party. The registration statement was declared effective onJanuary 29, 2014. After the closing of the first tranche, Hanlong became entitled to nominate one director to serve on our Board and one representative to theLLC management committee. Nelson Chen was designated by Hanlong to serve in both of these capacities. On March 20, 2013, the Company was notified that China Development Bank (“CDB”) had suspended work on the Term Loan. This suspensionrelates to reports that Mr. Liu Han, Chairman of Hanlong had been detained by Chinese authorities. In August 2013, the Company terminated its ongoing relationship with Hanlong. The Purchase Agreement provided that it could be terminated byeither party (providing the terminating party was not in default) if the closing of the second tranche had not occurred on or before the earlier of December 31,2012 or August 16, 2013 (the date which is nine months after the issuance of the ROD). In August 2013, the Company notified Hanlong that it wasterminating the Purchase Agreement as Hanlong had not met its commitments under the agreement. Hanlong acknowledged and consented to the termination. As a result of the termination of the Purchase Agreement, Hanlong was obligated to pay the Company a break fee of $10.0 million because Hanlongfailed to arrange the Term Loan within the above described deadline. The Company and Hanlong have agreed to offset the break fee against the repayment ofthe Bridge Loan. The outstanding balance of the Bridge Loan and related accrued interest were recorded on the income statement as constructive receipt ofbreak fee for $10.0 million and forgiveness of debt of bridge loan interest for $0.8 million as of September 30, 2013, and upon the termination of the PurchaseAgreement. In connection with the termination of the Hanlong relationship, most of the provisions of the Stockholder Agreement were also terminated. Under thecontinuing provisions of the Stockholder Agreement, Hanlong’s right to designate one nominee to the Board continues until such time that Hanlong’sownership percentage falls below 10%. Currently, Hanlong owns approximately 13.0% of our outstanding common stock on a fully diluted basis. In June,2013, the Board recommended the election of Mr. Chen as a Class III member, in the Board’s slate of nominees submitted to our stockholders, pursuant to theStockholder Agreement. He was elected by a vote of the stockholders at the Company’s 2013 Annual Meeting of Stockholders for a three-year term. InAugust 2013, Mr. Chen stepped down from the LLC management committee. On October 26, 2012, we entered into an agreement with Hanlong pursuant to which Hanlong would provide us with a Subordinated Debt Facility(“Sub Debt Facility”) of up to $125.0 million to assist the Company in financing capital cost increases. 34Table of Contents Simultaneously with the execution of the Sub Debt Facility, the Company issued a warrant to Hanlong with a 2.5-year maturity to purchase ten million sharesof the Company’s common stock. On May 14, 2013, the Company and Hanlong mutually agreed to terminate the Sub Debt Facility and warrant to provide the Company with greaterflexibility in securing an additional strategic partner. As the warrant was fully vested and exercisable at the time of termination, this resulted in an $11.5million non-cash charge to the income statement for the remaining unamortized value associated with the issuance of the warrant as of June 30, 2013. Molybdenum Market Update 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. By theend of 2011, prices had pulled back to $13.30 per pound and decreased further to $11.50 per pound at the end of 2012. During 2013, molybdenum traded ina range of $9.10 per pound to $11.90 per pound, and as of late February 2014 traded at approximately $10.00 per pound according to Ryan’s Notes. Liquidity, Capital Resources and Capital Requirements Year Ended December 31, 2013 Compared to Year Ended December 31, 2012 Our total consolidated cash balance at December 31, 2013 was $21.7 million compared to $68.3 million at December 31, 2012. The decrease in ourcash balances for the year ended December 31, 2013 was due primarily to development of the Mt. Hope Project and general and administrative expendituresincurred of $53.7 million offset by the receipt of ongoing cash contributions received from POS-Minerals of $7.1 million. Deposits on property, plant andequipment relate primarily to scheduled payments for long-lead time equipment for the Mt. Hope Project; see “— Contractual Obligations” below. Themajority of funds expended were used to advance the Mt. Hope Project. The Company also established a $36.0 million reserve account in December of 2012, at the direction of the LLC management committee, which willremain until availability of the Company’s portion of financing for the Mt. Hope Project is confirmed. These funds are not available for general purposes untilthe LLC management committee authorizes a release. The cash needs for the development of the Mt. Hope Project are significant and require that we and/or the LLC arrange for financing to be combinedwith funds anticipated to be received from POS-Minerals in order to retain its 20% membership interest. The Company is working with its financial advisorsto advance the full financing of the Mt. Hope Project, and continues to pursue other potential financing sources such as strategic partners, capital markets,including equity offerings, domestic and international credit markets, and bank project financing. The Company estimates the go-forward capital required forthe Mt. Hope Project, based on 65% completed engineering, to be approximately $1,050 million, of which the Company’s 80% capital requirement is $840million. There is no assurance that the Company will be successful in raising the financing required to complete the Mt. Hope Project, or in raising additionalfinancing in the future on terms acceptable to the Company, or at all. Further, the Company does not have an estimated timeframe for finalizing any financingagreements. Total assets as of December 31, 2013 decreased to $360.7 million compared to $385.5 million as of December 31, 2012 primarily due to the write-off of capitalized debt issuance costs related to the warrants previously issued to Hanlong, costs incurred as part of the due diligence for the Term Loan, andgeneral and administrative costs incurred during 2013 which reduced cash. In order to preserve our cash liquidity, effective September 7, 2013, we implemented a cost reduction and personnel retention program, whichincluded reductions in base cash compensation for our executive officers, senior management employees and members of the Board of Directors. Cashcompensation for our Chief Executive Officer was reduced by 25%, with other senior officers and employees receiving 10 — 20% salary reductions and non-employee directors receiving a 25% decrease in cash compensation for annual retainer and meeting fees. We also approved cash and equity incentives for theexecutive officers who remain with the Company through the earliest to occur of a financing plan for the Mt. Hope Project approved by the Board of Directors,a Change of Control (as defined in the employment or change of control agreements between the Company and each of our executive officers); involuntarytermination (absent cause); or January 15, 2015 (the “Vesting Date”), and a personnel retention program providing cash and equity incentives for otheremployees who remain with the Company. Under this plan, we estimate that we will pay $1.8 million upon the earliest occurrence of the aforementionedevents. Also, in a further cost reduction effort, the number of Board of Directors was reduced effective December 31, 2013, with the retirement of three Boardmembers. 35Table of Contents Based on our commitments as of December 31, 2013, we expect to make additional payments of approximately $2.6 million under milling processequipment orders through the end of 2014 and $12.8 million in 2015. With our cash conservation plan, our non-equipment related cash requirements havedeclined to approximately $1.5 million per month. Accordingly, based on our current cash on hand and our ongoing cash conservation plan, the Companyexpects it will have adequate liquidity through the end of 2014. However, additional financing will be required to meet commitments and operating costs in2015. When financing becomes available, the additional funding will allow us to restart equipment procurement, and agreements that were suspended orterminated will be renegotiated under current market terms and conditions, as necessary. In the event of an extended delay related to availability of theCompany’s portion of full financing for the Mt. Hope Project, the Company will make its best efforts to revise procurement and construction commitments topreserve liquidity, our equipment deposits and pricing structures. Year Ended December 31, 2012 Compared to Year Ended December 31, 2011 Our total consolidated cash balance at December 31, 2012 was $68.3 million compared to $40.7 million at December 31, 2011. The increase in ourcash balances for the year ended December 31, 2012 was due primarily to the receipt of cash contributions from POS-Minerals upon the satisfaction of theROD Contribution Conditions of $100.7 million and ongoing cash contributions received from POS-Minerals of $3.1 million offset by developmentexpenditures and debt issuance costs incurred of $19.5 million, advance royalty payments of $9.5 million, general and administrative costs of $11.2million, and the creation of a reserve account at the direction of the LLC management committee of $36.0 million. Deposits on property, plant and equipmentrelate primarily to scheduled payments for long-lead time equipment for the Mt. Hope Project; see “— Contractual Obligations” below. The majority offunds expended were used to advance the Mt. Hope Project. Total assets as of December 31, 2012 increased to $385.5 million compared to 271.1 million as of December 31, 2011 primarily due to the receipt ofcapital contributions from POS-Minerals in December 2012. As discussed above under “Termination of Agreements with Hanlong (USA) Mining Investment Inc.,” we terminated our agreements with Hanlong in2013. Results of Operations Year Ended December 31, 2013 Compared to Year Ended December 31, 2012 For the year ended December 31, 2013 we had a consolidated net loss of $16.3 million compared with a net loss of $9.9 million in the same periodfor 2012. The 2013 net loss includes the constructive receipt of the Hanlong break fee for $10.0 million, write-down of warrant expense for $11.5 million,forgiveness of debt of bridge loan interest for $0.8 million, and a $6.4 million write off of debt issuance costs as discussed below. For the years ended December 31, 2013 and 2012, exploration and evaluation expenses were $0.8 million and $0.8 million, respectively, reflectingsome ongoing prefeasibility work and continuous care and maintenance expense at the Liberty property. For the years ended December 31, 2013 and 2012, general and administrative expenses, comprised largely of salaries and benefits, legal and auditfees, insurance costs, and outside contracted services, were $9.0 million and $10.6 million, respectively. The decrease in costs in 2013 compared to theprevious year relates primarily to overall decreases in consulting and legal costs as well as reduced spending on administrative costs as part of our cashconservation plan. For the years ended December 31, 2013 and 2012, write-down of warrant expense was $11.5 million and nil, respectively, as a result of the write offof loan commitment costs associated with the warrant issued to Hanlong in connection with the termination of the Sub Debt Facility. The unamortized value ofthe warrant was written off upon termination of the warrant. For the years ended December 31, 2013 and 2012, constructive receipt of break fee was $10.0 million and nil, respectively, and forgiveness of debtof bridge loan interest for $0.8 million and nil, respectively, as a result of the termination of the Hanlong relationship in August 2013. For the years ended December 31, 2013 and 2012, write off of debt issuance costs was $6.4 million and nil, respectively, as a result of thetermination of the Hanlong relationship in August 2013. For the years ended December 31, 2013 and 2012, interest income was nil as a result of low deposit interest rates on consolidated cash balances in2013 and 2012. Interest expense for the year ended December 31, 2013 and 2012 was $0.8 million and 36Table of Contents $0.5 million, respectively, as a result of interest accrued on the bridge loan outstanding during 2013 and 2012 and amortization of loan commitment costsrelated to the Hanlong warrant in 2013. Year Ended December 31, 2012 Compared to Year Ended December 31, 2011 For the year ended December 31, 2012 we had a consolidated net loss of $9.9 million compared with a net loss of $15.4 million in the same periodfor 2011. For the years ended December 31, 2012 and 2011, exploration and evaluation expenses were $0.8 million and $1.6 million, respectively. Thedecrease in costs in 2012 compared to the previous year relates to work performed at the Liberty Project to update the pre-feasibility study in 2011. No suchwork was performed in 2012. For the years ended December 31, 2012 and 2011, general and administrative expenses comprised largely of salaries and benefits, legal and auditfees, insurance costs, and outside contracted services, were $10.6 million and $10.2 million, respectively. For the year ended December 31, 2012 the increasein costs compared to the previous year was due primarily to increased salary costs and legal fees associated with documentation of the Term Loan. For the years ended December 31, 2012 and 2011, write-downs of