** ****UNITED STATESSECURITIES AND EXCHANGE COMMISSION****Washington,D.C. 20549**

 

**FORM 10-Q**

 
| **x**                                                      | **QUARTERLY REPORT UNDER  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**  |
|------------------------------------------------------------|---------------------------------------------------------------------------------------------------|
|                                                       |                                                                                              |
| **For the quarterly period ended September 30, 2009** |
|                                                       |                                                                                              |
| **o**                                                      | **TRANSITION REPORT UNDER SECTION 13  OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |

 

**For the transition periodfrom            to            **

** **

**Commission File Number:001-32986**

** **

**General Moly, Inc.****(Exactname of registrant as specified in its charter)**

 

| **DELAWARE**                       | ** ** | **91-0232000**       |
|------------------------------------|------------|----------------------|
| (State or other  jurisdiction      |       | (I.R.S. Employer     |
| of incorporation  or organization) |       | Identification  No.) |

 

**1726 Cole Blvd., Suite 115Lakewood, CO 80401Telephone:  (303) 928-8599**(Address and telephone number of principal executiveoffices)

** **

Indicateby check mark whether the registrant (1) has filed all reports required tobe filed by Section 13 or 15(d) of the Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for at least the past 90 days. **YES****x****NO****o**

 

Indicate by check mark whether the registrant has submittedelectronically and posted on its corporate Web site, if any, every InteractiveData File required to be submitted and posted pursuant to Rule 405 ofRegulation S-T during the preceding 12 months (or for such shorter period thatthe registrant was required to submit and post such files).  **YES****o****NO****o**

 

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer, a non-accelerated filer, or a smaller reporting company. Seethe definitions of “large accelerated filer,” “accelerated filer” and “smallerreporting company” in Rule 12b-2 of the Exchange Act.

 

| Large  accelerated filer o                   |   | Accelerated  filer x         |
|----------------------------------------------|--------|------------------------------|
|                                         |   |                         |
| Non-accelerated  filer o                     |   | Smaller  reporting company o |
| (Do not check if  smaller reporting company) |   |                         |

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act).  **YES****o****NO****x**

 

The number of sharesoutstanding of registrant’s common stock as of November 6, 2009 was 72,437,538.

 

 

 

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**GENERALMOLY, INC.**

**EXPLANATORYNOTE**

 

**On November 3, 2009, GeneralMoly, Inc. (the “Company”)**determined that its unaudited consolidated financialstatements for the three months ended March 31, 2009 and the three and sixmonths ended June 30, 2009 contained an error with respect to the balancesheet classification of the POS-Minerals interest in Eureka Moly, LLC (the “LLC”).We classified the POS-Minerals interest as noncontrolling interest as of March 31,2009 and June 30, 2009 (and as minority interest within temporary equityas of December 31, 2008 prior to our implementation of FASB guidance forNoncontrolling Interests).  After  completion of a recent review and evaluation of the related LLC agreement  with POS-Minerals , management determinedthat POS-Minerals interest in the LLC is more appropriately  classified as temporary equity because of aprovision in the LLC Agreement that permits POS-Minerals the option to put its interest in the LLC to theCompany’s subsidiary, Nevada Moly, upon a change of control of the Company, as defined in the LLC agreement,followed by (i) failure to begin full construction at the LLC by theCompany or the surviving entity before December 31, 2010, or (ii) failureto use standard mining industry practice in connection with development andoperation of the project as contemplated by the parties for a period of twelvemonths after December 31, 2010.  IfPOS-Minerals put its interest, Nevada Moly would be required to purchase theinterest for 120 percent of POS-Minerals contributions to the LLC plus 10percent interest.

** **

**The following table reflects theimpact of the reclassification on the Company’s balance sheet for the quartersended March 31, 2009 and June 30, 2009:**

 
| ** **                                      | ** ** | **As of March 31, 2009** | ** ** | **As of June 30, 2009** | ** ** |
|-------------------------------------------------|------------|-------------------------------|------------|------------------------------|------------|
| ** **                                      | ** ** | **As Originally Reported**    | ** ** | **As Restated**              | ** ** | **As Originally Reported** | ** ** | **As Restated** | ** ** |
| Total Liabilities                               |       | 7,459                         |       | 7,459                        |       | 8,117 |   | 8,117 |   |
| Contingently Redeemable Noncontrolling Interest |       | 0                             |       | 99,897                       |       | 0 |   | 99,761 |   |
| EQUITY                                          |       |                          |       |                         |       |   |   |   |   |
| Noncontrolling Interest                         |       | 99,897                        |       | 0                            |       | 99,761 |   | 0 |   |
| Total Equity                                    |       | 210,258                       |       | 110,361                      |       | 207,734 |   | 107,973 |   |
| **TOTAL LIABILITIES AND EQUITY**                |       | $                             | 217,717    |                         | $          | 217,717 |   | $ | 215,851 |   | $ | 215,851 |   |
|                                                 |            |                               |            |                              |            |  |  |  |  |  |  |  |  |

** **

**The restatement will have no impacton net loss attributable to the Company or to cash flows for the three monthsended March 31, 2009 or for the three and six months ended June 30,2009, respectively.**

** **

Based on the foregoing,on November 3, 2009, the Audit Committee of the Company’s Board ofDirectors, upon the recommendation of management and after discussion with theCompany’s independent accountants, concluded that the Company’s unauditedconsolidated financial statements as of and for the three months ended March 31,2009 and as of and for the three and six month periods ended June 30, 2009should no longer be relied upon. The Audit Committee also concluded that theseunaudited consolidated financial statements should be restated to reflect thischange.

 

2

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**PART I - FINANCIAL INFORMATION**

** **

**ITEM 1.          FINANCIAL STATEMENTS**

 

**GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED BALANCE SHEETS**

** **

**(Dollars in thousands except per share amounts)**

 
| ** **                                                                                                                            | ** ** | **September 30,  2009  (Unaudited)** | ** ** | **December 31,  2008** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------|------------|-----------------------------|------------|
| **ASSETS**                                                                                                                            | ** ** | ** **                                |       |                        |       |
| CURRENT ASSETS                                                                                                                        |       |                                      |       |                        |       |
| Cash and cash equivalents                                                                                                             |       | $                                         | 58,646     |                        | $          | 78,462 |   |
| Restricted cash — Eureka Moly, LLC                                                                                               |       | 37                                        |       | 13,915                      |       |
| Deposits, prepaid expenses and other current assets                                                                                   |       | 214                                       |       | 326                         |       |
| Total Current Assets                                                                                                                  |       | 58,897                                    |       | 92,703                      |       |
| Mining properties, land and water rights (Note 4)                                                                                     |       | 97,432                                    |       | 79,292                      |       |
| Deposits on project property, plant and equipment                                                                                     |       | 40,214                                    |       | 31,499                      |       |
| Restricted cash held for electricity transmission                                                                                     |       | 12,286                                    |       | 12,545                      |       |
| Restricted cash held for reclamation bonds                                                                                            |       | 1,133                                     |       | 1,133                       |       |
| Non-mining property and equipment, net                                                                                                |       | 605                                       |       | 763                         |       |
| Other assets                                                                                                                          |       | 2,994                                     |       | 2,994                       |       |
| TOTAL ASSETS                                                                                                                          |       | $                                         | 213,561    |                        | $          | 220,929 |   |
| **LIABILITIES AND EQUITY**                                                                                                            | ** ** | ** **                                |       |                        |       |
| CURRENT LIABILITIES                                                                                                                   |       |                                      |       |                        |       |
| Accounts payable and accrued liabilities                                                                                              |       | $                                         | 6,175      |                        | $          | 6,692 |   |
| Current portion of long term debt                                                                                                     |       | 121                                       |       | 128                         |       |
| Total Current Liabilities                                                                                                             |       | 6,296                                     |       | 6,820                       |       |
| Provision for post closure reclamation and remediation costs                                                                          |       | 586                                       |       | 731                         |       |
| Deferred revenue                                                                                                                      |       | 100                                       |       | —                      |       |
| Long term debt, net of current portion                                                                                                |       | 240                                       |       | 330                         |       |
| Total Liabilities                                                                                                                     |       | 7,222                                     |       | 7,881                       |       |
|                                                                                                                                  |       |                                      |       |                        |       |
| COMMITMENTS AND CONTINGENCIES (Note 9)                                                                                                |       | —                                    |       | —                      |       |
|                                                                                                                                  |       |                                      |       |                        |       |
| CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST                                                                                       |       | 99,761                                    |       | 100,000                     |       |
|                                                                                                                                  |       |                                      |       |                        |       |
| EQUITY                                                                                                                                |       |                                      |       |                        |       |
| General Moly, Inc. stockholders’ equity                                                                                     |       |                                      |       |                        |       |
| Common stock, $0.001 par value; 200,000,000 shares authorized,  72,437,538 and 71,852,646 shares issued and outstanding, respectively |       | 72                                        |       | 72                          |       |
| Additional paid-in capital                                                                                                            |       | 186,812                                   |       | 185,179                     |       |
| Accumulated deficit before exploration stage                                                                                          |       | (213                                      | )          | (213                        | )          |
| Accumulated deficit during exploration and development stage                                                                          |       | (80,093                                   | )          | (71,990                     | )          |
| Total General Moly, Inc. stockholders’ equity                                                                               |       | 106,578                                   |       | 113,048                     |       |
| **TOTAL LIABILITIES AND EQUITY**                                                                                                      |       | $                                         | 213,561    |                        | $          | 220,929 |   |

 

The accompanyingnotes are an integral part of these consolidated financial statements.

