General Moly, Inc. (GMO.TO)

I left Scott Roswell of Investor Relations a voicemail within the last day or two. He returned my call today and was very pleasant and professional.

Clearly, there are only so many things he can divulge/comment on but I basically expressed my frustration with where share price is currently relative to recent progress made with water rights, ROD, AMER dispute resolution, etc.

Scott assured me that he and his colleagues share the same frustration. The primary factor right now is the price of Moly. As long as it is under $10 it will be challenging to obtain financing. Essentially, the share price is a function of the price of moly for the most part, currently. The note exchange that has been publicly announced will occur soon and a press release will likely come out early in January to that effect.

Scott hopes, as we all do, that one day General Moly will be an overnight success. He didn't think the Great Basin law-suit has much merit and they could very well be in construction or production when/if that suit ever gets any play in the courts.

Hold your shares and be patient!

So Moly is up again today closing at $9.70 a lb. It has gone from $9.05 to $9.70 in 1 month. What does GMO have to show for it. Well it hit .22 cents today. GMO has obtained their water rights, their ROD and have settled their financing with AMER. They’re to start building the infrastructure for the mine and the SP is under .23. I have 600k shares and each week I reflect how sick I am that I didn’t diversify into other stocks in my portfolio. In which every other stock has gone up with the record high markets. I know there’s only about 5 posters on this board and I apologize for venting but I’m starting to lose faith. If GMO management doesn’t start to market their ready to build mine we’re at the mercy of non exposure which equals an abysmal share price.

Another topic I asked Scott Roswell about was total OS shares following AMER’s purchase and the exchange deal. Scott mentioned it was at roughly 152MM shares OS.

Point of me asking this was GMO has done an outstanding job at keeping OS shares at a minimum. This is a fully permitted project with only 152MM OS. Most projects of this size and project status are typically at twice that number.

Further, AMER only possesses a 26% voting right. Whereas this is a significant amount of shares, it’s not nearly enough to attempt a hostile takeover without driving the share price up. They would have to double their ownership from a limited owner base of which insiders possess a significant amount.

I’m feeling a little better than I had been about GMO, but would still like to see the SP twice what it is now until they make some major decisions.

This is good news folks and shows the confidence that GMO management wants to display in the viability of this project.

If GMO management say anything in public, it could be held as material and cause speculators to act which, if the speculator incurs losses, GMO management could be held liable. Therefore, management can only express certain information regarding their efforts toward permitting, financing, etc.

What I believe has been presented here is a veiled message to investors as to the confidence toward this moving forward. Think about it, $1.3MM in personal investment (not share options, share grants, or other forms of equity based compensation), but cash from personal savings invested in something they believe in.

Looks like the judge ordered their court appearance on Dec. 22 @ 11:00AM (MST). People can participate telephonically at 1-888- 684-8852 and access code 345 4024 #.

Doesn't say who can participate, but I may call in for this. I would be VERY interested to hear #b through #d below

Items for GMO to discuss are:
(a) be prepared to inform the Court generally about the nature of Debtor’s business and the reasons for filing bankruptcy

(b) be prepared to discuss generally the Debtor’s intended plan for reorganization, changes in operations, insurance coverage, tax liability, restructuring of debt, use of cash collateral and other matters pertinent to the Debtor’s business or reorganization;

(c) be prepared to advise the Court regarding its operating financial projections for the period preceding the filing of a plan, a budget for the professionals in the case and any particularities of the case which require resolution;

(d) be prepared to propose a schedule for the filing of a disclosure statement, plan of reorganization, a bar date for filing proofs of claims and objections to claims and, if applicable, anticipated avoidance actions or other adversary proceedings which are critical to the reorganization;

(e) be prepared to advise the Court whether it anticipates filing a separate disclosure statement or a simply a plan that provides sufficient information that a separate disclosure statement is not necessary pursuant to 11 U.S.C. §1125(f)(1);

(f) be prepared to advise the Court whether it is required to file the Periodic Report Regarding Value, Operations and Profitability of Entities in Which the Debtor’s Estate Holds a Substantial or Controlling Interest (Official Form 26) pursuant to Fed.R.Bankr.P. 2015.3

(g) advise the Court as to whether the Debtor is a “small business” pursuant to 11 U.S.C. § 101 (51C) and whether the case is a “single asset real estate case” as defined by 11 U.S.C. § 101 (51B); and

(h) if the Debtor is a “small business” pursuant to 11 U.S.C. §101 (51C), advise the Court whether it has filed and will continue to file a Small Business Monthly Operating Report (Official Form 25C) as required by 11 U.S.C. §308 and Fed.R.Bankr.P. 2015(a)(6)

I was reviewing the short interest for GMO (something I haven't done for a few months) and noticed that the short interest has dropped significantly. Last summer/fall, we were seeing short interest in the 1-2% range of float (roughly 800K to 1MM shares). However, looking today, the short interest ratio ending 12/31/2019 was 0.34% or 237K shares. Ending 11/30/2019 the short interest was 0.82% or 572K shares. That is a 59% drop from the previous month.