development and deposits were nil and $3.4 million, respectively. These costswere due to forfeited long-term deposits on mining equipment with the passage of a June 30, 2011 deadline for a firm purchase order. For the years ended December 31, 2012 and 2011, interest income was nil as a result of low deposit interest rates on consolidated cash balances in2012 and 2011. Interest expense for the year ended December 31, 2012 and 2011 was $0.5 million and $0.2 million, respectively, as a result of interestaccrued on the bridge loan and amortization of expense related to the warrants issued to Hanlong in 2012. The weighted average interest rate on the bridge loanwas 2.45% and 2.42% for the years ended December 31, 2012 and 2011, respectively. Off-Balance Sheet Arrangements None. Contractual Obligations Our contractual obligations as of December 31, 2013 were as follows, based on financing expectations: Payments due by period(in millions)Contractual obligations *Total20142015 - 20162017 & BeyondOperating Lease Obligations0.30.20.1—Agricultural Sustainability Trust Contributions4.02.02.0—Equipment Purchase Contracts15.42.612.8—Advance Royalties5.20.54.7—Reclamation Surety Bonding11.61.510.1—3M Plan Contributions1.0—1.0—Total$37.5$6.8$30.7$— * With the exception of $.2 million in operating lease obligations, all amounts are commitments of the LLC, and are to be funded 80% by NevadaMoly and 20% by POS-Minerals. At December 31, 2013, the LLC has active orders in varying stages of fabrication on milling process equipment comprised of two 230kV primarytransformers and substation, a primary crusher, a SAG mill, two ball mills, and various motors for the mills. In late 2012 and early 2013, the LLC madeadditional commitments for wellfield materials and equipment, and placed purchase orders for long-lead milling process equipment including thecommitments for the engineering portion of flotation cells and roaster equipment. In 2012, the LLC issued a firm purchase order for eighteen haul trucks. The order provides for delivery of those haul trucks required to performinitial mine development, which will begin several months prior to commercial production. Non-refundable down-payments of $1.2 million were made in2012, with pricing subject to escalation as the trucks were not delivered prior to 37Table of Contents December 31, 2013. During the third quarter of 2013, the LLC renegotiated the timelines for truck delivery, accepting a 3% price increase and delayingdeliveries into late 2014. The contract is cancellable with no further liability to the LLC. Also in 2012, the LLC issued a firm purchase order for four mine production drills with a non-refundable down-payment of $0.4 million, andpricing was subject to escalation if the drills were not delivered by the end of 2013. In June of 2013, the LLC signed a change order which delayed deliveryinto the second half of 2014 and triggered a $0.2 million price increase. The contract remains cancellable with no further liability to the LLC. On June 30, 2012, the LLC’s contract to purchase two electric shovels expired. On July 11, 2012, we signed a letter of intent with the same vendorproviding for the opportunity to purchase the electric shovels at prices consistent with the expired contract, less a special discount in the amount of $3.4million to provide credit to the LLC for amounts paid as deposits under the expired contract. The letter of intent provides that equipment pricing will remainsubject to inflation indexes and guarantees production slots to ensure that the equipment is available when required by the LLC. In October 2013, the partiesagreed to extend the letter of intent through June 30, 2014. The following table sets forth the LLC’s cash commitments under mining and milling equipment contracts (collectively, “Purchase Contracts”) atDecember 31, 2013 (in millions): PeriodCash CommitmentsUnder EquipmentPurchase Contracts asof December 31, 2013 *1 Quarter 2014$.32 Quarter 20141.93 Quarter 2014.34 Quarter 2014—Total 20142.6201512.82016—2017—Total$15.4 * All amounts are commitments of the LLC, and are to be funded 80% by Nevada Moly and 20% by POS-Minerals. 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 to liability under the contracts or applicable law. The cancellation of certain key contractscould cause a delay in the commencement of operations, and could add to the cost to develop our interest in the Mt. Hope Project. Through December 31, 2013, the LLC has made deposits and/or final payments of $74.1 million on equipment orders. Of these deposits, $64.3million relate to fully fabricated items, primarily milling equipment, for which we have additional contractual commitments of $15.4 million noted in the tableabove. The remaining $9.8 million reflects both partially fabricated milling equipment, and non-refundable deposits on mining equipment. As discussedabove, the mining equipment agreements remain cancellable with no further liability to the LLC. The underlying value and recoverability of the amountsshown as deposits on project property, plant and equipment in our consolidated balance sheets are dependent on our ability to fund development activities thatwould lead to profitable production and positive cash flow from operations, or proceeds from the disposition of these assets. There can be no assurance that wewill be successful in generating future profitable operations, disposing of these assets or securing additional funding in the future on terms acceptable to us orat all. Our audited consolidated financial statements do not include any adjustments relating to recoverability and classification of recorded assets orliabilities. Obligations under capital and operating leases We have contractual obligations under operating leases that will require a total of $0.3 million in payments over the next three years. Operating leasesconsist primarily of rents on office facilities and office equipment. Our expected payments are $0.2 million, $0.1 million, and nil for the years endedDecember 31, 2014, 2015 and 2016, respectively. 38stndrdthTable of Contents 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 to be probable, and assuch $4.0 million is accrued in the Company’s December 31, 2013, 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 was required to obtain approval from the U.S. Bureau of Land Management (“BLM”) to implement the Mt. HopeProject Plan of Operations (“PoO”). This approval, in the form of a Record of Decision (“ROD”) was obtained only after successful completion of the processof environmental evaluation, which incorporates substantial public comment. The LLC was also required to obtain various state and federal permitsincluding, but not limited to, water protection, air quality, water rights and reclamation permits. In addition to requiring permits for the development of theMt. Hope Project, we will need to obtain and modify various mining and environmental permits during the life of the Mt. Hope Project. Maintaining,modifying, and renewing the necessary governmental permits is a complex and time-consuming process involving numerous jurisdictions and often involvingpublic hearings and substantial expenditures. The duration and success of the LLC’s efforts to obtain, modify or renew permits will be contingent uponmany variables, some of which are not within the LLC’s control. Increased costs or delays could occur, depending on the nature of the activity to be permittedand the interpretation of applicable requirements implemented by the permitting authority. All necessary permits may not be obtained and, if obtained, maynot be renewed, or the costs involved in each case may exceed those that we previously estimated. In addition, it is possible that compliance with such permitsmay result in additional costs and delays. On November 16, 2012, the BLM issued its ROD authorizing development of the Mt. Hope Project. The ROD approves the PoO for constructionand operation of the mining and processing facilities and also grants the Rights-of-Way for a 230 kV power transmission line, discussed below. Monitoringand mitigation measures identified in the ROD developed in collaboration with the regulatory agencies involved throughout the permitting process will avoid,minimize, and mitigate environmental impacts, and reflect the Company’s commitment to operate the Mt. Hope Project to the highest environmental standards. On February 15, 2013, Great Basin Resource Watch and the Western Shoshone Defense Project (“Plaintiffs”) filed a Complaint against the U.S.Department of the Interior and the BLM in the U.S. District Court, District of Nevada, seeking relief under the National Environmental Policy Act (“NEPA”)and other federal laws challenging the BLM’s issuance of the ROD for the Mt. Hope Project, and on February 20, 2013 filed a Motion for PreliminaryInjunction. The Court allowed the LLC to intervene in the matter. On August 22, 2013, the Court denied, without prejudice, the Motion for Preliminary Injunction based on the parties’ Joint Stipulation to ContinuePreliminary Injunction Oral Argument, which advised the Court that as a result of current economic conditions, including the Company’s ongoing financingefforts, all major ground disturbing activities had ceased at the Mt. Hope Project. The Court’s “without prejudice” ruling means that upon the Company’sdecision to recommence significant ground-disturbing activities which were approved by the ROD, sixty days advance notice will be provided to Plaintiffs, orif Plaintiffs believe the scope of minor ongoing approved site activities exceeds the stipulated agreement, then Plaintiffs may elect to re-file their Motion forPreliminary Injunction at that time. The parties and the Court have agreed to address the Plaintiffs’ claims under the pending Complaint based on theadministrative record and the parties’ motion for summary judgment briefing on the merits. Briefing by the parties and probable oral argument is anticipatedto be completed in the second quarter of 2014. The Mt. Hope Project underwent exhaustive environmental analysis and review that lasted more than 6 years. The process to complete the finalEnvironmental Impact Statement (“EIS”) included extensive public and cooperating agency input (including the BLM, the National Park Service, the U.S.Environmental Protection Agency, the Nevada Division of Wildlife and the County of Eureka). The Company supports the work completed by the BLM andbelieves that the ROD complies will all federal statutes and rules, and is very robust and defensible. 39Table of Contents Water Rights Considerations The Nevada State Engineer (“State Engineer”) has issued all water permits for the Mt. Hope Project. Eureka County, Nevada and two other partiescomprised of three individual water rights holders in Diamond Valley and one in Kobeh Valley filed an appeal in July 2012 to the Nevada Supreme Courtchallenging the granting of water permits by the State Engineer. On June 26, 2013, the appeal was consolidated with a similar appeal of the State Engineer’sapproval of the LLC’s Monitoring, Management and Mitigation Plan (“3M Plan”), discussed below, and remains pending before the Nevada Supreme Court. Two individual water rights holders appealed the State Engineer’s approval of the Company’s 3M Plan to the Nevada State District Court (“DistrictCourt”). Following oral argument on April 15, 2013, the District Court denied the Petition for Judicial Review of the 3M Plan and issued its Written Order onMay 17, 2013. Thereafter, Petitioners filed an appeal on May 20, 2013 of the District’s Court Order to the Nevada Supreme Court, which, as discussedabove, has been consolidated with the appeal of the water permits. We remain confident the Nevada Supreme Court will uphold the District Court’s Orders regarding the 3M Plan and the water permits. We expect theCourt to set the date for oral arguments for the second quarter of 2014, before the full panel of Justices. Notwithstanding the above, subject to the ongoing Nevada Supreme Court consolidated appeal, the Company’s water permits have been granted andthe water remains available to the Company, as described above, for use at the Mt. Hope Project. 