** **

**3**

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** **

**GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF OPERATIONS**

**(Unaudited - In thousands, except per share amounts)**

 
| ** **                                                                         | ** ** | ** **                    | ** ** | ** **                    | ** ** | **January 1, 2002**      | ** ** |
|------------------------------------------------------------------------------------|------------|-------------------------------|------------|-------------------------------|------------|-------------------------------|------------|
| ** **                                                                         | ** ** | ** **                    | ** ** | ** **                    | ** ** | ** **                    | ** ** | ** ** | ** ** | **(Inception of** | ** ** |
| ** **                                                                         | ** ** | ** **                    | ** ** | ** **                    | ** ** | ** **                    | ** ** | ** ** | ** ** | **Exploration** | ** ** |
| ** **                                                                         | ** ** | **Three Months Ended**        | ** ** | **Nine Months Ended**         | ** ** | **Stage) to**                 | ** ** |
| ** **                                                                         | ** ** | **September   30, 2009** | ** ** | **September   30, 2008** | ** ** | **September   30, 2009** | ** ** | **September   30, 2008** | ** ** | **September 30,  2009** | ** ** |
|                                                                               |       |                          |       |                          |       |                          |       |   |   |   |   |
| REVENUES                                                                           |       | $                             | —     |                          | $          | —                        |       | $ | — |   | $ | — |   | $ | — |   |
| OPERATING  EXPENSES:                                                               |       |                          |       |                          |       |                          |       |   |   |   |   |
| Exploration  and evaluation                                                        |       | 273                           |       | 1,084                         |       | 638                           |       | 5,270 |   | 37,342 |   |
| General  and administrative expense                                                |       | 2,083                         |       | 2,204                         |       | 7,719                         |       | 8,119 |   | 47,002 |   |
| TOTAL  OPERATING EXPENSES                                                          |       | 2,356                         |       | 3,288                         |       | 8,357                         |       | 13,389 |   | 84,344 |   |
| LOSS  FROM OPERATIONS                                                              |       | (2,356                        | )          | (3,288                        | )          | (8,357                        | )          | (13,389 | ) | (84,344 | ) |
| OTHER  INCOME                                                                      |       |                          |       |                          |       |                          |       |   |   |   |   |
| Interest  and dividend income                                                      |       | 6                             |       | 530                           |       | 15                            |       | 1,563 |   | 3,947 |   |
| Other  income                                                                      |       | —                        |       | —                        |       | —                        |       | — |   | 65 |   |
| TOTAL  OTHER INCOME                                                                |       | 6                             |       | 530                           |       | 15                            |       | 1,563 |   | 4,012 |   |
| LOSS  BEFORE TAXES                                                                 |       | (2,350                        | )          | (2,758                        | )          | (8,342                        | )          | (11,826 | ) | (80,332 | ) |
| INCOME  TAXES                                                                      |       | —                        |       | —                        |       | —                        |       | — |   | — |   |
| CONSOLIDATED                                                                       |       |                          |       |                          |       |                          |       |   |   |   |   |
| NET  LOSS                                                                          |       | $                             | (2,350     | )                             | $          | (2,758                        | )          | $ | (8,342 | ) | $ | (11,826 | ) | $ | (80,332 | ) |
| LESS: NET LOSS ATTRIBUTABLE TO CONTINGENTLY  REDEEMABLE NONCONTROLLING INTEREST    |       | —                        |       | —                        |       | 239                           |       | — |   | 239 |   |
| NET LOSS ATTRIBUTABLE TO GENERAL MOLY, INC.                                        |       | $                             | (2,350     | )                             | $          | (2,758                        | )          | $ | (8,103 | ) | $ | (11,826 | ) | $ | (80,093 | ) |
| BASIC AND DILUTED NET LOSS ATTRIBUTABLE TO GENERAL  MOLY PER SHARE OF COMMON STOCK |       | $                             | (0.03      | )                             | $          | (0.04                         | )          | $ | (0.11 | ) | $ | (0.17 | ) |   |   |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES  OUTSTANDING — BASIC AND DILUTED     |       | 72,393                        |       | 71,353                        |       | 72,154                        |       | 69,663 |   |   |   |

** **

Theaccompanying notes are an integral part of these consolidated financialstatements.

** **

**4**

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** **

**GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited — In thousands)**

 
| ** **                                                                                     | ** ** | **Nine Months Ended**        | ** ** | **January 1, 2002  (Inception of  Exploration  Stage) to** | ** ** |
|------------------------------------------------------------------------------------------------|------------|------------------------------|------------|-----------------------------------------------------------------|------------|
| ** **                                                                                     | ** ** | **September 30,  2009** | ** ** | **September 30,  2008**                                    | ** ** | **September 30,  2009** | ** ** |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                          |       |                         |       |                                                            |       |   |   |
| Consolidated Net Loss                                                                          |       | $                            | (8,342     | )                                                               | $          | (11,826 | ) | $ | (80,332 | ) |
| Adjustments to reconcile net loss to net cash used by operating  activities:                   |       |                         |       |                                                            |       |   |   |
| Services and expenses paid with common stock                                                   |       | —                       |       | —                                                          |       | 1,990 |   |
| Writedown of deposits on property, plant and equipment                                         |       | 378                          |       | —                                                          |       | 378 |   |
| Depreciation and amortization                                                                  |       | 259                          |       | 225                                                             |       | 812 |   |
| Equity compensation for employees and directors                                                |       | 1,330                        |       | 2,029                                                           |       | 13,314 |   |
| Decrease (increase) in deposits, prepaid expenses and other                                    |       | 112                          |       | 53                                                              |       | (122 | ) |
| Decrease (increase) in restricted cash held for electricity  transmission                      |       | 259                          |       | (12,545                                                         | )          | (12,286 | ) |
| (Decrease) increase in accounts payable and accrued liabilities                                |       | (1,027                       | )          | 2,951                                                           |       | 5,643 |   |
| (Decrease) increase in post closure reclamation and remediation costs                          |       | (145                         | )          | 219                                                             |       | 377 |   |
| Net cash used by operating activities                                                          |       | (7,176                       | )          | (18,894                                                         | )          | (70,226 | ) |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                          |       |                         |       |                                                            |       |   |   |
| Payments for the purchase of equipment                                                         |       | (7                           | )          | (457                                                            | )          | (1,331 | ) |
| Purchase of securities                                                                         |       | —                       |       | —                                                          |       | (137 | ) |
| Purchase and development of mining properties, land and water rights                           |       | (17,520                      | )          | (32,422                                                         | )          | (91,274 | ) |
| Deposits on property, plant and equipment                                                      |       | (9,093                       | )          | (22,849                                                         | )          | (40,592 | ) |
| Proceeds from option to purchase agreement                                                     |       | 100                          |       | —                                                          |       | 100 |   |
| Increase in restricted cash held for reclamation bonds                                         |       | —                       |       | (355                                                            | )          | (642 | ) |
| Cash provided by sale of marketable securities                                                 |       | —                       |       | —                                                          |       | 246 |   |
| Net cash used by investing activities                                                          |       | (26,520                      | )          | (56,083                                                         | )          | (133,630 | ) |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                          |       |                         |       |                                                            |       |   |   |
| Proceeds from issuance of stock, net of issuance costs                                         |       | 99                           |       | 20,494                                                          |       | 165,204 |   |
| Cash proceeds from POS-Minerals Corporation                                                    |       | —                       |       | 100,000                                                         |       | 100,000 |   |
| Cash paid to POS-Minerals Corporation for purchase price adjustment                            |       | —                       |       | (2,994                                                          | )          | (2,994 | ) |
| Decrease (increase) in restricted cash — Eureka Moly, LLC                                 |       | 13,878                       |       | (41,578                                                         | )          | (37 | ) |
| Net (decrease) increase in debt                                                                |       | (97                          | )          | 192                                                             |       | 283 |   |
| Net cash provided by financing activities                                                      |       | 13,880                       |       | 76,114                                                          |       | 262,456 |   |
| Net (decrease) increase in cash and cash equivalents                                           |       | (19,816                      | )          | 1,137                                                           |       | 58,600 |   |
| Cash and cash equivalents, beginning of period                                                 |       | 78,462                       |       | 78,371                                                          |       | 46 |   |
| Cash and cash equivalents, end of period                                                       |       | $                            | 58,646     |                                                            | $          | 79,508 |   | $ | 58,646 |   |
| NON-CASH INVESTING AND FINANCING ACTIVITIES:                                                   |       |                         |       |                                                            |       |   |   |
| Equity compensation capitalized as development                                                 |       | $                            | 714        |                                                            | $          | 1,801 |   | $ | 4,843 |   |
| Restricted cash held for reclamation bond acquired in an acquisition                           |       | —                       |       | —                                                          |       | 491 |   |
| Post closure reclamation and remediation costs and accounts payable  assumed in an acquisition |       | —                       |       | —                                                          |       | 263 |   |
| Common stock and warrants issued for property and equipment                                    |       | —                       |       | —                                                          |       | 1,586 |   |

** **

**The accompanying notes are an integral part of theseconsolidated financial statements.**

** **

**5**

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** **

**GENERAL MOLY, INC.(A DEVELOPMENT STAGE COMPANY)**

** **

**NOTES TO UNAUDITED CONSOLIDATEDFINANCIAL STATEMENTS**

** **

**NOTE 1 — DESCRIPTION OF BUSINESS**

** **

General Moly, Inc. (“we”, “us”, “our”, “theCompany”, or “General Moly”) is a Delaware corporation originally incorporatedas General Mines Corporation on November 23, 1925.  In 1966, the Company amended its articles ofincorporation to change its name to Idaho General Petroleum and MinesCorporation, and amended its articles again in 1967 changing its name to IdahoGeneral Mines, Inc. On October 5, 2007, we reincorporated in theState of Delaware (the “Reincorporation”) through a merger involving IdahoGeneral Mines, Inc. and General Moly, Inc., a Delaware corporationthat was a wholly owned subsidiary of Idaho General Mines, Inc. TheReincorporation was effected by merging Idaho General Mines, Inc. with andinto General Moly, with General Moly being the surviving entity.  For purposes of the Company’s reportingstatus with the Securities and Exchange Commission, General Moly is deemed asuccessor to Idaho General Mines, Inc.