FWIW, short interest is a barometer of short seller sentiment regarding a stock. If short sellers think a stock is going to decline, then the short interest is high, in some cases in the 10-15% range. If the ratio drops, then this typically signifies short sellers are losing interest as they believe the SP will rise.

Chewing on the last news release I was wondering why they would exchange convertible notes to non-convertible notes? A convertible note changes to shares upon either maturity or another defined event. The holder would receive the quarterly interest rate, plus the value in shares at the strike price defined in the agreement. A non convertible note is merely a loan that pays similar interest rate, only at maturity the money is returned. No shares.

Second, the $610k infusion is in the form of a promissory note and not senior convertible shares.

In my simple thinking it appears management is trying to reduce the amount of OS shares, or in other words, reducing the dilution of the company’s inherent value. If there was a buyout on the horizon, the less amount of OS shares would mean a greater per share value.

Hmmm???

Just checked the GMO SEC filings. I can see the form-4 for the RSUs granted from the Dec. 11th 8-K announcement. Of note, I missed this before, but the note states:

"The restricted stock units vest on the earliest to occur of (i) a financing plan for the Mt. Hope Project approved by the Board, (ii) a strategic financing alternative; or (iii) June 30, 2020"

IMHO, they are feeling pretty confident about something happening before June 30th.

@Scott, it feels kind of eerie that this stock is not able to hold on to any of its upside. POSCO, should get involved as they have the strength to carry on the construction or acquisition of the mine.
This stock is too calm, it’s worrisome or either to good to be true and it will go up sharply. No volume to validate any thoughts. Been holding for a while, lots of positives but where are the investors if this is such an undervalued asset?
Management should keep us posted as the silence is nerve bracking.
Hope all goes well.
GLTA!

2009 revisited: The other night digging through some old office files, I found a hard copy of the 2009 (gulp) GMO annual report. It spoke of Moly prices during a 2 year span ranging from over $35/pound to under $8. The stock price with a 2-year range from over $12 to under .64. At the point of publication, March 2010, the price of Moly was $17 and the stock price was $4. They had reduced workforce by 40% to 34. They spoke of how permitting remains a challenge. The real kicker (or kick to home boys) was the deal they had just put in place with Hanlong. 25% of the shares for $80 million, a $20 million bridge loan, PLUS “Hanlong will procure, from a Prime Chinese Bank, a $665 million load to General Moly for Mt. Hope’s development.” As Matt Damon’s character in Rounder’s says after losing all his dough in one big hand “I felt like Buckner walking back into Shea”. I have no recollection of what happened to that loan, but man did that read feel eerily familiar. Any idea what happened then, and why Hanlong never helped? Were we better off with Moly prices at $17, but no permits? What came first the color orange or the fruit? OK, just riffing here, but it was an interesting look going into the new decade.

We expect ROD anytime now,
What if there is no one interested in the purchase at this time? They have money till end of October to sustain themselves. Do they declare bankruptcy & shares go even lower than they are after October ?
IMHO I thing management should clarify a bit more there intentions as investors feel a bit worried that because they have nothing in hand, no news is being put out. I would imagine that they want to attract investors to there stock to increase momentum and pull price up? Or is this a done deal and buyer is already in hand? It’s nerve bracking we will know soon. Massive Upside Or Massive downside. Regardless I am all in. Hoping for the best!
GLTA

This could hopefully help the price of moly. Unsure of the timing though.

From the news article:
The Ganzhou exchange will also trade molybdenum, tungsten, tin, cobalt and other metals, the report said, making its trading portfolio similar to that of China’s now-defunct Fanya Metal Exchange.

Fanya was launched in 2011 with the aim of raising prices for minor metals and initially enjoyed government support before collapsing amid liquidity problems in 2015.

https://www.reuters.com/article/us-china-rareearths/chinas-ganzhou-launches-rare-earths-exchange-idUSKBN1Z106J