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 accounting principles generally accepted in the United States of America (“GAAP”)requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses. Such estimates primarily relate to unsettledtransactions 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. At December 31, 2013 and 2012, we had deferred tax assetsprincipally arising from net operating loss carryforwards for income tax purposes multiplied by an expected rate of 35%. As management of the Companycannot determine that it is more likely than not that we will realize the benefit of the deferred tax assets, a valuation allowance equal to the net deferred tax assethas been established. Mining Properties, Land and Water Rights 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 40Table of Contents the award and is recognized as expense over the vesting period. Determining the fair value of share-based awards at the grant date requires judgment; includingestimating the expected term of the award, volatility of the underlying equity and estimating the amount of share-based awards that are expected to be forfeited. If actual results associated with share-based awards that are forfeited differ significantly from these estimates, stock-based compensation expense and ourresults of operations could be materially impacted. Debt Issuance and Loan Commitment Costs The Company capitalized certain costs such as technical due diligence and related legal fees in the amount of $6.4 million. Such costs were incurredin direct pursuit of the Term Loan based on our belief that it was probable that the Company would receive the Term Loan in 2013. The Company wrote offall debt issuance costs previously recorded, as these costs were specifically related to Hanlong’s obligation to arrange the Term Loan. This obligation wasreleased upon the termination of the Purchase Agreement in August 2013. In addition, the $12.4 million value placed on the warrant issued to Hanlong in connection with the Sub Debt Facility (terminated in May 2013) wasconsidered a loan commitment fee. These costs were to be amortized over the life of the Sub Debt Facility using the straight line method from the date the loanagreement was effective. The termination of the Sub Debt Facility resulted in a non-cash charge to the income statement in the amount of $11.5 million for theremaining unamortized value associated with the warrants. Contingently Redeemable Noncontrolling Interest (“CRNCI”) 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 — “Description of Business” to the audited financialstatements included in Item 8 of this document, the LLC Agreement permits POS-Minerals the option to put its interest in the LLC to Nevada Moly upon achange of control, as defined in the LLC Agreement, followed by a failure to use standard mining industry practice in connection with development andoperation of the Mt. Hope Project as contemplated by the parties for a period of 12 consecutive months. As such, the CRNCI has continued to be shown as aseparate caption between liabilities and equity (mezzanine section). The carrying value of the CRNCI includes $36 million that will be returned to POS-Minerals contingent upon the achievement of commercial production at the Mt. Hope Project as stipulated in the LLC Agreement. The expected return of capitalto POS-Minerals is carried at redemption value as we believe redemption of this amount is probable. The remaining carrying value of the CRNCI has not beenadjusted to its redemption value as the contingencies that may allow POS-Minerals to require redemption of its noncontrolling interest are not probable ofoccurring. Under GAAP, until such time as that contingency has been eliminated and redemption is no longer contingent upon anything other than the passageof time, no adjustment to the CRNCI balance should be made. Future changes in the redemption value will be recognized immediately as they occur and theCompany will adjust the carrying amount of the CRNCI to equal the redemption value at the end of each reporting period. 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. See “Management’s Discussion and Analysis of Financial Conditionand Results of Operation — Molybdenum Market Update” for a discussion of molybdenum prices. 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. 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 specialty steelsbusinesses from its carbon steel and mining businesses to APERAM, a separate entity incorporated in the Grand Duchy of Luxembourg. This transferincluded the supply agreement the Company had in place with ArcelorMittal and the shares of the Company’s common stock previously owned byArcelorMittal. 41Table of Contents 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 APERAM supply agreement, the supply agreement with SeAH Besteelprovides 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 had not begun by January 1, 2013. The described option is available up to ten days following theachievement of certain production levels at the Mt. Hope Project. As commercial production at the Mt. Hope Project has not commenced, Sojitz currently hasthe option to cancel its contract or participate in the molybdenum supply agreement as described above. On March 4, 2010, the Company entered into a molybdenum supply agreement (“Hanlong Off-Take Agreement”) with China Han Long MiningDevelopment Ltd and guaranteed by Hanlong (collectively “Hanlong Mining”). Subject to Hanlong’s making the Term Loan available to the Company underthe Purchase Agreement, as discussed above, the Hanlong Agreement required Hanlong Mining to purchase the Company’s entire share of the Mt. Hopemolybdenum production above that necessary for the Company to meet its existing supply commitments until the expiration of those commitments. Asdiscussed above, with the termination of the Purchase Agreement and other agreements associated with the Hanlong Transaction, Hanlong will not be able tomeet its commitments and obligations and the Company will not be required to provide Hanlong Mining with molybdenum under the Hanlong Off-TakeAgreement. The three remaining long-term supply agreements provide for supply only after commercial production levels are achieved, and no provisions requirethe Company to deliver product or make any payments if commercial production is never achieved or declines in later periods and have floor prices rangingfrom $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 remain as contractual obligations and have take-or-pay provisions that require the buyers to either take deliveryof product made available by the Company, or to pay as though they had taken delivery pursuant to the term of the agreements. In the event that our contractparties choose not to honor their contractual obligations, our profitability may be adversely impacted. We may be unable to sell any product our contractparties fail to purchase in a timely manner, at comparable prices, or at all. 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, 2013, we had a balance of cash and cash equivalents of $21.7 million and restricted cash of $54.4 million. Interest rates onshort term, highly liquid investments have not changed materially since December 31, 2010, and continue to be 1% or less on an annualized basis. 42Table of Contents ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA GENERAL MOLY, INC.(A Development Stage Company) CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2013 CONTENTS Report of Independent Registered Public Accounting Firm44 Financial Statements: Consolidated Balance Sheets as of December 31, 2013 and December 31, 201245 Consolidated Statements of Operations and Comprehensive Loss for the twelve months ended December 31, 2013, December 31, 2012 andDecember 31, 2011 and for the period from inception of Exploration Stage until December 31, 201346 Consolidated Statements of Cash Flows for the twelve months ended December 31, 2013, December 31, 2012 and December 31, 2011 and for theperiod from inception of Exploration Stage until December 31, 201347 Consolidated Statements of Equity as of December 31, 2013, December 31, 2012, December 31, 2011, December 31, 2010, and January 1, 2002(inception of Exploration Stage)49 Notes to Consolidated Financial Statements51 43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 and comprehensive loss, cashflows and equity present fairly, in all material respects, the financial position of General Moly, Inc. and its subsidiaries (a development stage company) atDecember 31, 2013 and 2012, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2013 and,cumulatively, for the period from January 1, 2002 (date of inception) to December 31, 2013 in conformity with accounting principles generally accepted in theUnited States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as ofDecember 31, 2013, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of theTreadway Commission (COSO). The Company’s management is responsible for these consolidated financial statements, for maintaining effective internalcontrol over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Item 9A: Report ofManagement on internal control over financial reporting. Our responsibility is to express opinions on these consolidated financial statements and on theCompany’s Internal Control over Financial Reporting based on our integrated audits. We conducted our audits in accordance with the standards of the PublicCompany Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance aboutwhether the consolidated financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained inall material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts anddisclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluatingthe overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control overfinancial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal controlbased on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that ouraudits provide a reasonable basis for 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. As discussed in Note 2 “Liquidity” to the consolidated financial statements, the ability of the Company to implement its current business plan isdependent upon the Company obtaining additional financing. /s/PricewaterhouseCoopers LLP Denver, Colorado March 13, 2014 44Table of Contents GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED BALANCE SHEETS (In thousands, except par value amounts) December 31,2013December 31,2012ASSETS:CURRENT ASSETSCash and cash equivalents$21,685$68,331Deposits, prepaid expenses and other current assets625136Total Current Assets22,31068,467Mining properties, land and water rights206,251170,967Deposits on project property, plant and equipment74,10869,691Restricted cash held at EMLLC36,00036,000Restricted cash held for electricity transmission12,02012,013Restricted cash held for reclamation bonds6,3326,991Non-mining property and equipment, net669605Capitalized debt issuance and loan commitment costs—17,794Other assets2,9942,994TOTAL ASSETS$360,684$385,522LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST, ANDEQUITY:CURRENT LIABILITIESAccounts payable and accrued liabilities$4,691$10,133Accrued advance royalties500500Accrued payments to Agricultural Sustainability Trust and Hanlong2,0004,000Current portion of long term debt26310,906Total Current Liabilities7,45425,539Provision for post closure reclamation and remediation costs1,318627Deferred gain—1,100Accrued advance royalties4,7004,700Accrued payments to Agricultural Sustainability Trust2,0002,000Long term debt, net of current portion538661Other accrued liabilities875875Total Liabilities16,88535,502 COMMITMENTS AND CONTINGENCIES CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST209,007201,880 EQUITYCommon stock, $0.001 par value; 200,000,000 shares authorized, 91,761,249 and 91,333,092 shares issuedand outstanding, respectively9291Additional paid-in capital273,857270,902Accumulated deficit before exploration stage(213)(213)Accumulated deficit during exploration and development stage(138,944)(122,640)Total Equity134,792148,140TOTAL LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST,AND EQUITY$360,684$385,522 The accompanying notes are an integral part of these consolidated financial statements. 45Table of Contents GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except per share amounts) Years EndedJanuary 1, 2002(Inception ofExploration Stage)toDecember 31,2013December 31,2012December 31,2011December 31,2013REVENUES$—$—$—$— OPERATING EXPENSES:Exploration and evaluation7727781,56841,251Write-downs of development and deposits——3,4038,819General and administrative expense8,98510,60010,24889,360TOTAL OPERATING EXPENSES9,75711,37815,219139,430 LOSS FROM OPERATIONS(9,757)(11,378)(15,219)(139,430) OTHER INCOME/(EXPENSE):Interest and dividend income26214,070Interest expense(753)(548)(250)(1,715)Write-off of loan commitment fees (warrant)(11,472)——(11,472)Gain on forgiveness of debt804——804Constructive receipt of break fee10,000——10,000Write-off of debt issuance costs(6,420)——(6,420)Realized gain from sale of mining properties1,2922,000—3,292TOTAL OTHER (EXPENSE)/INCOME, NET(6,547)1,458(229)(1,441) LOSS BEFORE INCOME TAXES(16,304)(9,920)(15,448)(140,871) Income Taxes———— CONSOLIDATED NET LOSS$(16,304)$(9,920)$(15,448)$(140,871)Less: Net loss attributable to contingentlyredeemable noncontrolling interest——6801,927NET LOSS ATTRIBUTABLE TO GENERALMOLY, INC.$(16,304)$(9,920)$(14,768)$(138,944)Basic and diluted net loss attributable to General Moly pershare of common stock$(0.18)$(0.11)$(0.16)Weighted average number of shares outstanding— basic anddiluted91,56891,23090,588 COMPREHENSIVE LOSS$(16,304)$(9,920)$(14,768)$(138,944) The accompanying notes are an integral part of these consolidated financial statements. 