 

We were in the exploration stage until October 4,2007, when our Board of Directors (the “Board”) approved the development of theMt. Hope molybdenum property (the “Mt. Hope Project”) in Eureka County,Nevada.  The Company is now in thedevelopment stage and is currently proceeding with the development of the Mt.Hope Project.  We are also in a care andmaintenance mode on our Liberty molybdenum property (the “Liberty Property”) inNye County, Nevada.  In addition, we havecertain other, non-core, minor mineral interests in the Western United Statesthat we are currently evaluating for potential development or sale.

 

Certain amounts for the period ended December 31,2008 have been reclassified to conform to the 2009 presentation.

 

**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, wecontributed all of our interest in the assets related to the Mt. Hope Project,including our lease of the Mt. Hope Project into a newly formed entity, EurekaMoly, LLC, a Delaware limited liability company (“LLC”), and in February 2008(the “Closing Date”) entered into an agreement (the “LLC Agreement”) for thedevelopment and operation of the Mt. Hope Project (the “Project”) withPOS-Minerals Corporation (“POS-Minerals”) an affiliate of POSCO, a large Koreansteel company.  Under the LLC Agreement,POS-Minerals owns a 20% interest in the LLC and General Moly, through awholly-owned subsidiary, owns an 80% interest. These ownership interests and/or required contributions under the LLCAgreement can change as discussed below.

 

Pursuant to the terms of the LLC Agreement,POS-Minerals made its first and second cash contributions to the LLC totaling$100.0 million during the year ended December 31, 2008 (the “InitialContributions”).  Additional amounts willbe due from POS-Minerals within 15 days after the date (the “ROD ContributionDate”) that specified conditions (the “ROD Contribution Conditions”) have beensatisfied.  The ROD ContributionConditions are the receipt of major operating permits for the project, that theRecord of Decision (the “ROD”) from the United States Bureau of Land Management(“BLM”) for the project has become effective, and any administrative orjudicial appeals with respect thereto are final.  We are currently targeting the effectivenessof the ROD and the satisfaction of the ROD Contribution Conditions to occur inthe third quarter of 2010, but circumstances beyond our control, includingreviewing agency delays or requests for additional information or studies, andrequests for review or appeals of the BLM decision, could cause theeffectiveness of the ROD and/or the satisfaction of the ROD ContributionConditions to be delayed.

 

Our current forecast of the ROD Contribution Dateoccurring after December 31, 2009 allows POS-Minerals to elect to eitherretain its 20% share by contributing an additional $56.0 million plus its 20%share of all Project costs incurred from the Closing Date to the RODContribution Date or reduce its ownership interest to 13% and fund itsremaining 13% share of all Project costs incurred from the Closing Date to theROD Contribution Date.  Such an electionhas not been made by POS-Minerals, but is required to be made prior to January 31,2010.

 

6

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In addition, if commercial production at the Mt. HopeProject is not achieved by December 31, 2011****forreasons other than a force majeure event, Eureka Moly may be required to returnto POS-Minerals a portion of its contributions to the LLC, with nocorresponding reduction in POS-Minerals’ ownership percentage, based on itselection prior to January 31, 2010 as to its third contribution.  Based on our current plan and expectedtimetable, it is unlikely the Mt. Hope Project will achieve commercialproduction by December 31, 2011.  IfPOS-Minerals elects to retain its 20% interest and makes its additional $56.0million contribution, the return of contributions will be $36.0 million.  If POS-Minerals elects to retain its 20%interest but does not make its additional $56.0 million contribution, thereturn of contributions will be zero. If POS-Minerals elects to reduce itsownership interest to 13%, the return of contributions will be $33.0million.  Such return of contributions isrequired to be made on or prior to January 27, 2012.  Our subsidiary that holds our interest in theLLC is obligated under the terms of the LLC to make capital contributions to fundthe return of contributions to POS-Minerals, if required.  If our subsidiary does not make these capitalcontributions, POS-Minerals has an election to either take a secured interestin the LLC via a loan, or receive an additional interest in the LLC ofapproximately 5%.  In the latter case,our interest in the LLC is subject to dilution by a percentage equal to theratio of 1.5 times the amount of the unpaid contributions over the aggregateamount of deemed capital contributions (as determined under the LLC Agreement)of both parties to the LLC (the “Dilution Formula”).  At September 30, 2009, the aggregateamount of deemed capital contributions of both parties was $950 million.

 

Furthermore, a provision in the LLC Agreement permitsPOS-Minerals the optionto put its interest in the LLC to the Company’s subsidiary, Nevada Moly,upon  a change of control of the Company,as defined in the LLC agreement, followed by (i) failure to begin fullconstruction at the LLC by the Company or the surviving entity before December 31,2010, or (ii) failure to use standard mining industry practice inconnection with development and operation of the project as contemplated by theparties for a period of twelve months after December 31, 2010.  If POS-Minerals put its interest, Nevada Molywould be required to purchase the interest for 120 percent of POS-Mineralscontributions to the LLC plus 10 percent interest.

 

The Initial Contributions of $100.0 million that weremade by POS-Minerals during 2008 were expended by the second quarter of 2009 inaccordance with the program and budget requirements of the Mt. HopeProject.  We are required, pursuant tothe terms of the LLC Agreement, to advance funds required to pay costs for thedevelopment of the Mt. Hope Project that exceed the Initial Contributions untilthe ROD Contribution Date, at which point the contributions described above tobe made by POS-Minerals will be applied to reimburse us for POS-Minerals’ shareof such development costs.  All costsincurred after the ROD Contribution Date will be allocated and funded pro ratabased on each party’s ownership interest. The interest of a party in the LLC that does not make its pro ratacapital contributions to fund costs incurred after the ROD Contribution Date issubject to dilution based on the Dilution Formula.

 

**NOTE2 — LIQUIDITY, CAPITAL REQUIREMENTS AND RESTRUCTURING**

** **

Ourconsolidated cash balance at September 30, 2009 was $58.7 million comparedto $92.4 million at December 31, 2008. The cash needs for the development of the Mt. Hope Project require thatwe or Eureka Moly obtain project financing or other significant financing inaddition to the capital contributions anticipated to be received fromPOS-Minerals.  The aggregate amount ofadditional financing required for the development of the Mt. Hope Project,minus the amounts anticipated to be received from POS-Minerals on the RODContribution Date is anticipated to range between $715 million and $850million, depending on the election made by POS-Minerals concerning its futurecontributions.  These amounts do notinclude financing costs or amounts necessary to fund operating working capital.

 

During2008, we engaged Barclays Capital and Credit Suisse Securities (USA) LLC toassist in our efforts to pursue project financing for the Mt. HopeProject.  Additionally, during the secondquarter of 2009, the Company engaged Cutfield Freeman & Co., aLondon-based financial advisory firm, to assist the Company in primarilyseeking bi-lateral agency and off-take related financing to potentially augmentthe projected bank financing.  Ourability to obtain such project and / or agency financing depends on theeffectiveness and the timing of the ROD, the anticipated price of molybdenum,our projected operating costs and the overall state of the economy and thecredit markets.

 

7

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The2008 disruptions in national and international credit markets have led tovolatile conditions.  There is a scarcityof credit and lenders are imposing tighter lending standards and higherinterest costs for loans.  Our ability toobtain the necessary funding for the Mt. Hope Project as well as the terms forsuch funding may be adversely affected by these disruptions in the creditmarkets.  We may not be able to obtainthe necessary financing for the Mt. Hope Project in a timely manner, oncustomary or favorable terms, or at all.

 

Giventhe continued uncertainty in the project finance market, low molybdenum pricesat the time, and a longer than expected timeframe to receive the federalpermits to begin construction at the Mt. Hope project, on March 26, 2009,we implemented a cash conservation plan to reduce expenditures and conservecash for 2009 and 2010 in order to maximize financial flexibility.  With our September 30, 2009 consolidatedcash balance of $58.7 million, we have the capacity to continue our currentlevel of permitting efforts, maintain efforts to secure project financing, andsecure and hold critical long lead equipment for the ultimate construction ofthe Mt. Hope project through the end of 2010 without accessing new sources offinancing while maintaining the current cash conservation strategy.

 

TheCompany has purchase orders for two types of equipment — milling processequipment and mining equipment.  Mostequipment orders for the custom-built grinding and other milling processequipment will be completed by the manufacturers and stored.  The grinding and milling process equipmentrequire the longest lead times and maintaining these orders is critical to theCompany’s ability to re-start the development of Mt. Hope rapidly.  Fabrication of less critical equipment hasbeen suspended with some manufacturers. The Company has substantially completed final negotiations with otherequipment manufacturers to suspend or terminate fabrication of other millingequipment and to determine the equipment fabrication costs incurred to date,storage costs, and the expected timing of restarting fabrication.

 

Basedon our current plan, expected timetable, and the results of such negotiations,we expect to make additional payments of approximately $36.8 million undermilling process equipment orders through the end of 2010, with the majority ofsuch spending concentrated in the first half of the year, and $4.1 million in2011.  As additional financing is securedand equipment procurement is restarted, agreements that were suspended orterminated will be renegotiated under new market terms and conditions, asnecessary.  For the gyratory crusher, SAGand ball mills and related electric mill drives, and some other long-leadequipment, we will own the equipment upon final payments occurring throughout2009 and 2010.  This strategy will allowfor a rapid restart of the project development at anytime in 2010.

 

Someorders for mining equipment have been cancelled, and discussions with theremaining suppliers to either cancel or suspend existing agreements aresubstantially complete.  The lead timesand costs associated with many of these items have declined.  Once sufficient financing is secured, theCompany anticipates placing orders for this mining equipment.  The Company will continue to evaluate alloptions to decrease Mt. Hope’s initial capital requirement and facilitate arapid re-start of the project development.