46Table of Contents GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Years EndedJanuary 1, 2002(Inception ofExploration Stage)toDecember 31,2013December 31,2012December 31,2011December 31,2013CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(16,304)$(9,920)$(15,448)$(140,871)Adjustments to reconcile net loss to net cash used by operatingactivities:Depreciation and amortization3413104122,295Interest expense7535482501,715Stock-based compensation for employees and directors1,8291,4141,71320,055(Increase) decrease in deposits, prepaid expenses and other(489)(31)43(533)Decrease in accounts payable and accrued liabilities(8,170)(3,569)(10,761)(19,042)Increase in restricted cash held for electricity transmission(7)(8)—(12,020)Increase in post closure reclamation and remediation costs69140161,109Write-off of loan commitment fees (warrant)11,472——11,472Write-off of debt issuance costs6,420——6,420Constructive receipt of break fee(10,000)——(10,000)Forgiveness of debt (interest on bridge loan)(804)——(804)Realized gain related to sale of mining properties(1,292)(2,000)—(3,292)Writedowns of development and deposits——3,4038,819Services and expenses paid with common stock———1,990Warrant repricing———965Net cash used by operating activities(15,560)(13,216)(20,372)(131,722) CASH FLOWS FROM INVESTING ACTIVITIES:Purchase and development of mining properties, land andwater rights(35,280)(20,762)(10,567)(176,864)(Deposits)/refunds on property, plant and equipment(3,689)(2,158)177(73,754)Proceeds from option to purchase agreement1,0001,9509354,100Decrease (increase) in restricted cash held for reclamationbonds659(5,858)—(5,841)Increase in restricted cash — EMLLC—(36,000)—(36,000)Cash provided by sale of marketable securities———109Net cash used by investing activities(37,310)(62,828)(9,455)(288,250) 47Table of Contents GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Years EndedJanuary 1, 2002(Inception ofExploration Stage)toDecember 31,2013December 31,2012December 31,2011December 31,2013CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of stock, net of issuance costs4958319,412228,351Cash proceeds from POS-Minerals Corp.7,127103,807—210,934Decrease in leased assets, net(250)(142)(198)(260)Increase in capitalized debt issuance costs(702)(582)(2,249)(4,420)Proceeds from debt———10,000Cash paid to POS-Minerals Corp. for purchaseprice adjustment———(2,994)Net cash provided by financing activities:6,224103,66616,965441,611(Decrease) increase in cash and cash equivalents, net(46,646)27,622(12,862)21,639Cash and cash equivalents, beginning of period68,33140,70953,57146Cash and cash equivalents, end of period$21,685$68,331$40,709$21,685 NON-CASH INVESTING AND FINANCING ACTIVITIES:Equity compensation capitalized as development$1,078$639$258$8,175Accrued portion of advance royalties—5,200—5,200Accrued portion of payments to the AgriculturalSustainability Trust and Hanlong—2,000—4,000Installment purchase of equipment and land139730—139Accrued portion of deposits on property, plantand equipment7281,0591,691728Loan commitment costs—12,076——Post closure reclamation and remediation costs, reclamationbond, and accounts payable assumed in an acquisition———754Common stock and warrants issued for propertyand equipment———1,586 The accompanying notes are an integral part of these consolidated financial statements 48Table of Contents GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF EQUITY (In thousands, except number of shares and per share amounts) CommonSharesAmountAdditionalPaid-In CapitalAccumulatedOtherComprehensiveIncome (Loss)AccumulatedDeficitTotalBalance, January 1, 20023,140,469$4$442$(2)$(213)$231Issuance of Units of Common Stock andWarrants:For directors’ fees460,000—79——79Issued pursuant to stock awards641,142—448——448For cash between $0.15 and $8.50 pershare54,504,40554172,522——172,576Purchase options for management andadministrative fees——11——11For services, administration,mineral rights, water rights, propertyand expenses at between $0.11 and$6.15 per share2,527,37923,374——3,376For exercise of warrants for cash435,000—348——348Units and warrants for finders’ fee170,550—2,042——2,042Cost of offerings including cash costsof $3,783——(5,815)——(5,815)Stock Options:Exercised between $0.11 and $6.93 pershare3,621,46341,826——1,830Cashless exercise of stock options1,672,7212(2)———Issued pursuant to stock awards831,3472(38)——(36)Returned due to pricing errors on stockoption exercise(38,998)—————Stock based compensation——20,666——20,666Stock Warrants:Issued for services at $1.07 per warrant——80——80Exercised between $0.40 and $5.20 pershare15,349,7671537,072——37,087Cashless exercise of warrants2,038,2282(2)———Repricing of warrants——965——965Unrealized Losses on marketablesecurities———2—2Additional paid in capital fromshareholder——499——499Net loss for the years ended December 31,2002 through 2010————(97,952)(97,952)Balances, December 31, 201085,353,47385234,517—(98,165)136,437 49Table of Contents GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF EQUITY (In thousands, except number of shares and per share amounts) CommonSharesAmountAdditionalPaid-In CapitalAccumulatedOtherComprehensiveIncome (Loss)AccumulatedDeficitTotalStock Warrants:Exercised between $3.66 and $3.75per 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 $4.35per share53,511—————Issuance of Units of Common Stock :Issued pursuant to stock awards70,1751(1)———Net loss for the year endedDecember 31, 2011————(14,768)(14,768)Balances, December 31, 201190,818,248$91$255,894$—$(112,933)$143,052Stock Options:Exercised at $2.80 per share50,971—125——125Cashless exercise of stock options212,280—458——458Stock-based compensation——2,053——2,053Stock Warrants:Loan Commitment Fees——12,372——12,372Issuance of Units of Common Stock :Issued pursuant to stock awards251,593—————Net loss for the year endedDecember 31, 2012————(9,920)(9,920)Balances, December 31, 201291,333,092$91$270,902$—$(122,853)$148,140Stock Options:Exercised at $2.41 per share20,000—48——48Cashless exercise of stock option46,165—————Stock-based compensation——2,907——2,907Issuance of Units of Common Stock:Issued pursuant to stock awards361,9921———1Net loss for the year endedDecember 31, 2013————(16,304)(16,304)Balances, December 31, 201391,761,249$92$273,857$—$(139,157)$134,792 The accompanying notes are an integral part of these consolidated financial statements. 50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 and copperproperty (“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 ourinterest in the assets related to the Mt. Hope Project, including our lease of the Mt. Hope Project, into Eureka Moly, LLC (“the LLC”), and in February 2008entered into an agreement (“LLC Agreement”) for the development and operation of the Mt. Hope Project with POS-Minerals Corporation (“POS-Minerals”). Under the LLC Agreement, POS-Minerals owns a 20% interest in the LLC and General Moly, through Nevada Moly, LLC (“Nevada Moly”), a wholly-ownedsubsidiary, owns an 80% interest. The ownership interests and/or required capital 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 capital contributions to the LLC totaling $100.0 million duringthe year ended December 31, 2008 (“Initial Contributions”). Additional amounts of $100.7 million were received from POS-Minerals in December 2012,following receipt of major operating permits for the Mt. Hope Project, including the Record of Decision (“ROD”) from the U.S. Bureau of Land Management(“BLM”). In addition, as commercial production at the Mt. Hope Project was not achieved by December 31, 2011, the LLC will be required to return to POS-Minerals $36.0 million of its capital contributions, with no corresponding reduction in POS-Minerals’ ownership percentage. This return of contributionspayment is contingent upon the commencement of commercial production, as defined in the LLC Agreement, and will be due 20 days thereafter. Based on ourcurrent plan, subject to availability of full financing for construction of the Mt. Hope Project, we anticipate commercial production will be achieved following a20 — 24 month construction period. Nevada Moly is obligated under the terms of the LLC Agreement to make capital contributions to the LLC to fund thereturn of contributions to POS-Minerals upon achievement of commercial production (i.e. when the contingency is resolved). If Nevada Moly does not fundtheir additional capital contribution in order for the LLC to return to POS-Minerals $36 million of its total capital contributions, POS-Minerals has an electionto either make a secured loan to the LLC to fund the return of contributions, or receive an additional interest in the LLC of approximately 5%. In the lattercase, Nevada Moly’s interest in the LLC is subject to dilution by a percentage equal to the ratio of 1.5 times the amount of the unpaid return of contributionsover the aggregate amount of deemed capital contributions (as determined under the LLC Agreement) of both parties to the LLC (“Dilution Formula”). AtDecember 31, 2013, the aggregate amount of deemed capital contributions of both parties was $1,063.5 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 the development andoperation of the Mt. Hope Project as contemplated by the parties for a period of twelve consecutive months. If POS-Minerals puts its interest, Nevada Moly orits transferee or surviving entity would be required to purchase the interest for 120% of POS-Minerals’ total contributions to the LLC, which, if not paidtimely, would be subject to 10% interest per annum. Beginning in November 2012, the Company and POS-Minerals had begun making monthly pro rata capital contributions to the LLC to fund costsincurred as required by the LLC Agreement. The interest of a party in the LLC that does not make its monthly pro rata capital contributions to fund costsincurred is subject to dilution based on the Dilution Formula. The Company and POS-Minerals consented, effective July 1, 2013, to Nevada Moly acceptingfinancial responsibility for POS-Minerals’ 20% interest in costs 51Table of Contents related to Nevada Moly’s compensation and reimbursement as Manager of the LLC, and certain owners’ costs associated with Nevada Moly’s ongoingprogress to complete project financing for its 80% interest, resulting in approximately $3.0 million to be paid by Nevada Moly on behalf of POS-Mineralsduring the term of the consensual agreement, which will be in place until the earlier of completion of Nevada Moly’s financing efforts or June 30, 2014. POS-Minerals remains obligated to contribute its 20% interest in all other costs incurred by the LLC. Other than those costs noted, through December 31, 2013 andto date through 2014, all required monthly contributions have been made by both parties. Termination of Agreements with Hanlong (USA) Mining Investment Inc. In March 2010, we signed a series of agreements with Hanlong (USA) Mining Investment, Inc. (“Hanlong”), an affiliate of Sichuan Hanlong Group,a privately held Chinese company. The agreements formed the basis of a $745 million transaction that was intended to provide the Company with adequatecapital to contribute its 80% share of costs to develop the Mt. Hope Project. The agreements included: (a) a Securities Purchase Agreement (the “PurchaseAgreement”) that provided for the sale to Hanlong of shares of our common stock in two tranches that would have aggregated 25% of our outstanding stock ona fully diluted basis for $80 million ($40 million per tranche), conditioned upon us receiving permits for the Mt. Hope Project and Hanlong’s obligation to usecommercially reasonable efforts to procure a $665 million loan from a Prime Chinese Bank (“Term Loan”) for our use in constructing the Mt. Hope Project;(b) a Stockholder Agreement that provided Hanlong representation on our Board of Directors (“Board”) and provided Hanlong representation on the LLCmanagement committee, governed how Hanlong would vote its shares of the Company and limited Hanlong’s ability to purchase or dispose of our securities;(c) a Bridge Loan whereby Hanlong provided $10 million to the Company to preserve liquidity until permits were received and the Term Loan was available;and (d) a long-term molybdenum supply off-take agreement (discussed further in Item 3 below) which required Hanlong to purchase the Company’s entireshare of the Mt. Hope Project’s molybdenum production above that necessary for the Company to meet its pre-existing supply commitments until the expirationof those commitments (collectively, the “Hanlong Transaction”). Pursuant to the Purchase Agreement, on December 20, 2010, we closed on the first trancheand issued 11,843,341 shares of common stock to Hanlong for a purchase price of $40 million, or approximately $3.38 per share. We granted Hanlongregistration rights with respect to those shares. The Company filed a Registration Statement on Form S-3 in December 2013, which, among other transactionsincluded registration of the Hanlong shares, thereby allowing Hanlong to sell their shares to a third party. The registration statement was declared effective onJanuary 29, 2014. After the closing of the first tranche, Hanlong became entitled to nominate one director to serve on our Board and one representative to theLLC management committee. Nelson Chen was designated by Hanlong to serve in both of these capacities. On March 20, 2013, the Company was notified that China Development Bank (“CDB”) had suspended work on the Term Loan. This suspensionrelates to reports that Mr. Liu Han, Chairman of Hanlong had been detained by Chinese authorities. In August 2013, the Company terminated its ongoing relationship with Hanlong. The Purchase Agreement provided that it could be terminated byeither party (providing the terminating party was not in default) if the closing of the second tranche had not occurred on or before the earlier of December 31,2012 or August 16, 2013 (the date which is nine months after the issuance of the ROD). In August 2013, the Company notified Hanlong that it wasterminating the Purchase Agreement as Hanlong had not met its commitments under the agreement. Hanlong acknowledged and consented to the termination. As a result of the termination of the Purchase Agreement, Hanlong was obligated to pay the Company a break fee of $10.0 million because Hanlongfailed to arrange the Term Loan within the above described deadline. The Company and Hanlong have agreed to offset the break fee against the repayment ofthe Bridge Loan. The outstanding balance of the Bridge Loan and related accrued interest were recorded on the income statement as constructive receipt ofbreak fee for $10.0 million and forgiveness of debt of bridge loan interest for $0.8 million as of September 30, 2013, and upon the termination of the PurchaseAgreement. In connection with the termination of the Hanlong relationship, most of the provisions of the Stockholder Agreement were also terminated. Under thecontinuing provisions of the Stockholder Agreement, Hanlong’s right to designate one nominee to the Board continues until such time that Hanlong’sownership percentage falls below 10%. Currently, Hanlong owns approximately 13.0% of our outstanding common stock on a fully diluted basis. In June,2013, the Board recommended the election of Mr. Chen as a Class III member, in the Board’s slate of nominees submitted to our stockholders, pursuant to theStockholder Agreement. He was elected by a vote of the stockholders at the Company’s 2013 Annual Meeting of Stockholders for a three-year term. InAugust 2013, Mr. Chen stepped down from the LLC management committee. On October 26, 2012, we entered into an agreement with Hanlong pursuant to which Hanlong would provide us with a Subordinated Debt Facility(“Sub Debt Facility”) of up to $125.0 million to assist the Company in financing capital cost increases. Simultaneously with the execution of the Sub DebtFacility, the Company issued a warrant to Hanlong with a 2.5-year maturity to purchase ten million shares of the Company’s common stock. 52Table of Contents On May 14, 2013, the Company and Hanlong mutually agreed to terminate the Sub Debt Facility and warrant to provide the Company with greaterflexibility in securing an additional strategic partner. As the warrant was fully vested and exercisable at the time of termination, this resulted in an $11.5million non-cash charge to the income statement for the remaining unamortized value associated with the issuance of the warrant as of June 30, 2013. NOTE 2 — LIQUIDITY Our consolidated cash balance at December 31, 2013, was $21.7 million compared to $68.3 million at December 31, 2012, with the decreaseprimarily attributed to development of the Mt. Hope Project and general and administrative expenses. The cash needs for the development of the Mt. Hope Project are significant and require that we and/or the LLC arrange for financing to be combinedwith funds anticipated to be received from POS-Minerals in order to retain its 20% membership interest. If we are unsuccessful in obtaining financing, we willnot be able to proceed with the development of the Mt. Hope Project. The Company is working with its financial advisors to advance the full financing of the Mt. Hope Project, and continues to pursue other potentialfinancing sources such as strategic partners, capital markets, including equity offerings, domestic and international credit markets, and bank projectfinancing. There is no assurance that the Company will be successful in raising the financing required to complete the Mt. Hope Project, or in raisingadditional financing in the future on terms acceptable to the Company, or at all. Further, the Company does not have an estimated timeframe for finalizingany financing agreements. In order to preserve our cash liquidity, effective September 7, 2013, we implemented a cost reduction and personnel retention program, whichincluded reductions in base cash compensation for our executive officers, senior management employees and members of the Board of Directors. Cashcompensation for our Chief Executive Officer was reduced by 25%, with other senior officers and employees receiving 10 — 20% salary reductions and non-employee directors receiving a 25% decrease in cash compensation for annual retainer and meeting fees. We also approved cash and equity incentives for theexecutive officers who remain with the Company through the earliest to occur of a financing plan for the Mt. Hope Project approved by the Board of Directors,a Change of Control (as defined in the employment or change of control agreements between the Company and each of our executive officers); involuntarytermination (absent cause); or January 15, 2015 (the “Vesting Date”), and a personnel retention program providing cash and equity incentives for otheremployees who remain with the Company. Under this plan, we estimate that we will pay $1.8 million upon the earliest of occurrence of the aforementionedevents. Also, in a further cost reduction effort, the number of Board of Directors was reduced effective December 31, 2013, with the retirement of three Boardmembers. We also continue to work with our long-lead vendors to defer timing of contractual payments for mining and milling equipment in order to preservecurrent liquidity The following table sets forth the LLC’s cash commitments under these equipment contracts (collectively, “Purchase Contracts”) atDecember 31, 2013 (in millions): YearAs ofDecember 31,2013 *2014$2.6201512.8Total$15.4 * All amounts are commitments of the LLC, and are to be funded 80% by Nevada Moly and 20% by POS-Minerals. If the Company does not make payments contractually required under these purchase contracts, it could be subject to claims for breach of contractor to cancellation of the purchase contract. In addition, we may proceed to selectively suspend, cancel or attempt to renegotiate additional purchase contracts ifwe are forced to further conserve cash. If we cancel or breach any contracts, we will take all appropriate action to minimize any losses, but could be subject toliability under the contracts or applicable law. The cancellation of certain key contracts could cause a delay in the commencement of operations, and couldadd to the cost to develop our interest in the Mt. Hope Project. Through December 31, 2013, the LLC has made deposits and/or final payments of $74.1 million on equipment orders. Of these deposits, $64.3million relate to fully fabricated items, primarily milling equipment, for which we have additional contractual commitments of $15.4 million noted in the tableabove. The remaining $9.8 million reflects both partially fabricated milling equipment, and non-refundable deposits on mining equipment. As discussed inNote 11, the mining equipment agreements remain cancellable with no further liability to the LLC. The underlying value and recoverability of these deposits inour consolidated balance sheets are dependent on our ability to fund development activities that would lead to profitable production and positive cash flowfrom 53Table of Contents operations, or proceeds from the disposition of these assets. There can be no assurance that we will be successful in generating future profitable operations,disposing of these assets or securing additional funding in the future on terms acceptable to us or at all. Our audited consolidated financial statements do notinclude any adjustments relating to recoverability and classification of recorded assets or liabilities. Refer to Note 11 for more information related to thesedeposits and/or final payments on equipment orders. The Company established a $36.0 million reserve account in December of 2012, at the direction of the LLC management committee, which willremain until availability of the Company’s portion of financing for the Mt. Hope Project is confirmed. These funds are not available for general purposes untilthe LLC management committee, consisting of equal representation from the Company and POS-Minerals, authorizes a release. Based on our commitments as of December 31, 2013, we expect to make additional payments to Mount Hope Mines Inc. of $0.5 million andreclamation bonding costs of $1.5 million through the end of 2014. With our cash conservation plan, our non-equipment related cash requirements havedeclined to approximately $1.5 million per month. Accordingly, based on our current cash on hand and our ongoing cash conservation plan, the Companyexpects it will have adequate liquidity through the end of 2014. However, additional financing will be required to meet commitments and operating costs in2015. 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 LLC 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. The net loss attributable to contingently redeemablenoncontrolling interest is reflected separately on the Consolidated Statement of Operations. Contingently Redeemable Noncontrolling Interest (“CRNCI”) 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 — “Description of Business”, the LLC Agreementpermits POS-Minerals the option to put its interest in the LLC to Nevada Moly upon a change of control, as defined in the LLC Agreement, followed by afailure to use standard mining industry practice in connection with development and operation of the Mt. Hope Project as contemplated by the parties for aperiod of 12 consecutive months. As such, the CRNCI has continued to be shown as a separate caption between liabilities and equity. The carrying value ofthe CRNCI includes $36 million that will be returned to POS-Minerals contingent upon the achievement of commercial production at the Mt. Hope Project asstipulated in the LLC Agreement. The expected return of capital to POS-Minerals is carried at redemption value as we believe redemption of this amount isprobable. The remaining carrying value of the CRNCI has not been adjusted to its redemption value as the contingencies that may allow POS-Minerals torequire redemption of its noncontrolling interest are not probable of occurring. Under GAAP, until such time as that contingency has been eliminated andredemption is no longer contingent upon anything other than the passage of time, no adjustment to the CRNCI balance should be made. Future changes in theredemption value will be recognized immediately as they occur and the Company will adjust the carrying amount of the CRNCI to equal the redemption valueat the end of each reporting period. 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. 54Table of Contents Cash and Cash Equivalents and Restricted Cash 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. We consider all restricted cash to be long-term. In December 2012, the Company established a reserve account at the direction of the LLCmanagement committee in the amount of $36.0 million, which will remain until availability of the Company’s portion of financing for the Mt. Hope Project isconfirmed. These funds are not available for general purposes until the management committee authorizes a release. 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 and we then entered into the development stage. We have not realized any revenue from operations. We will be primarily engaged in development of the Mt. Hope Project and exploration and evaluation of the Liberty Project until we enter the production stage ofthe 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 awards as of December 31, 2013, 2012, and 2011, respectively, were as follows: December 31, 2013December 31, 2012December 31, 2011Warrants1,000,00011,000,0001,000,000Stock Options544,9991,266,6582,484,990Unvested Stock Awards2,280,8901,136,223615,763Stock Appreciation Rights2,096,6531,639,6311,290,499 These awards were not included in the computation of diluted loss per share for the twelve months December 31, 2013, 2012, and 2011,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 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. The Company has capitalized royalty payments made to Mt. Hope Mines, Inc. (“MHMI”) (discussed in Note 11 below) during the development stage. The amounts will be applied to production royalties owed upon the commencement of production. 55Table of Contents 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 equipmentFour to ten yearsOffice furniture, fixtures, and equipmentFive to seven yearsVehiclesThree to five yearsLeasehold improvementsThree years or the term of the lease, whichever is shorterResidential trailersTen to twenty yearsBuildings and improvementsTen to twenty seven and one-half years At December 31, 2013 and 2012, accumulated depreciation and amortization was $2.0 and $1.7 million, respectively, of which $1.7 and $1.5million, 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 under Accounting Standards Codification (“ASC”) 740, Income Taxes, a valuation allowance is recorded against thedeferred tax asset if management does not believe the Company 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. Future obligations to retire an asset, including site closure, dismantling, remediation and ongoing treatment and monitoring, are recorded as a liability at fairvalue at the time of construction or development. The fair value determination is based on estimated future cash flows, the current credit-adjusted risk-freediscount rate and an estimated inflation factor. The value of asset retirement obligations is evaluated on an annual basis or as new information becomesavailable on the expected amounts and timing of cash flows required to discharge the liability. The fair value of the liability is added to the carrying amount ofthe associated asset and this additional carrying amount will be depreciated or amortized over the estimated life of the asset upon the commencement ofcommercial production. An accretion cost, representing the increase over time in the present value of the liability, will also be recorded each period as accretionexpense upon the commencement of commercial production. As reclamation work is performed or liabilities are otherwise settled, the recorded amount of theliability is reduced. Stock-based Compensation Stock-based compensation represents the fair value related to stock-based awards granted to members of the Board, officers and employees. TheCompany uses the Black-Scholes model to determine the fair value of stock-based awards under authoritative guidance for Stock-Based Compensation. Forstock based compensation that is earned upon the satisfaction of a service condition, the cost is recognized on a straight-line basis (net of estimated 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 8 — “Equity Incentives.” Debt Issuance and Loan Commitment Costs The Company capitalized certain costs such as technical due diligence and related legal fees in the amount of $6.4 million. Such costs were incurredin direct pursuit of the Term Loan based on our belief that it was probable that the Company would receive the Term Loan in 2013. The Company wrote offall debt issuance costs previously recorded, as these costs were specifically related to Hanlong’s obligation to arrange the Term Loan. This obligation wasreleased upon the termination of the Purchase Agreement in August 2013. In addition, the $12.4 million value placed on the warrant issued to Hanlong in connection with the Sub Debt Facility was considered a loancommitment fee. These costs were to be amortized over the life of the Sub Debt Facility using the straight-line method from the date the loan agreement waseffective. The termination of the Sub Debt Facility in May 2013 resulted in a non-cash charge to the income statement in the amount of $11.5 million for theremaining unamortized value associated with the warrants. 