 

Thecash conservation plan has reduced our total cash utilization for generaladministration and overhead to approximately $1 million per month.  Based on our current cash on hand, theCompany expects it will have adequate liquidity for operations through the endof 2010 without accessing new sources of financing.  Engineering efforts, approximately 60%complete, were largely suspended in the second quarter of 2009, pending thecompletion of financing.  Someengineering that is critical for permitting or project restart readiness hascontinued at a slower pace.

 

Thecash conservation plan also impacted General Moly employees and contractorsupport.  In March 2009, the Companyinitiated plans to reduce administrative expenses by $5 million per yearthrough a combination of compensation restructuring and positioneliminations.  The majority of costsassociated with termination benefits were recognized in March, 2009 althoughadditional costs of $0.1 million were recognized during the second quarter fora few affected employees who rendered services beyond 60 days.  We also incurred approximately $0.7 millionin equipment contract cancellation costs during the second quarter of2009.  Such costs were a combination ofdeposits forfeited and costs to cancel contracts.

 

Whilewe do not expect to achieve full project financing until credit markets andmolybdenum prices demonstrate sustained improvement, we are continuing toevaluate a number of potential sources for capital, including the possibilityof a sale of additional minority interests in the Mt. Hope Project, additionalsupport from 

 

8

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current strategic partners, off-take related debt, anddebt from private investment groups, as well as the capital markets.

 

Oncethe ROD is effective, additional capital will be required through thecommencement of commercial production at the Mt. Hope Project.  Our ability to develop the project isdependent on, among other things, our ability to raise the necessary capital tofund the Mt. Hope Project both in sufficient amount and in a timelymanner.  Additionally, if the currentlyestimated costs of the Mt. Hope Project are exceeded we will need to raiseadditional capital to fund such overruns. The Company is currently, and will on an ongoing basis be, pursuing themost efficient sources of funding for the project including, but not limitedto, the equity markets, the bank project finance markets, bi-lateral agencyfinancing and the high yield debt markets.

 

Wealso require capital to maintain our mining claims and other rights related tothe Liberty Property, as well as continue payment of ongoing general andadministrative costs associated with supporting our operations.

 

**NOTE3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

** **

Theinterim Consolidated Financial Statements of the Company are unaudited.  In the opinion of management, all adjustmentsand disclosures necessary for a fair presentation of these interim statementshave been included.  All such adjustmentsare, in the opinion of management, of a normal recurring nature except for theadoption of the new accounting standards discussed below.  The Company has evaluated all subsequentevents through November 9, 2009, the filing date of this Form 10-Q,and the issuance of our financial statements. The results reported in these interim Consolidated Financial Statementsare not necessarily indicative of the results that may be reported for theentire year.  These interim ConsolidatedFinancial Statements should be read in conjunction with the ConsolidatedFinancial Statements included in our Annual Report on Form 10-K for theyear ended December 31, 2008.

 

Thissummary of significant accounting policies is presented to assist inunderstanding the financial statements. The financial statements and notes are representations of the Company’smanagement, which is responsible for their integrity and objectivity.  These accounting policies conform toaccounting principles generally accepted in the United States of America andhave been consistently applied in the preparation of the financial statements.

 

*Contingently Redeemable Noncontrolling Interest*

 

On January 1,2009, we adopted FASB issued authoritative guidance related to NoncontrollingInterests in Consolidated Financial Statements, the provisions of which, amongothers, require the recognition of a noncontrolling interest (previouslyreferred to as minority interest), as a component of equity in the consolidatedfinancial statements and separate from the parent’s equity for all periods presented.In addition, the amount of net income or loss attributable to thenoncontrolling interest is included in consolidated net income or loss on theface of the consolidated statement of operations.    Under GAAP, certain noncontrollinginterests in consolidated entities meet the definition of mandatorilyredeemable financial instruments if the ability to redeem the interest isoutside of the control of the consolidating entity.  As described in Note 1, the LLC Agreementpermits POS-Minerals the option to put its interest in the LLC to Nevada Molyupon a change of control, as defined in the LLC Agreement, followed by (i) failureto begin full construction at the LLC by the Company or the surviving entitybefore December 31, 2010, or (ii) failure to use standard miningindustry practice in connection with development and operation of the projectas contemplated by the parties for a period of twelve months after December 31,2010.  As such, the contingentlyredeemable noncontrolling interest has continued to be shown as a separatecaption between liabilities and equity (mezzanine section).  The carrying value of the contingentlyredeemable noncontrolling interest reflects the investment of thenoncontrolling interest, less losses attributable to the interest.

 

*Estimates*

 

Theprocess of preparing consolidated financial statements requires the use ofestimates and assumptions regarding certain types of assets, liabilities,revenues, and expenses.  Such estimatesprimarily relate to unsettled transactions and events as of the date of thefinancial statements.  Accordingly, uponsettlement, actual results may differ from estimated amounts.

 

9

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*Cash and Cash Equivalents*

 

Weconsider all highly liquid investments with original maturities of three monthsor less to be cash equivalents.  Therestricted cash of Eureka Moly represents the unspent amount of thePOS-Minerals contributions, which are available for the continuing developmentof the Mt. Hope Project.  The Company’scash equivalent instruments are classified within Level 1 of the fair valuehierarchy established by FASB guidance for Fair Value Measurements because theyare valued based on quoted market prices in active markets.  These cash instruments included $57.5 millionin U.S. Treasury securities at September 30, 2009.

 

*Exploration and Development Stage Activities*

 

We were in theexploration stage from January 2002 until October 4, 2007.  On October 4, 2007, our Board ofDirectors approved the development of the Mt. Hope Project as contemplated inthe Bankable Feasibility Study and we then entered into the DevelopmentStage.  We have not realized any revenuefrom operations.  We will be primarilyengaged in development of the Mt. Hope Project and exploration and evaluationof the Liberty Property until we enter the production stage.

 

*Basic and Diluted Net Loss Per Share*

 

Netloss per share was computed by dividing the net loss attributable to GeneralMoly, Inc. by the weighted average number of shares outstanding during theperiod.  The weighted average number ofshares was calculated by taking the number of shares outstanding and weightingthem by the amount of time that they were outstanding.  Outstanding warrants to purchase 7,455,434and 7,560,434 shares of common stock, options to purchase 3,121,656 and4,267,500 shares of common stock and awards totaling 175,000 and 255,000 at September 30,2009 and 2008, respectively, were not included in the computation of dilutedearnings per share for the three and six months ended September 30, 2009and 2008 because to do so would have been anti-dilutive.  Therefore, basic loss per share is the sameas diluted loss per share.

 

*Mineral Exploration and Development Costs*

 

Allexploration expenditures are expensed as incurred.  Significant property acquisition payments foractive exploration properties are capitalized. If no economic ore body is discovered, previously capitalized costs areexpensed in the period the property is abandoned.  Expenditures to develop new mines, to definefurther mineralization in existing ore bodies, and to expand the capacity ofoperating mines, are capitalized and amortized on a units-of-production basisover proven and probable reserves.

 

Shoulda property be abandoned, its capitalized costs are charged to operations.  The Company charges to the consolidatedstatement of operations the allocable portion of capitalized costs attributableto properties sold.  Capitalized costsare allocated to properties sold based on the proportion of claims sold to theclaims remaining within the project area.

 

*Mining Properties, Land and Water Rights*

 

Costsof acquiring and developing mining properties, land and water rights arecapitalized as appropriate by project area. Exploration and related costs and costs to maintain mining properties,land and water rights are expensed as incurred while the property is in theexploration and evaluation stage. Development and related costs and costs to maintain mining properties, landand water rights are capitalized as incurred while the property is in thedevelopment stage.  When a propertyreaches the production stage, the related capitalized costs are amortized usingthe units-of-production basis over proven and probable reserves.  Mining properties, land and water rights areperiodically assessed for impairment of value, and any subsequent losses arecharged to operations at the time of impairment.  If a property is abandoned or sold, a gain orloss is recognized and included in the consolidated statement of operations.

 

 

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*Depreciation and Amortization*

 

Propertyand equipment are recorded at cost and depreciated using the straight-linemethod over the estimated useful lives of the assets. Property and equipmentare depreciated using the following estimated useful lives: field equipment —five years; office furniture, fixtures, and equipment — five years; vehicles —three to five years; leasehold improvements — three years; residential trailers— ten to twenty years; and buildings and improvements — ten years.

 

*Provision for Taxes*

 

Incometaxes are provided based upon the liability method of accounting pursuant toFASB guidance for Accounting for Income Taxes (hereinafter “ASC 740”).  Under this approach, deferred income taxesare recorded to reflect the tax consequences in future years of differencesbetween the tax basis of assets and liabilities and their financial reportingamounts at each year-end.  A valuationallowance is recorded against the deferred tax asset if management does notbelieve the Company has met the “more likely than not” standard imposed by ASC740 to allow recognition of such an asset.

 

*Reclamation and Remediation*

 

Expendituresfor ongoing compliance with environmental regulations that relate to currentoperations are expensed or capitalized as appropriate.  Expenditures resulting from the remediationof existing conditions caused by past operations that do not contribute tofuture revenue generations are expensed. Liabilities are recognized when environmental assessments indicate thatremediation efforts are probable and the costs can be reasonablyestimated.  Estimates of such liabilitiesare based upon currently available facts, existing technology and presentlyenacted laws and regulations taking into consideration the likely effects ofinflation and other societal and economic factors, and include estimates ofassociated legal costs.  These amountsalso reflect prior experience in remediating contaminated sites, othercompanies’ clean-up experience and data released by The EnvironmentalProtection Agency or other organizations. Such estimates are by their nature imprecise and can be expected to berevised over time because of changes in government regulations, operations,technology and inflation.  Recoveries areevaluated separately from the liability. When recovery is assured, the Companyrecords and reports an asset separately from the associated liability.