56Table of Contents Recently Adopted Accounting Pronouncements Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a TaxCredit Carry forward Exists In July 2013, the FASB issued Accounting Standards Update (“ASU”) 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized TaxBenefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward Exists. The update aims to clarify presentation anddisclosure of unrecognized tax benefits to ensure consistency among organizations. The adoption of this guidance did not have a material impact on theCompany’s 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 development 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 11 “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 late 2013, the Company completed a Technical Report on the Mt. Hope Project using Canadian Instrument NI 43-101 guidelines, which provideddata on the viability and expected economics of the project. Based on the findings in the study, on a 100% basis, we reported 1.4 billion pounds of contained(1.2 billion pounds recoverable) molybdenum in proven and probable reserves. 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 2006 for the purchase of the remaining portion of High Desert’s interest in this property for the total purchase price of $5.5 millionincluding buildings and equipment at the Liberty site. The primary purpose of the Liberty purchase was to further the Company’s strategy of exploring anddeveloping other potential molybdenum properties. 57Table of Contents 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, and (c) 34 unpatented mining claims in Marion County, Oregon, known as the Detroit property. Summary. The following is a summary of mining properties, land and water rights at December 31, 2013 and 2012 (in thousands): AtDecember 31,2013At December 31, 2012Mt. Hope Project:Development costs$156,436$120,829Mineral, land and water rights11,72811,728Advance Royalties28,30027,800Total Mt. Hope Project196,464160,357Total Liberty Property9,7069,721Other Properties81889Total$206,251$170,967 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 who retired at the end of 2013, entered into an Option to Purchase Agreement for the Company’s non-core Turner Goldproperty, a multi-metallic property located in Josephine County, Oregon. JMC paid $2.2 million, of which $2.0 million was applied to the purchase price andhas been recorded as a gain on sale of mining properties. The remaining $0.2 million paid represents non-refundable fees paid in exchange for extending thedue date of installment payments. JMC made the required final payments on May 31, 2013 and November 29, 2013. Ownership of the Turner Goldproperty transferred to JMC upon the final payment. The Company retained a production royalty of 1.5% of all net smelter returns on future production fromthe property. The book value of the Company’s investment in the Turner Gold property was approximately $0.8 million. 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 who retired at the end of 2013, entered into an Option to Purchase Agreement for the Company’s non-coreDetroit Copper property, a multi-metallic property located in Marion County, Oregon. RMMI paid $0.1 million upon entering into the agreement. Theagreement required an additional $0.3 million installment payment on March 31, 2013. RMMI did not make the second installment payment, and as such,the Option to Purchase Agreement has been terminated and the property will remain with the Company. The $0.1 million payment was non-refundable andhas been recorded as other income in the Company’s financial statements for 2013. Development costs and Deposits on project property, plant and equipment Development costs of $156.4 million include hydrology and drilling costs, expenditures to further the permitting process, capitalized salaries,project engineering costs, and other expenditures required to fully develop the Mt. Hope Project. Deposits on project property, plant and equipment of $74.1million represent 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. 58Table of Contents 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 for a third partytransmission contract that will provide power to the Mt. Hope Project, and is accounted for as restricted cash. In the event that electricity transmission is notdelivered to the Mt. Hope Project commencing on December 1, 2014, the LLC will work with the provider to resell the available transmission or renegotiate anextension of the existing agreement. To the extent that the transmission capacity cannot be resold or the agreement extended, the LLC will forfeit the $12.0million over a five-year period according to a contractual monthly drawdown schedule. Writedowns of Development Costs and Deposits In 2011, the Company wrote off approximately $3.4 million in deposits, representing 50% of the deposit payments made to an equipment vendor,related to a contract for the purchase of electric shovels because of the passage of a June 30, 2011 deadline for a firm purchase order, at which time the LLC’scontract to purchase two electric shovels expired. NOTE 5 — ASSET RETIREMENT OBLIGATIONS Asset retirement obligations arise from the acquisition, development, construction and normal operation of mining property, plant and equipment dueto government controls and regulations that protect the environment on the closure and reclamation of mining properties. The exact nature of environmentalissues and costs, if any, which the Company or the LLC may encounter in the future are subject to change, primarily because of the changing character ofenvironmental requirements that may be enacted by governmental authorities. In January 2013, the LLC commenced preliminary construction activities at the Mt. Hope Project resulting in additional disturbance at the property. This has resulted in an increase to the reclamation liabilities recorded in the LLC’s financial statements. The following table shows asset retirement obligationsfor future mine closure and reclamation costs in connection with the Mt. Hope Project and within the boundaries of the Plan of Operations (“PoO”): AtDecember 31,2013(in thousands)At January 1, 2013 —Additions$1,112Accretion—At December 31, 20131,112 The estimated future reclamation costs for the Mt. Hope Project have been discounted using a rate of 8%. The total inflated and undiscountedestimated reclamation costs associated with current disturbance under the PoO at the Mt. Hope Project were $9.4 million at December 31, 2013. The LLC is required by U.S. federal and state laws to provide financial assurance sufficient to allow a third party to implement approved closureand reclamation plans if the LLC is unable to do so. The laws govern the determination of the scope and cost of the closure, and the amount and forms offinancial assurance. As of December 31, 2013, the LLC has provided the appropriate regulatory authorities with $73.4 million in reclamation financialguarantees through the posting of surety bonds for reclamation of the Mt. Hope Project as approved in the ROD. As of December 31, 2013, we had $6.3million in cash deposits associated with these bonds, which are accounted for as restricted cash and are unrelated to the inflated and undiscounted liabilityreferenced above. The LLC has a smaller liability at the Mt. Hope Project for disturbance which occurred outside the PoO boundaries. The LLC has not discountedthe reclamation liability incurred as the total amount is approximately $0.1 million. The Company’s Liberty Property is currently in the exploration stage. The Company has not discounted the reclamation liability incurred at theLiberty Property as the total liability is approximately $0.1 million. 59Table of Contents Mt. Hope Projectoutside the PoOboundaryLiberty(in thousands)At January 1, 2013 $502$125Additions——Adjustments *(421)—At December 31, 2013$81$125 * Includes reduced / reclaimed disturbance, BLM rate changes, and transfer into the approved PoO. NOTE 6 — COMMON STOCK UNITS, COMMON STOCK AND COMMON STOCK WARRANTS Year ended December 31, 2013 During the year ended December 31, 2013, options representing 20,000 shares were exercised for cash in the amount of $0.1 million, optionsrepresenting 250,000 shares were exercised in a cashless exchange resulting in the issuance of 46,165 shares and 361,992 shares of common stock wereissued pursuant to stock awards. Year ended December 31, 2012 During the year ended December 31, 2012, options representing 50,971 shares were exercised for cash in the amount of $0.6 million, optionsrepresenting 607,362 shares were exercised in a cashless exchange resulting in the issuance of 480,776 shares and 251,593 shares of common stock wereissued pursuant to stock awards. 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 $19.1 million, respectively. We issued 24,547 shares of common stock upon the cashless exercise of warrants, 70,175 shares ofcommon stock pursuant to stock awards, and 53,511 shares of common stock upon the exercise of stock appreciation rights. The following is a summary of common stock warrant activity for each of the three years ended December 31, 2013: Number of SharesUnderWarrantsExercise PriceBalance at December 31, 20106,263,209$ 3.66 to $5.00Exercised for cash(5,183,209)3.66 to 3.75Exercised in cashless exchange(80,000)3.75Balance at December 31, 20111,000,000$5.00Issuance of new warrants10,000,000$4.23Balance at December 31, 201211,000,000$4.23 to 5.00Expiration of warrants(10,000,000)$4.23Balance at December 31, 20131,000,000$5.00Weighted average exercise price$5.00 On October 26, 2012, the Company issued a warrant to Hanlong to purchase 10.0 million shares of the Company’s common stock in connectionwith the signing of the subordinated debt agreement at a price of $4.23 per share and had a value of $12.4 million. In addition, the $12.4 million value placedon the warrant issued to Hanlong in connection with the Sub Debt Facility was considered a loan commitment fee. These costs were to be amortized over thelife of the Sub Debt Facility using the straight-line method from the date the loan agreement was effective. The termination of the Sub Debt Facility inMay 2013 resulted in a non-cash charge to the income statement in the amount of $11.5 million for the remaining unamortized value associated with thewarrants. All warrants outstanding at December 31, 2013 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. 60Table of Contents NOTE 7 — 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, 2013, and 2012,no shares of preferred stock were issued or outstanding. NOTE 8 — 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 1,398,654 remain available for issuance as of December 31, 2013. 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, 2013, there was $4.7 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 SARs are approved by the Board of Directors 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 estimates the fair value of stock options and SARs using the Black-Scholes valuation model. Keyinputs and assumptions used to estimate the fair value of stock options and SARs include the grant price of the award, expected option term, volatility of theCompany’s stock, the risk-free rate and the Company’s dividend yield. The following table presents the weighted-average assumptions used in the valuationand the resulting weighted-average fair value per option or SAR granted: For the Year Ended December 31:201320122011Expected Life *3.5 to 6.0 years3.5 to 6.0 years3.5 to 5.5 yearsInterest Rate+0.36% to 1.37%0. 36% to 2.58%0.39% to 2.84%Volatility **+62.04% to 87.82%73.43% to 94.60%86.39% to 95.57%Dividend Yields———Weighted Average Fair Value of Stock AppreciationRights Granted During the Year$2.74$3.72$2.25 * 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. At December 31, 2013, the aggregate intrinsic value of outstanding and exercisable (fully vested) options and SARs was $0.2 million and had aweighted-average remaining contractual term of 2.0 years. The total intrinsic value of options exercised during the years ended December 31, 2013, 2012 and2011 was nil, $0.3 million, and $0.3 million, respectively. The total intrinsic value of SARs exercised during the year ended December 31, 2013, 2012 and2011 was nil, nil and $0.3 million, respectively. Restricted Stock Units and Stock Awards Grants of restricted stock units and stock awards (“Stock Awards”) have been granted as performance based or earned over a required service periodto officers and employees, or to Board members and the Company Secretary without any service requirement. 61Table of Contents Time based grants for officers and employees generally vest and stock is received without restriction to the extent of one-third of the granted stock for each yearfollowing the date of grant. Performance based grants are recognized as compensation based on the probable outcome of achieving the performance condition. Stock Awards issued to members of the Board and the Company Secretary that are fully vested at the time of issue are recognized as compensation upon grantof 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, 2013, 2012 and 2011 the weighted-average grant date fair value for Stock Awards was $1.82, $4.22, and$4.32, respectively. The total fair value of stock awards vested during 2013 and 2012 is $0.9 million and $0.9 million, respectively. Summary of Equity Incentive Awards The following table summarizes activity under the Plans during the year ended December 31, 2013: Stock OptionsSARsStock AwardsWeightedAverageExercisePriceNumber of SharesUnder OptionWeightedAverageStrikePriceNumberof SharesUnderOptionWeightedAverageGrantPriceNumber ofSharesBalance at January 1, 2013$6.221,266,658$3.291,639,631$4.221,136,223Awards Granted——1.15485,8061.821,516,013Awards Exercised or Earned2.75(270,000)——3.75(370,008)Awards Forfeited——3.63(15,620)4.85(1,338)Awards Expired6.36(451,659)4.28(13,164)——Balance at December 31, 2013$7.44544,9992.792,096,6532.702,280,890 Exercisable at December 31, 2013$7.83394,9992.06571,745 A summary of the status of the non-vested awards as of December 31, 2013 and changes during the year ended December 31, 2013 is presented below. Stock OptionsSARsStock AwardsWeightedAverageFairValueNumber of SharesUnder OptionWeightedAverageFairValueNumberof SharesUnderOptionWeightedAverageFairValueNumber ofSharesBalance at January 1, 2013$6.40150,000$3.951,131,841$4.221,136,223Awards Granted——1.15485,8061.821,516,013Awards Vested or Earned——3.97(77,119)3.75(370,008)Awards Forfeited——3.63(15,620)4.85(1,338)Balance at December 31, 2013$6.40150,0003.061,524,9082.702,280,890 Compensation Cost Recognized and Capitalized Related to Equity Incentives Summary of Compensation Cost Recognized andCapitalized related to Equity Incentives for theYear Ended December 31 (in thousands):201320122011Stock Options*$—$1$(49)SARsPerformance based417419204Vesting over time146257574Stock Awards:Performance based*810309(75)Vesting over time933539507Board of Directors and Secretary601528810Total$2,907$2,053$1,971Included in:Capitalized as Development1,078639258Expensed1,8291,4141,713$2,907$2,053$1,971 62Table of Contents * 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 book purposes due to the fact that an ISO does not ordinarilyresult 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 tax benefits from non-qualified stock option exercises are not recordeduntil the tax deduction reduces income tax payable. NOTE 9 — CHANGES IN CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST (CRNCI) Activity forYear EndedChanges CRNCI (Dollars in thousands)December 31,2013December 31,2012December 31,2011Total CRNCI January 1, 2013, 2012, & 2011, respectively$201,880$98,073$98,753Plus: Capital Contributions Attributable to CRNCI7,127103,807—Less: Net Loss Attributable to CRNCI——(680)Total CRNCI December 31, 2012, 2011, & 2010, respectively$209,007$201,880$98,073 NOTE 10 — INCOME TAXES At December 31, 2013 and 2012 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, 2013 and 2012. The significant componentsof the deferred tax asset at December 31, 2013 and 2012 were as follows (in thousands): December 31,2013December 31,2012Operating loss carry forward$195,733$181,936Unamortized exploration expense8,38810,579Fixed asset depreciation(46)(29)Deductible stock based compensation3,2642,446Other220241Deductible temporary difference$207,559$195,173Taxable temporary difference — Investment in Eureka Moly, LLC$(109,699)$(84,120)Net deductible temporary difference$97,860$111,053Deferred tax asset$34,251$38,869Deferred tax asset valuation allowance$(34,251)$(38,869)Net deferred tax asset$—$— At December 31, 2013 and 2012 we had net operating loss carry forwards of approximately $195.7 million and $181.9 million, respectively, whichexpire in the years 2017 through 2033. The change in the allowance account from December 31, 2012 to December 31, 2013 was $(4.6) million and thechange between December 31, 2012 and December 31, 2011 was $5.9 million. As of December 31, 2013 and 2012, 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. 63Table of Contents NOTE 11 — COMMITMENTS AND CONTINGENCIES Mt. Hope Project The Mt. Hope Lease Agreement (“Lease Agreement”) with MHMI may be terminated upon the expiration of its 30-year term, earlier at the election ofthe LLC, or upon a material breach of the agreement and failure to cure such breach. If the LLC terminates the lease, termination is effective 30 days afterreceipt by MHMI of written notice to terminate the Mt. Hope Lease Agreement and no further payments would be due to MHMI. In order to maintain the LeaseAgreement, the LLC must pay certain minimum advance royalties as discussed below. The Lease Agreement requires a payment of 3% of certain construction capital costs, defined in the Lease Agreement as the Capital Construction CostEstimate (the “Estimate”). The Estimate payment is treated as an Advance Royalty payment under the Lease Agreement. The LLC is obligated to pay aportion of the Estimate each time capital is raised for the Mt. Hope Project based on 3% of the expected capital to be used for those certain construction capitalcosts defined in the lease. Through December 31, 2013, we have paid $23.1 million of the total Estimate. A final reconciliation payment on the Estimate willbe due following the commencement of commercial production, after as-built costs are definitively determined. Based on the revised capital estimate discussedin Management’s Discussion & Analysis, and the current proposed timeline for the commencement of commercial production, the Company estimates that anadditional $4.2 million will be due in 2016, which amount has been accrued as of December 31, 2013. The capital estimates may be subject to escalation inthe event the Company experiences delays in achieving full financing for the Mt. Hope Project. The LLC is also obligated to make a minimum annual advance royalty payment (“Annual Advance Royalty”) of $0.5 million each October 19 forany year wherein commercial production has not been achieved or the MHMI Production Royalty (as hereinafter defined) is less than $0.5 million. Ascommercial production is not anticipated to commence until mid-2016, the Company has accrued $1.0 million in Annual Advance Royalty payments whichwill be due in two $0.5 million installments in October 2014 and 2015, respectively. An additional installment of $0.5 million was paid in October 2013. The Estimate and the Annual Advance Royalty are collectively referred to as the “Advance Royalties.” All Advance Royalties are credited against the MHMIProduction Royalties once the mine has achieved commercial production. After the mine begins production, the LLC estimates that the MHMI ProductionRoyalties will be in excess of the Annual Advance Royalties for the life of the Mt. Hope Project and, further, the Estimate will be credited against MHMIProduction Royalties owed at the rate of 50% of MHMI Production Royalties on an annual basis until fully consumed. Assuming a $15 molybdenum price,the Annual Advance Royalties are consumed within the first three years of commercial production. Deposits on project property, plant and equipment At December 31, 2013, 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. In late 2012 and early 2013, theLLC made additional commitments for wellfield materials and equipment, and placed purchase orders for long-lead milling process equipment including thecommitments for the engineering portion of flotation cells and roaster equipment. The following table sets forth the LLC’s cash commitments under mining and milling equipment contracts (collectively, “Purchase Contracts”) atDecember 31, 2013 (in millions): YearAs ofDecember 31,2013 *2014$2.6201512.8Total$15.4 * All amounts are commitments of the LLC, and are to be funded 80% by Nevada Moly and 20% by POS-Minerals. Equipment and Supply Procurement Through December 31, 2013, the LLC has made deposits and/or final payments of $74.1 million on equipment orders, has spent approximately$177.3 million for the development of the Mt. Hope Project and has paid $12.0 million into an escrow arrangement for electricity transmission services, for atotal Mt. Hope Project inception-to-date spend of $263.4 million. In 2012, the LLC issued a firm purchase order for eighteen haul trucks. The order provides for delivery of those haul trucks required to performinitial mine development, which will begin several months prior to commercial production. Non-refundable 64Table of Contents down-payments of $1.2 million were made in 2012, with pricing subject to escalation as the trucks were not delivered prior to December 31, 2013. During thethird quarter of 2013, the LLC renegotiated the timelines for truck delivery, accepting a 3% price increase and delaying deliveries into late 2014. The contractis cancellable with no further liability to the LLC. Also in 2012, the LLC issued a firm purchase order for four mine production drills with a non-refundable down-payment of $0.4 million, andpricing was subject to escalation if the drills were not delivered by the end of 2013. In June of 2013, the LLC signed a change order which delayed deliveryinto the second half of 2014 and triggered a $0.2 million price increase. The contract remains cancellable with no further liability to the LLC. On June 30, 2012, the LLC’s contract to purchase two electric shovels expired. On July 11, 2012, we signed a letter of intent with the same vendorproviding for the opportunity to purchase the electric shovels at prices consistent with the expired contract, less a special discount in the amount of $3.4million to provide credit to the LLC for amounts paid as deposits under the expired contract. The letter of intent provides that equipment pricing will remainsubject to inflation indexes and guarantees production slots to ensure that the equipment is available when required by the LLC. In October 2013, the partiesagreed to extend the letter of intent through June 30, 2014. Obligations under capital and operating leases We have contractual obligations operating leases that will require a total of $0.3 million in payments over the next three years. Operating leasesconsist primarily of rents on office facilities and office equipment. Our expected payments are $0.2 million, $0.1 million and nil for the years endedDecember 31, 2014, 2015, and 2016, 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 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 31, 2013, 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 was required to obtain approval from the U.S. Bureau of Land Management (“BLM”) to implement the Mt. HopeProject Plan of Operations (“PoO”). This approval, in the form of a Record of Decision (“ROD”) was obtained only after successful completion of the processof environmental evaluation, which incorporates substantial public comment. The LLC was also required to obtain various state and federal permitsincluding, but not limited to, water protection, air quality, water rights and reclamation permits. In addition to requiring permits for the development of theMt. Hope Project, we will need to obtain and modify various mining and environmental permits during the life of the Mt. Hope Project. Maintaining,modifying, and renewing the necessary governmental permits is a complex and time-consuming process involving numerous jurisdictions and often involvingpublic hearings and substantial expenditures. The duration and success of the LLC’s efforts to obtain, modify or renew permits will be contingent uponmany variables, some of which are not within the LLC’s control. Increased costs or delays could occur, depending on the nature of the activity to be permittedand the interpretation of applicable requirements implemented by the permitting authority. All necessary permits may not be obtained and, if obtained, maynot be renewed, or the costs involved in each case may exceed those that we previously estimated. In addition, it is possible that compliance with such permitsmay result in additional costs and delays. On November 16, 2012, the BLM issued its ROD authorizing development of the Mt. Hope Project. The ROD approves the PoO for constructionand operation of the mining and processing facilities and also grants the Rights-of-Way for a 230kV power transmission line, discussed below. Monitoringand mitigation measures identified in the ROD developed in collaboration with the regulatory agencies involved throughout the permitting process will avoid,minimize, and mitigate environmental impacts, and reflect the Company’s commitment to operate the Mt. Hope Project to the highest environmental standards. On February 15, 2013, Great Basin Resource Watch and the Western Shoshone Defense Project (“Plaintiffs”) filed a Complaint against the U.S.Department of the Interior and the BLM in the U.S. District Court, District of Nevada, seeking relief under 65Table of Contents the National Environmental Policy Act (“NEPA”) and other federal laws challenging the BLM’s issuance of the ROD for the Mt. Hope Project, and onFebruary 20, 2013 filed a Motion for Preliminary Injunction. The Court allowed the LLC to intervene on the matter. On August 22, 2013, the Court denied, without prejudice, the Motion for Preliminary Injunction based on the parties’ Joint Stipulation to ContinuePreliminary Injunction Oral Argument, which advised the Court that as a result of current economic conditions, including the Company’s ongoing financingefforts, all major ground disturbing activities had ceased at the Mt. Hope Project. The Court’s “without prejudice” ruling means that upon the Company’sdecision to recommence significant ground-disturbing activities which were approved by the ROD, sixty days advance notice will be provided to Plaintiffs, orif Plaintiffs believe the scope of minor ongoing approved site activities exceeds the stipulated agreement, then Plaintiffs may elect to re-file their Motion forPreliminary Injunction at that time. The parties and the Court have agreed to address the Plaintiffs’ claims under the pending Complaint based on theadministrative record and the parties’ motion for summary judgment briefing on the merits. Briefing by the parties and probable oral argument is anticipatedto be completed in the second quarter of 2014. The Mt. Hope Project underwent exhaustive environmental analysis and review that lasted more than 6 years. The process to complete the finalEnvironmental Impact Statement (“EIS”) included extensive public and cooperating agency input (including