 

*Stock-based Compensation*

 

Stock-based compensationrepresents the fair value related to stock-based awards granted to members ofthe board of directors, officers and employees. The Company uses the Black-Scholes model to determine the fair value ofstock-based awards under FASB guidance for Share Based Payments.  For stock-based compensation that is earnedupon the satisfaction of a service condition, the cost is recognized on astraight-line basis (net of estimated forfeitures) over the requisite vestingperiod (up to three years).  Awardsexpire five years from the date of vesting. Further information regarding stock-based compensation can be found inNote 6 — “Equity Incentives.”  Stockcompensation costs related to services associated with the Mt. Hope project arecapitalized as development costs.

 

*Recently Issued AccountingPronouncements*

 

In April 2009, theFASB issued guidance for Determining Fair Value When the Volume and Level ofActivity for the Asset or Liability Have Significantly Decreased andIdentifying Transactions That Are Not Orderly. Based on the guidance, if anentity determines that the level of activity for an asset or liability hassignificantly decreased and that a transaction is not orderly, further analysisof transactions or quoted prices is needed, and a significant adjustment to thetransaction or quoted prices may be necessary to estimate fair value.  This guidance is to be applied prospectivelyand is effective for interim and annual periods ending after June 15, 2009with early adoption permitted for periods ending after March 15, 2009. TheCompany has adopted this guidance for its quarter ending September 30,2009.  The adoption of the guidance hadno impact on the Company’s consolidated financial position, results ofoperations or cash flows.

 

In April 2009, theFASB issued guidance for Interim Disclosures about Fair Value of FinancialInstruments, amending previous guidance on Disclosures about Fair Value ofFinancial Instruments that required an 

 

11

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entity to providedisclosures about fair value of financial instruments in interim financialinformation. The new guidance is to be applied prospectively and is effectivefor interim and annual periods ending after June 15, 2009 with earlyadoption permitted for periods ending after March 15, 2009.  The Company has adopted the new guidance forquarter ending September 30, 2009. The adoption of the new guidance had no impact on the Company’sconsolidated financial position, results of operations or cash flows.

 

In May 2009, theFASB issued guidance for Subsequent Events, which provides guidance toestablish general standards of accounting for and disclosures of events thatoccur after the balance sheet date but before financial statements are issuedor are available to be issued. The guidance also requires entities to disclosethe date through which subsequent events were evaluated as well as therationale for why that date was selected. This disclosure should alert allusers of financial statements that an entity has not evaluated subsequentevents after that date in the set of financial statements being presented. Thisguidance is effective for interim and annual periods ending after June 15,2009.  The Company adopted the provisionsof this new guidance for the interim period ended June 30, 2009.  The adoption of such guidance had no impacton the Company’s consolidated financial position, results of operations or cashflows.

 

In June 2009, theFASB approved the “FASB Accounting Standards Codification” (the “Codification”)as the single source of authoritative nongovernmental U.S. GAAP, effective on July 1,2009. The Codification does not change current U.S. GAAP, but is intended tosimplify user access to all authoritative U.S. GAAP by providing all theauthoritative literature related to a particular topic in one place. Allexisting accounting standard documents will be superseded and all otheraccounting literature not included in the Codification will be considerednon-authoritative. The Codification is effective for interim and annual periodsending after September 15, 2009. The Codification is effective for theCompany in the interim period ending September 30, 2009 and the adoptiondid not impact the Company’s consolidated financial position, results ofoperations or cash flows.

 

**NOTE4 — MINING PROPERTIES, LAND AND WATER RIGHTS**

** **

Wecurrently have interests in two mining properties that are the primary focus ofour operations.  The Mt. Hope Project iscurrently in the development stage and the Liberty Property is in a care andmaintenance mode.** **Thefollowing is a summary of mining properties, land and water rights at September 30,2009 and December 31, 2008 (in thousands):

 

**Mining Properties, Land and WaterRights**

 
| ** **                      | ** ** | **At********September 30,  2009** | ** ** | **At December 31,  2008** | ** ** |
|---------------------------------|------------|----------------------------------------|------------|--------------------------------|------------|
| Mt.  Hope Project:              |       |                                   |       |                           |       |
| Development  costs              |       | $                                      | 72,523     |                           | $          | 54,722 |   |
| Mineral,  land and water rights |       | 10,253                                 |       | 10,253                         |       |
| Advance  Royalties              |       | 4,000                                  |       | 3,650                          |       |
| Total  Mt. Hope Project         |       | 86,776                                 |       | 68,625                         |       |
| Total  Liberty Property         |       | 9,767                                  |       | 9,778                          |       |
| Other  Properties               |       | 889                                    |       | 889                            |       |
| Total                           |       | $                                      | 97,432     |                           | $          | 79,292 |   |

 

On June 262009, the Company and Josephine Mining Corp. (JMC), a privately-owned Canadiancompany whose president is a related party to one of the Company’s Boardmembers, entered into an Option to Purchase Agreement for the Company’s TurnerGold property, a multi-metallic property located in Josephine County,Oregon.  The Company acquired theproperty in 2004.  JMC paid $0.1 millionupon entering into the agreement, which allows JMC certain exploratory rightsthrough the option period.  Each optionis non-refundable.  The $0.1 million hasbeen recorded as deferred revenue pending completion of the purchase.  At JMC’s option, $0.3 million will be due December 26,2010 and $1.6 million on or before December 26, 2011 if JMC decides tocomplete the purchase.  The Company hasalso retained a Production Royalty of 1.5% of all net smelter returns on futureproduction from the property.

 

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**NOTE5 — COMMON STOCK AND COMMON STOCK WARRANTS**

** **

Duringthe three months ended September 30, 2009 we issued no shares of commonstock, and in the nine months ended September 30, 2009, we issued 492,225shares of common stock, pursuant to stock awards under the 2006 EquityIncentive Plan.

 

At September 30,2009, we had warrants outstanding totaling 7,455,434 of which 6,455,434 areexercisable at $3.75 per warrant and expire February 2011 and 1,000,000are exercisable at $10.00 per share once General Moly has received financingnecessary for the commencement of commercial production at the Mt. Hope Projectand will expire one year afterwards.

 

**NOTE6 — EQUITY INCENTIVES**

** **

In 2006, the Board andshareholders of the Company approved the 2006 Equity Incentive Plan (the “2006Plan”) which replaced the 2003 Equity Incentive Plan (the “2003 Plan”).  In 2007, the shareholders approved anamendment to the 2006 Plan to increase the number of shares that may be issuedunder the 2006 Plan.   The 2006 Planauthorizes the Board, or a committee of the Board, to issue or transfer up toan aggregate of 5,460,000 shares of common stock (including the unissued sharesavailable under the 2003 Plan) of which 531,822 remain available forissuance.  Awards under the Plan mayinclude incentive stock options, non-statutory stock options, restricted stockunits, restricted stock awards, and stock appreciation rights.   Stock appreciation rights may be settledwith cash or common shares.  The Companysettles the exercise of other stock-based compensation with newly issued commonshares.

 

Stock-based compensationcost is estimated at the grant date based on the award’s fair value ascalculated utilizing the Black-Scholes option pricing model and is recognizedas compensation ratably on a straight-line basis over the requisitevesting/service period.  As of September 30,2009, there was $2.4 million of total unrecognized compensation cost related toshare-based compensation arrangements, which is expected to be recognized overa weighted-average period of 1.3 years.

 

*StockOptions and Stock Appreciation Rights*

 

All stock options andstock appreciation rights (“SARS”) are approved prior to or on the date ofgrant.  Stock options and SARS aregranted at an exercise price equal to or greater than the Company’s stock priceon the date of grant.  Awards vest over aperiod of zero to three years with a contractual term of five years aftervesting.  The Company estimates the fairvalue of stock options and SARS using the Black-Scholes valuation model,consistent with the provisions of FASB guidance on Share Based Payment.  Key inputs and assumptions used to estimatethe fair value of stock options and SARS include the grant price of the award,expected option term, volatility of the Company’s stock, the risk-free rate andthe Company’s dividend yield.  Thefollowing table presents the weighted-average assumptions used in the valuationand the resulting weighted-average fair value per option or SAR award granted:

 

**StockOption and SARS Valuation Assumptions**

 
| Expected  Life *                                                                                                       |   | 3.5 to 5.5 years | ** ** |
|------------------------------------------------------------------------------------------------------------------------|--------|------------------|------------|
| Interest  Rate                                                                                                         |   | 0.44% to 1.90%   |       |
| Volatility  **                                                                                                         |   | 93% to 123%      |       |
| Dividend  Yields                                                                                                       |   | —           |       |
|                                                                                                                   |   |             |       |
| Weighted Average Fair Value of Stock Appreciation  Rights Granted During the Nine Months ended September 30, 2009 |   | $0.60            |       |

 

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*                 The expected life is the number of yearsthat the Company estimates, based upon history, that options or SARS will beoutstanding prior to exercise or forfeiture.

 

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* *  The Company’s estimates of expected volatilityare principally based on the historic volatility of the Company’s common stockover the most recent period commensurate with the estimated expected life ofthe Company’s stock options or SARS and other relevant factors.

 

The following tablesummarizes option activity under the Plans for the nine months ended September 30,2009:

 

**StockOption Activity**

 
| ** **                              | ** ** | **Weighted  Average  Exercise  Price** | ** ** | **Number  of  Shares  Under  Option** | ** ** |
|-----------------------------------------|------------|----------------------------------------|------------|---------------------------------------|------------|
| Balance  at January 1, 2009        |       | $                                      | 5.27       |                                  | 3,855,490  |   |
| Options  Granted                        |       | $                                      | 1.69       |                                  | 40,000     |   |
| Options  Exercised                      |       | $                                      | 1.00       |                                  | (100,000   | ) |
| Options  Forfeited                      |       | $                                      | 8.05       |                                  | (258,334   | ) |
| Options  Expired                        |       | $                                      | 2.82       |                                  | (415,500   | ) |
| Balance  at September 30, 2009     |       | $                                      | 5.46       |                                  | 3,121,656  |   |
|                                    |       |                                   |       |                                  |       |
| Exercisable  at September 30, 2009 |       | $                                      | 4.89       |                                  | 2,569,991  |   |

 

For the nine months endedSeptember 30, 2009, there were 450,000 SARS granted at a weighted averageexercise price of $0.84 per right, and 62,780 SARS were forfeited.  No SARS were exercised, none expired, andnone were exercisable during the nine months ended September 30,2009.    At September 30, 2009, theaggregate intrinsic value of exercisable (fully vested) options was $0.6 millionand had a weighted-average remaining contractual term of 2.8 years.

 

*StockAwards*

 

Grants of stock awardshave been made to Board members, officers, and employees.  Stock awards have been granted as performancebased, earned over a required service period or to Board members forservices.  Incentive based grantsgenerally vest and stock is received without restriction to the extent ofone-third of the stock award for each year following the date of grant.  Performance based grants are recognized ascompensation based on the probable outcome of achieving the performancecondition.  Compensation for stock awardsissued to Board members that are earned based on a required service period isrecognized over the vesting period, if any, of one to two years.  Stock awards issued to Board members thathave no required service period are recognized as compensation upon grant ofthe award.

 

The compensation expenserecognized by the Company for stock awards is based on the closing market priceof the Company’s common stock on the date of grant.  For the nine months ended September 30,2009, a total of 363,663 shares were granted to employees with a weightedaverage grant date fair value of $2.64 per share, while a total of 128,562shares were granted to Board members and the Secretary of the Company with aweighted average grant date fair value of $1.16 per share.

 

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*Summaryof Compensation Recognized Under Equity Incentives*

 

The following is asummary of compensation recognized under equity incentives for the three andnine months ended September 30, 2009 (in thousands):

 
| ** **                                                                                                                      | ** ** | **Activity  for**                       | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------|------------|
| ** **                                                                                                                      | ** ** | **Three &  Nine Months Ended** | ** ** |
| ** **                                                                                                                      | ** ** | **September 30,**                  | ** ** | **September 30,** | ** ** |
| **Stock-Based  Compensation Summary**                                                                                           | ** ** | **2009**                                | ** ** | **2009** | ** ** |
| Stock  Options                                                                                                                  |       | $                                       | 239        |   | $ | 1,167 |   |
| SARS                                                                                                                            |       | 345                                     |       | 568 |   |
| Forfeitures  related to the restructuring                                                                                       |       | —                                  |       | (567 | ) |
| Stock  Awards:                                                                                                                  |       |                                    |       |   |   |
| Vesting  over time                                                                                                              |       | 179                                     |       | 302 |   |
| Board members  and Secretary                                                                                                    |       | 119                                     |       | 574 |   |
| Total                                                                                                                           |       | $                                       | 882        |   | $ | 2,044 |   |
| The  compensation recognized under equity incentives for the nine months ended  September 30, 2009 is recorded as follows: |       |                                    |       |   |   |
| Capitalized  as Development                                                                                                     |       | $                                       | 356        |   | $ | 714 |   |
| Expensed                                                                                                                        |       | 526                                     |       | 1,330 |   |
| Total                                                                                                                           |       | $                                       | 882        |   | $ | 2,044 |   |

 

*Taxes*

 

A portion of the Company’sgranted options qualify as incentive stock options (ISO) for income taxpurposes.  As such, a tax benefit is notrecorded at the time the compensation cost related to the options is recordedfor book purposes due to the fact that an ISO does not ordinarily result in atax benefit unless there is a disqualifying disposition.  Stock option grants of non-qualified optionsresult in the creation of a deferred tax asset, which is a temporarydifference, until the time that the option is exercised.

 

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**NOTE 7 — CHANGES IN EQUITY**

 
| ** **                                                         | ** ** | **Activity for  Nine Months Ended** | ** ** |
|--------------------------------------------------------------------|------------|-------------------------------------|------------|
| **Changes in Equity**                                              | ** ** | **September 30,  2009**        | ** ** | **September 30,  2008** | ** ** |
| Total Equity December 31, 2008 & 2007, respectively  |       | $                                   | 113,048    |   | $ | 102,105 |   |
| Common stock:                                                      |       |                                |       |   |   |
| At beginning of period                                             |       | 72                                  |       | 66 |   |
| Exercised warrants                                                 |       | —                              |       | 5 |   |
| Exercised options                                                  |       | 0                                   |       | 1 |   |
| At end of period                                                   |       | 72                                  |       | 72 |   |
|                                                               |       |                                |       |   |   |
| Additional paid-in capital:                                        |       |                                |       |   |   |
| At beginning of period                                             |       | 185,179                             |       | 159,828 |   |
| Exercised warrants                                                 |       | —                              |       | 20,256 |   |
| Exercised options                                                  |       | 99                                  |       | 302 |   |
| Stock based compensation                                           |       | 1,534                               |       | 3,830 |   |
| Unvested shares earned                                             |       | —                              |       | (69 | ) |
| At end of period                                                   |       | 186,812                             |       | 184,147 |   |
| Accumulated deficit:                                               |       |                                |       |   |   |
| At beginning of period                                             |       | (72,203                             | )          | (57,789 | ) |
| Net loss                                                           |       | (8,103                              | )          | (11,826 | ) |
| At end of period                                                   |       | (80,306                             | )          | (69,615 | ) |
|                                                               |       |                                |       |   |   |
| Total Equity September 30, 2009 & 2008, respectively |       | $                                   | 106,578    |   | $ | 114,604 |   |

** **

**NOTE 8 — INCOME TAXES**

** **

At September 30, 2009 and December 31,2008, we had deferred tax assets principally arising from the net operatingloss carryforwards for income tax purposes multiplied by an expected rate of35%.  As our management cannot determinethat it is more likely than not that we will realize the benefit of thedeferred tax assets, a valuation allowance equal to the deferred tax asset hasbeen established at September 30, 2009 and December 31, 2008.  The significant components of the deferredtax asset at September 30, 2009 and December 31, 2008 were as follows(in thousands):

 

**Deferred Tax Asset Valuation**

 
| ** **                                             | ** ** | **September 30, 2009** | ** ** | **December 31, 2008** | ** ** |
|--------------------------------------------------------|------------|-----------------------------|------------|----------------------------|------------|
| Operating  loss carryforward                           |       | $                           | 118,989    |                       | $          | 94,004 |   |
| Unamortized  exploration expense                       |       | 6,651                       |       | 8,126                      |       |
| Deductible  stock-based compensation                   |       | 2,779                       |       | 2,779                      |       |
| Deductible  temporary difference                       |       | 128,419                     |       | 104,909                    |       |
| Taxable  temporary difference — development costs |       | (53,842                     | )          | (38,674                    | )          |
| Net  deductible temporary difference                   |       | 74,577                      |       | 66,235                     |       |
| Deferred  tax asset                                    |       | $                           | 26,102     |                       | $          | 23,182 |   |
| Deferred  tax asset valuation allowance                |       | $                           | (26,102    | )                          | $          | (23,182 | ) |
| Net  deferred tax asset                                |       | $                           | —     |                       | $          | — |   |

 

At September 30, 2009 and December 31,2008, we had net operating loss carryforwards of approximately $119.0 millionand $94.0 million, respectively, which expire in the years 2022 through 2029.

 

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** **

**NOTE 9—COMMITMENTS AND CONTINGENCIES**

** **

**Mt. Hope Lease Agreement**

 

The Mt. Hope Lease may be terminated upon theexpiration of its 30-year term, earlier at the election of Eureka Moly, or uponour material breach and failure to cure such breach.  If Eureka Moly terminates the lease,termination is effective 30 days after receipt by Mount Hope Mines, Inc. (“MHMI”)of written notice to terminate the Mt. Hope Lease and no further payments wouldbe due to MHMI.  In order to maintain thelease, Eureka Moly must pay certain deferral fees and advance royalties asdiscussed below.

 

The Mt. Hope Lease Agreement requires a royaltyadvance (the “Construction Royalty Advance”) of 3% of the construction capitalcost estimate upon the earliest of Eureka Moly securing project financing insufficient amounts to develop and put into operation the Mt. Hope property at aproduction level of at least 10 million pounds of annual production or October 19,2008.

 

Eureka Moly has the right to defer the ConstructionRoyalty Advance for one or two years by payment of a deferral fee (the “DeferralFee”) in the amount of $0.4 million on or before October 19, 2008 and October 19,2009 in the event project financing for the project has not been secured byeach of the dates.  On October 17,2008 Eureka Moly paid the $0.4 million Deferral Fee of October 19, 2008discussed above to MHMI thereby deferring the Construction RoyaltyAdvance.  Through September 30,2009, we have paid $3.7 million of the total Construction Royalty Advance, andthe Company paid an additional deferral fee of $0.4 million in October 2009.  Any remaining unpaid Construction RoyaltyAdvance amounts on October 19, 2011 must be paid 50% on October 19,2011 with the other 50% due on October 19, 2012.

 

Once the Construction Royalty Advance has been paidin full, Eureka Moly is obligated to pay an advance royalty (the “AnnualAdvance Royalty”) each October 19 thereafter in the amount of $0.5 millionper year.  The Construction RoyaltyAdvance and the Annual Advance Royalty are collectively referred to as the “AdvanceRoyalties”.  All Advance Royalties arecredited against the Production Royalties once the mine has achieved commercialproduction.  The Deferral Fees are notrecoverable against Production Royalties.

 

Eureka Moly is obligated to pay the ConstructionRoyalty Advance each time capital is raised for the Mt. Hope Project.  Based on the current estimate of raisingcapital and developing and operating the mine, we believe Eureka Moly’scontractual obligations under the Mt. Hope Lease Agreement will be as shown inthe following table (in thousands).  Thisestimate is based on our current estimates of the timing of securing projectfinancing and construction capital costs.