the BLM, the National Park Service, the U.S.Environmental Protection Agency, the Nevada Division of Wildlife and the County of Eureka). The Company supports the work completed by the BLM andbelieves that the ROD complies will all federal statutes and rules, and is very robust and defensible. Water Rights Considerations The Nevada State Engineer (“State Engineer”) has issued all water permits for the Mt. Hope Project. Eureka County, Nevada and two other partiescomprised of three individual water rights holders in Diamond Valley and one in Kobeh Valley filed an appeal in July 2012 to the Nevada Supreme Courtchallenging the granting of water permits by the State Engineer. On June 26, 2013, the appeal was consolidated with a similar appeal of the State Engineer’sapproval of the LLC’s Monitoring, Management and Mitigation Plan (“3M Plan”), discussed below, and remains pending before the Nevada Supreme Court. Two individual water rights holders appealed the State Engineer’s approval of the Company’s 3M Plan to the Nevada State District Court (“DistrictCourt”). Following oral argument on April 15, 2013, the District Court denied the Petition for Judicial Review of the 3M Plan and issued its Written Order onMay 17, 2013. Thereafter, Petitioners filed an appeal on May 20, 2013 of the District’s Court Order to the Nevada Supreme Court, which, as discussedabove, has been consolidated with the appeal of the water permits. We remain confident the Nevada Supreme Court will uphold the District Court’s Orders regarding the 3M Plan and the water permits. We expect theCourt to set the date for oral argument for the second quarter of 2014, before the full panel of Justices. Notwithstanding the above, subject to the ongoing Nevada Supreme Court consolidated appeal, the Company’s water permits have been granted andthe water remains available to the Company, as described above, for use at the Mt. Hope Project. NOTE 12 — UNAUDITED SUPPLEMENTARY DATA The following is a summary of selected quarterly financial information (unaudited): Year Ended December 31, 2013(in thousands, except per shareamounts)Q1Q2Q3Q4Loss from operations$(2,639)$(2,569)$(1,795)$(2,754)Other (expense)/income(361)(11,732)4,3521,194Consolidated net loss(3,000)(14,301)2,557(1,560)Basic net income/(loss) per share(0.03)(0.16)0.03(0.02)Diluted net income/(loss) per share$(0.03)$(0.16)$0.03$(0.02) Year Ended December 31, 2012Loss from operations$(3,093)$(2,613)$(2,063)$(3,610)Other income/(expense)(64)(64)(61)1,650Consolidated net loss(3,157)(2,677)(2,126)(1,960)Basic and diluted net loss per share$(0.03)$(0.03)$(0.02)$(0.03) 66Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 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, 2013 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 setforth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework in 1992. Based onthis evaluation, management concluded that, at December 31, 2013, the Company’s internal control over financial reporting was effective. The effectiveness of the Company’s assessment of internal control over financial reporting as of December 31, 2013 has been audited byPricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which appears herein. ITEM 9B. OTHER INFORMATION None. 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 2014 Annual Meeting of Stockholders (“2014 Proxy Statement”) to be filed within 120 days after our fiscal yearended December 31, 2013, 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 2014 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 2014 Proxy Statement, and is incorporated herein by reference thereto. Information regarding our Audit Committee, Compensation Committee, Finance Committee, Technical Committee and our Nominating Committee is presentedunder the heading 67Table of Contents “The Board of Directors, Board Committees and Director Independence” in our 2014 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 2014 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, 2013 is set forth under the heading“Equity Compensation Plan Information” in our 2014 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 2014 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 2014 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 2014 Proxy Statement, and is incorporated herein by this reference thereto. PART IV ITEM 15. EXHIBITS, 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-K filedon 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.) 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 on Form 10-KSB filed on March 31, 2006.) 68Table of Contents ExhibitNumberDescription10.3†Amendment to Lease Agreement, made effective as of November 20, 2007, between the Company and Mount Hope Mines, Inc. (Filed asExhibit 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 10.17 toour 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 10.6 toour 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 January 1, 2012, between the Company and Bruce D. Hansen (Filed asExhibit 10.8 to our Annual Report on Form 10-K filed on March 1, 2012.) 10.9†+First Amendment to Amended and Restated Employment Agreement, dated as of September 6, 2013, between the Company and BruceD. Hansen (Filed as Exhibit 10.01 to our Quarterly Report on Form 10-Q filed on November 4, 2013.) 10.10†+Salary Reduction and Stay Incentive Agreement, dated as of September 6, 2013, between the Company and Bruce D. Hansen (Filed asExhibit 10.021 to our Quarterly Report on Form 10-Q filed on November 4, 2013.) 10.11†+Amended and Restated Employment Agreement, dated January 1, 2012, between the Company and David Chaput (Filed asExhibit 10.9 to our Annual Report on Form 10-K filed on March 1, 2012.) 10.12†+First Amendment to Amended and Restated Employment Agreement, dated as of September 6, 2013, between the Company and DavidA. Chaput (Filed as Exhibit 10.03 to our Quarterly Report on Form 10-Q filed on November 4, 2013.) 10.13†+Salary Reduction and Stay Incentive Agreement, dated as of September 6, 2013, between the Company and David A. Chaput (Filed asExhibit 10.04 to our Quarterly Report on Form 10-Q filed on November 4, 2013.) 10.14†+Form of Indemnification Agreement (Filed as Exhibit 10.18 to our Current Report on Form 8-K filed on October 5, 2007.) 10.15†+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.) 10.16†+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.) 10.17†+Form of Restricted Stock Agreement under 2006 Equity Incentive Plan of the Company (Filed as Exhibit 10.14 to our Annual Report onForm 10-KSB filed on April 3, 2007.) 10.18†+Form of Non-Employee Option Award Agreement (Filed as Exhibit 99.1 to our Registration Statement on Form S-8 filed on January 12,2007.) 10.19†+Form of Employee Stock Option Agreement (Filed as Exhibit 99.2 to our Registration Statement on Form S-8filed on January 12, 2007.) 10.20†+Form of Stock Appreciation Right Grant Notice and Agreement under the Company’s 2006 Equity Incentive Plan (Filed as Exhibit 10.3to our Current Report on Form 8-K filed on March 5, 2009.) 10.21†+Form of Restricted Stock Unit Agreement under 2006 Equity Incentive Plan of the Company (Filed as Exhibit 10.4 69Table of Contents ExhibitNumberDescriptionto our Quarterly Report on Form 10-Q Filed on October 29, 2010.) 10.22†*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.) 10.23†*Extension Molybdenum Supply Agreement, dated as of April 16, 2010, by and between the Company and ArcelorMittal S.A. (Filed asExhibit 10.2 to our Quarterly Report on Form 10-Q filed on July 30, 2010.) 10.24†Contribution Agreement between Nevada Moly, LLC, a wholly-owned subsidiary of the Company, 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.) 10.25†Amended and Restated Limited Liability Company Agreement of Eureka Moly, LLC (Filed as Exhibit 10.20 to our Quarterly Report onForm 10-Q filed on May 7, 2008.) 10.26†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.) 10.27†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.) 10.28†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.) 10.29†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.) 10.30†*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.) 10.31†*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.) 10.32†+Employment Agreement, dated as of December 27, 2012, between the Company and Robert I. Pennington (Filed as Exhibit 10.28 to ourAnnual Report on Form 10-K filed on March 8, 2013.) 10.33†+First Amendment to Amended and Restated Employment Agreement, dated as of September 6, 2013, between the Company and RobertI. Pennington (Filed as Exhibit 10.05 to our Quarterly Report on Form 10-Q filed on November 4, 2013.) 10.34†+Salary Reduction and Stay Incentive Agreement, dated as of September 6, 2013, between the Company and Robert I. Pennington (Filedas Exhibit 10.06 to our Quarterly Report on Form 10-Q filed on November 4, 2013.) 10.35†+Employment Agreement, dated November 6, 2007, between the Company and Lee M. Shumway (Filed as Exhibit 10.49 to our AnnualReport on Form 10-K filed on March 5, 2010.) 10.36†+Change of Control Severance Agreement, dated effective as of January 1, 2012, between the Company and Lee M. Shumway (Filed asExhibit 10.40 to our Annual Report on Form 10-K filed on March 1, 2012.) 10.37†+Stay Incentive Agreement, dated as of September 6, 2013, between the Company and Lee M. Shumway (Filed as Exhibit 10.09 to ourQuarterly Report on Form 10-Q filed on November 4, 2013.) 10.38†+First Amendment to Change of Control Severance, Confidentiality and Non-Solicitation Agreement, dated as of September 6, 2013,between the Company and Lee M. Shumway (Filed as Exhibit 10.10 to our Quarterly Report on Form 10-Q filed on November 4, 2013.) 70Table of Contents ExhibitNumberDescription 10.39†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.) 10.40†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.) 10.41†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.) 10.42†Amendment No. 3 to Securities Purchase Agreement dated December 20, 2010, between General Moly, Inc. and Hanlong (USA) MiningInvestment, Inc. (Filed as Exhibit 7(e) to Hanlong (USA) Mining Investment, Inc.’s Schedule 13D filed on December 30, 2010.) 10.43†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 onJuly 13, 2011.) 10.44†Amendment No. 5 and Notice Pursuant to Securities Purchase Agreement dated June 14, 2012, by and between General Moly, Inc. andHanlong (USA) Mining Investment, Inc. (Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on June 15, 2012.) 10.45†Option Agreement with respect to Securities Purchase Agreement dated January 9, 2012, between General Moly, Inc. and Hanlong(USA) Mining Investment, Inc. (Filed as Exhibit 10.46 to our Annual Report on Fromm 10-K filed on March 1, 2012.) 10.46†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.) 10.47†Amendment No. 1 to Stockholder Agreement dated as of October 26, 2012, by and between General Moly, Inc. and Hanlong (USA)Mining Investment, Inc. (Filed as Exhibit 10.3 to our Current Report on Form 8-K filed on October 31, 2012.) 10.48†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.) 10.49†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.) 10.50†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.) 10.51†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.) 10.52†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.) 10.53†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.) 10.54†+Change of Control Severance Agreement dated January 1, 2012, between General Moly, Inc. and Robert Scott Roswell (Filed asExhibit 10.60 to our Annual Report on Form 10-K filed on March 1, 2012.) 71Table of Contents ExhibitNumberDescription10.55†+Stay Incentive Agreement, dated as of September 6, 2013, between the Company and R. Scott Roswell (Filed as Exhibit 10.07 to ourQuarterly Report on Form 10-Q filed on November 4, 2013.) 10.56†+First Amendment to Change of Control Severance, Confidentiality and Non-Solicitation Agreement, dated as of September 6, 2013,between the Company and R. Scott Roswell (Filed as Exhibit 10.08 to our Quarterly Report on Form 10-Q filed on November 4, 2013.) 10.57†+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.) 10.58†+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.) 10.59†+Form of Stock Appreciation Rights Grant Notice for the Company’s 2006 Equity Incentive Plan (Filed as Exhibit 10.8 to our QuarterlyReport on Form 10-Q filed on May 2, 2011.) 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. † 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. 72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 13, 2014. 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 13, 2014 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/ Gregory P. RaihDirectorGregory P. Raih /s/ Nelson F. ChenDirectorNelson F. Chen 73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, 333-149208, and 333-166999) andRegistration Statement on Form S-3 (No. 333-192668) of General Moly, Inc. of our report dated March 13, 2014 relating to the consolidated financialstatements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLP Denver, ColoradoMarch 13, 2014 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 13, 2014 By:/s/ Bruce D. HansenName:Bruce D. HansenTitle:Chief Executive Officer 1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 13, 2014 By:/s/ David A. ChaputName:David A. ChaputTitle:Chief Financial Officer 1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, 2013 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 13, 2014 By:/s/ Bruce D. HansenName:Bruce D. HansenTitle:Chief Executive Officer(Principal Executive Officer) 1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, 2013 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 13, 2014 By:/s/ David A. ChaputName:David A. ChaputTitle:Chief Financial Officer 1

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