 

**DeferralFee and Advance Royalty Commitments**

 
| **Year** | ** ** | **Deferral  Fees** | ** ** | **Advance  Royalties** | ** ** | **Total** | ** ** |
|----------|------------|--------------------|------------|------------------------|------------|-----------|------------|
| 2009     |       | 350                |       | —                 |       | 350       |       |
| 2010     |       | —             |       | 22,150                 | (1)        | 22,150    |       |
| 2011     |       | —             |       | 500                    |       | 500       |       |
| 2012(2)  |       | —             |       | 500                    |       | 500       |       |
| Total    |       | $                  | 350        |                   | $          | 23,150    |       | $ | 23,500 |   |
|          |            |                    |            |                        |            |           |            |  |  |  |

 

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(1)          Assumes project financing is completed by the Companyin 2010.

 

(2)          After the mine begins production, EurekaMoly estimates that the Production Royalties will be in excess of the AnnualAdvance Royalties for the life of the project and, further, the ConstructionRoyalty Advance will be fully recovered (credited against MHMI ProductionRoyalties) by the end of 2014.

 

17

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**Deposits on project property, plant and equipment**

 

As acontinuing part of the development of the Mt. Hope Project, Eureka Moly hasplaced orders for mining and milling equipment that must be built tospecification and requires a long lead time for engineering and manufacturing.  Contractual commitments for long lead itemsrequire progress payments during the engineering and fabrication of theequipment and have cancellation penalties in the event Eureka Moly cancels thecontract.

 

At September 30,2009, we have contracts to purchase mining equipment comprised of two electricshovels and have cancelled orders for mine drills and loaders.  We have a non-binding letter of agreement on24 haul trucks that establishes our priority for delivery and provides for thethen current pricing using market indices upon initiation of an order.  We have active orders with varying stages offabrication on milling process equipment comprised of two 230kV primarytransformers and substation, a primary crusher, a semi-autogenous mill, two ballmills, and various motors for the mills. We have suspended fabrication on 16 flotation cells, lime slakingequipment, hydrocyclones, and other smaller milling process equipment with theability to re-initiate fabrication at any time. We have substantially completed negotiations with the manufacturer oftwo multi-hearth molybdenum roasters to terminate its fabrication of thisequipment and receive finished goods of the partially completed order.  We plan to re-establish a new purchase orderwith this manufacturer as additional financing is secured and equipmentprocurement is restarted under then current market terms and conditions.

 

Thefollowing table sets forth Eureka Moly’s cash commitments under mining andmilling equipment contracts (collectively, “Purchase Contracts”) at September 30,2009 (in thousands).

 

**Cash Commitments under PurchaseContracts**

 
| **Year**              | ** ** | **As of********September 30,   2009** | ** **   |
|-----------------------|------------|--------------------------------------------|--------------|
| 2009 — Remainder |       | $                                          |  2,650  |   |
| 2010                  |       | 34,117                                     |         |
| 2011                  |       | 12,350                                     |         |
| 2012                  |       | 21,121                                     |         |
| 2013                  |       | 2,406                                      |         |
| Total                 |       | $                                          |  72,644 |   |

** **

**ITEM2.           MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

** **

Referencesmade in this Quarterly Report on Form 10-Q to “we,” “our,” “us,” or the “Company,”refer to General Moly, Inc.

 

Thefollowing discussion and analysis of our financial condition and results ofoperations constitutes management’s review of the factors that affected ourfinancial and operating performance for three and nine months ended September 30,2009 and 2008.  This discussion should beread in conjunction with the consolidated financial statements and notesthereto contained elsewhere in this report and in our Annual Report on Form 10-Kfor the year ended December 31, 2008, which was filed on February 27,2009.

 

Weroutinely post important information about us on our Company website.  Our website address is www.generalmoly.com.

 

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**Overview**

 

We area development stage company and began the development of the Mt. Hope Projecton October 4, 2007.  During the yearended December 31, 2008 we also completed work on a pre-feasibility studyof our Liberty Property.  We continue toapproach the Liberty Property in a care and maintenance mode, and do not expectto spend appreciable amounts of capital on the Liberty Property until marketconditions warrant its development.

 

On October 4,2007, our Board of Directors approved the development of the Mt. Hope Projectas contemplated in our Bankable Feasibility Study.  The Company completed basic engineering ofthe Mt. Hope Project during the year ended December 31, 2008 and updatedits capital cost estimate related to the Mt. Hope Project based upon havingcompleted 30% of engineering.

 

Thedevelopment of the Mt. Hope Project has an estimated total capital requirementof $1,154.0 million including development costs of approximately $1,039.3million (in 2008 dollars) and $114.7 million in cash bonding requirements andpre-payments.  These amounts do notinclude financing costs or amounts necessary to fund operating workingcapital.  Through the nine months ended September 30,2009, we have spent approximately $132.1 million and have $58.7 millionremaining cash on hand for use in the development of the Mt. Hope Project andother cash requirements.

 

Giventhe continued uncertainty in the project finance market, low molybdenum pricesat the time, and a longer than expected timeframe to receive the federalpermits to begin construction at the Mt. Hope project, on March 26, 2009,we implemented a cash conservation plan to reduce expenditures and conservecash for 2009 and 2010 in order to maximize financial flexibility.  In addition to conserving cash, the plansimplemented seek to retain critical employees, and will retain the ability tostart construction at the Mt. Hope project pending continued improvements inthe molybdenum and capital markets.  Withour September 30, 2009 consolidated cash balance of $58.7 million, we havethe capacity to continue our current level of permitting efforts, maintainefforts to secure project financing, and secure the most critical long leadequipment for the ultimate construction of the Mt. Hope project withoutaccessing new sources of financing through the end of 2010 while maintainingthe current cash conservation strategy.

 

Oncefinancing is obtained and we have received the major operating permits and theROD from the BLM, it is expected that Mt. Hope can be constructed and inproduction within 20 months.  In theinterim, our permitting efforts are continuing full-time.  The Company has maintained its orders forgrinding, milling, and other specialty long lead equipment, although otherengineering, administrative and third-party work has been slowed or suspended.

 

Wewill continue to work with Credit Suisse and Barclays to seek project financing.   During the second quarter of 2009, theCompany engaged Cutfield Freeman & Co., a London-based financialadvisory firm, to assist the Company in primarily seeking bi-lateral agency andoff-take supported financing to potentially augment the projected bankfinancing.  We will continue evaluatingall sources of capital, including equity partners at the asset level and vendorfinancing.  Given our strong off-takeagreements and other preparatory work completed, we believe the Company is wellpositioned to execute a project finance facility upon the receipt of ROD, andas credit conditions and the molybdenum price continue to improve.

 

Overthe third quarter of 2009, spot molybdenum prices traded between approximately$10.15 and $17.45 per pound, ending the quarter at $14.13 and trading as low as$11.00 per pound more recently.  Pricefluctuations during the period were primarily attributable to changing Chinesedemand patterns.  Although Chinese crudesteel production continues at record levels, Chinese imports of molybdenum havediminished recently, causing price weakness. Prices well above the lows seen earlier this year continue to besupported by Chinese molybdenum imports, increasing steel capacity utilizationrates in developing nations, modestly improving steel capacity utilizationrates in the United States and Europe, an end to global inventory de-stocking,and molybdenum supply reductions.

 

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**Restructuring and Suspension of ProjectDevelopment**

 

Asdiscussed above, we implemented a cash conservation plan whereby total cashutilization other than equipment purchases has declined to approximately $1million per month.  Based on our currentcash on hand and our cash conservation plan, the Company expects it will haveadequate liquidity for operations, as modified, through the end of 2010 withoutaccessing new sources of financing. Engineering efforts, approximately 60% complete, have been largelysuspended pending the completion of financing. Some engineering that is critical for permitting or project restartreadiness, has continued at a slower pace.

 

TheCompany issued purchase orders for two types of equipment — milling processequipment and mining equipment.  Mostequipment orders for the custom-built grinding and other milling processequipment will be completed by the manufacturers and stored.  The grinding and milling process equipmentrequire the longest lead times and maintaining these orders is critical to theCompany’s ability to re-start the development of Mt. Hope rapidly.  Fabrication of less critical equipment hasbeen suspended with some manufacturers. With respect to the remaining millingprocess equipment, where schedule is not critical, the manufacturers haveagreed to suspend fabrication of the equipment. The Company has substantially completed negotiation with other equipmentmanufacturers to suspend or terminate fabrication of other milling equipmentand to determine the equipment fabrication costs incurred to date, storagecosts, and the expected timing of restarting fabrication.

 

Basedon our current plan, expected timetable, and the results of such negotiations,we expect to make additional payments towards purchase of this equipment ofapproximately $36.8 million under milling process equipment orders through theend of 2010, with the majority of such spending concentrated in the first halfof the year, and $4.1 million in 2011. As additional financing is secured and equipment procurement isrestarted, agreements that were suspended or terminated will be renegotiatedunder the then current market terms and conditions, as necessary.

 

Thedrills and loaders for the mine operation have been cancelled, and discussionsfor the purchase of the shovels are substantially complete with this orderremaining in place.  An agreement hasbeen reached with a truck manufacturer to hold production slots for timelydelivery.  The lead times and pricingassociated with many of these items have declined.  Once financing is secured, the Company anticipatesplacing orders for this mining equipment again. The Company will continue to evaluate all options to decrease Mt. Hope’sinitial capital requirement and facilitate a timely re-start of the projectdevelopment.

 

Thecash conservation plan also impacted General Moly employees and contractorsupport.  In March 2009, the Companyinitiated plans to reduce administrative expenses by $5 million per yearthrough a combination of compensation restructuring and position eliminations.

 

**Permitting Update**

 

The Mt.Hope Project will require both Federal and State permits before it can commenceconstruction and operations.  Majorpermits required for the Mt. Hope Project include the ROD, a BLM issued permit,the water pollution control permit and reclamation permit from the NevadaDivision of Environmental Protection—Bureau of Mining Regulation andReclamation (“BMRR”), and an air quality permit from the Nevada Division ofEnvironmental Protection— Bureau of Air Pollution Control (“BAPC”).

 

TheBLM is preparing an environmental impact statement (“EIS”) analyzing theenvironmental impacts of the Mt. Hope Project and alternatives in accordancewith the National Environmental Policy Act. Upon completion and approval of the EIS, the BLM will issue the ROD forthe Mt. Hope Project.  The ROD will beeffective on the date the BLM has recorded its decision to approve the EIS andplan of operations for the Mt. Hope Project. We currently expect to receive the ROD in the third quarter of2010.  In September 2006, the BLMdetermined that the plan of operations met the regulatory requirements withrespect to completeness and comprehensiveness. Since that time, baseline technical reports have been submitted and planof operations updates have been submitted to accommodate additional detailbased on progression of project design. All technical reports that form the basis of the EIS have 

 

20

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been submitted to the BLM for approval at the time ofthis filing.  Final approval by the BLMof the technical reports will allow the completion of a draft EIS, which willthen be open to additional public review and comment.  Public comment will then be considered and ifwarranted by the BLM will be incorporated into the draft for publication of aFinal EIS.

 

Theother time critical State permits have also been submitted for agency reviewand approval at the time of this filing. We believe these other major operating permits will be received on orprior to the effective date of the ROD.

 

Althoughwe currently are targeting the effectiveness of the ROD and the receipt of allmajor operating permits to occur in approximately the second half of 2010,circumstances beyond our control, including reviewing - agency delays orrequests for additional information or studies, and appeals of the BLMdecision, could cause the effectiveness of the ROD to be delayed.  The occurrence of any or a combination ofthese adverse circumstances may increase the estimated costs of development,require us to obtain additional interim financing, and / or  delay our ability to consummate projectfinancing or other significant financing. A delay in the ROD or the receipt of major operating permits alsoaffects the satisfaction of the ROD Contribution Conditions, extends the timefor the receipt of POS-Minerals third contribution, if any, and may affect thecontingent obligation of Eureka Moly to refund capital contributions toPOS-Minerals and the amount of any such refund. See “—The Mt. Hope Project” below.

 

**Water Rights Update**

 

On March 26,2009, the Nevada State Engineer approved the Company’s previously filed waterapplications that requested mining and milling use of 11,300 acre feet annuallyof water to be drawn from a well field near the Mt. Hope project in Kobeh Valley.  This ruling, combined with actual pump testsconducted in late 2008 that confirmed well pumping rates in Kobeh Valley, isanticipated to meet the Mt. Hope project’s life-of-mine water requirements ofapproximately 7,000 gallons per minute.

 

Subsequentto that ruling and the Company’s announcement thereof, two appeals were filedwith the Seventh Judicial District Court of the State of Nevada to challengethe State Engineer’s decision.  Asuccessful appeal could have a material negative impact on the Mt. Hopeproject.  In September, the appellantsfiled their opening briefs.  The Companyhas reviewed the appellants’ briefs and believes them to contain the samearguments as the original protests.  Wehave submitted our Answering Brief and now expect a final brief by theappellants by the end of 2009, after which a District Judge will hear OralArguments.  We now anticipate that theappeal will be ruled upon by the District Judge in the first quarter of 2010.  The appellants maintain the right to advancethe appeal to the State of Nevada Supreme Court.

 

Althoughthe water application approvals are under appeal, the State Engineer issued theCompany all water permits on July 21, 2009, providing the legal andregulatory authority to the use of the 11,300 acre feet annually of water forour mining operations.

 

**The Mt. Hope Project**

 

Effectiveas of January 1, 2008, we contributed all of our interest in the assetsrelated to the Mt. Hope Project, including the Mt. Hope Lease, to Eureka Moly,and in February 2008 entered into the LLC Agreement withPOS-Minerals.  Under the terms of the LLCAgreement, POS-Minerals owns a 20% interest in Eureka Moly, and General Moly,through a subsidiary, owns an 80% interest. These ownership interests and/orthe required contributions under the LLC Agreement can change as discussedbelow.

 

Pursuantto the terms of the LLC Agreement, POS-Minerals made its Initial Contributionsto the LLC totaling $100.0 million during the year ended December 31,2008.  Additional amounts will be due fromPOS-Minerals within 15 days after the date the ROD Contribution Conditions havebeen satisfied.  The ROD ContributionConditions are the receipt of major operating permits for the project, that theROD has become effective, and any administrative or judicial appeals withrespect thereto are final.  See “—PermittingUpdate” above for a discussion of the status of permitting.

 

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Ourcurrent forecast of the ROD Contribution Date occurring after December 31,2009 allows POS-Minerals to elect to either retain its 20% share bycontributing an additional $56.0 million plus its 20% share of all LLC costsincurred from the Closing Date to the ROD Contribution Date or reduce itsownership interest to 13% and fund its remaining 13% share of all LLC costsincurred from the Closing Date to the ROD Contribution Date.  Such an election has not been made byPOS-Minerals, but is required to be made prior to January 31, 2010.

 

Inaddition, if commercial production at the Mt. Hope Project is not achieved by December 31,2011 for reasons other than a force majeure event, Eureka Moly may be requiredto return to POS-Minerals a portion of its contributions to the LLC, with nocorresponding reduction in POS-Minerals’ ownership percentage, based on itselection prior to January 31, 2010 as to its third contribution.  Based on our current plan and expectedtimetable, it is unlikely the Mt. Hope Project will achieve commercialproduction by December 31, 2011.  IfPOS-Minerals elects to retain its 20% interest and makes its additional $56.0million contribution, the return of contributions will be $36.0 million.  If POS-Minerals elects to retain its 20%interest but does not make its additional $56.0 million contribution, thereturn of contributions will be zero. If POS-Minerals elects to reduce itsownership interest to 13%, the return of contributions will be $33.0million.  Such return of contributions isrequired to be made on or prior to January 27, 2012.  Our subsidiary that holds our interest in theLLC is obligated under the terms of the LLC Agreement to make capitalcontributions to fund the return of contributions to POS-Minerals, ifrequired.  If our subsidiary does notmake these capital contributions, POS-Minerals has an election to either take asecured interest in the LLC via a loan, or receive an additional interest inthe LLC of approximately 5%.  In thelatter case, our interest in the LLC is subject to dilution based on theDilution Formula, calculated as a percentage equal to the ratio of 1.5 timesthe amount of such unpaid contributions, over the aggregate amount of deemedcapital contributions (as determined under the LLC Agreement) of both partiesto the LLC.  At September 30, 2009,the aggregate amount of deemed capital contributions of both parties was $950million.

 

Furthermore, a provision in the LLC Agreement permitsPOS-Minerals theoption to put its interest in the LLC to the Company’s subsidiary, Nevada Moly,upon  a change of control of the Company,as defined in the LLC agreement, followed by (i) failure to begin fullconstruction at the LLC by the Company or the surviving entity before December 31,2010, or (ii) failure to use standard mining industry practice inconnection with development and operation of the project as contemplated by theparties for a period of twelve months after December 31, 2010.  If POS-Minerals put its interest, Nevada Molywould be required to purchase the interest for 120 percent of POS-Mineralscontributions to the LLC plus 10 percent interest.

 

The Initial Contributions of $100.0 million that weremade by POS-Minerals during 2008 were expended by the second quarter of 2009 inaccordance with the program and budget requirements of the Mt. HopeProject.  We are required, pursuant to theterms of the LLC Agreement, to advance funds required to pay costs for thedevelopment of the Mt. Hope Project that exceed the Initial Contributions untilthe ROD Contribution Date, at which point the contributions described above tobe made by POS-Minerals will be applied to reimburse us for POS-Minerals’ shareof such development costs.  All costsincurred after the ROD Contribution Date will be allocated and funded pro ratabased on each party’s ownership interest. The interest of a party in the LLC that does not make its pro ratacapital contributions to fund costs incurred after the ROD Contribution Date issubject to dilution based on the Dilution Formula.

 

**Liquidity, Capital Resources and CapitalRequirements**

 

*For theperiod from December 31, 2008 to September30, 2009*

 

Ourtotal consolidated cash balance at September 30, 2009 was $58.7 millioncompared to $92.4 million at December 31, 2008.  The decrease in our cash balances for thenine months ended September 30, 2009 was due primarily to developmentcosts incurred of $17.1 million, deposits on property plant and equipmenttotaling $8.7 million, and general and administrative costs of $7.7million.  Deposits on property, plant andequipment relate primarily to scheduled payments for long lead time equipmentfor the Mt. Hope Project.  See “—Contractual Obligations” below.

 

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Asdiscussed above under “— Permitting and Water Rights Update”, we currentlyanticipate the effectiveness of the ROD and the satisfaction of the RODContribution Conditions to occur in the third quarter of 2010, butcircumstances beyond our control could cause the effectiveness of the ROD and /or the satisfaction of the ROD Contribution Conditions to be delayed.  We estimate that this will delay theachievement of the ROD Contribution Date to the second half of 2010 and allowPOS-Minerals to elect to pay $56.0 million plus its 20% share of LLC costsincurred from the Closing Date to the ROD Contribution Date to retain its 20% shareof the LLC or alternatively, to reduce its interest from 20% to 13%, in whichcase POS-Minerals would fund its 13% share of costs incurred from the ClosingDate to the ROD Contribution Date.

 

Asdiscussed above under “— Restructuring and Suspension of Project Development”,we have suspended engineering efforts and mining and most milling processequipment purchases for the Mt. Hope Project until such time as we can obtainadditional financing.  We are continuingto evaluate a number of potential sources for capital, including thepossibility of a sale of additional minority interest in the Mt. Hope Project,additional support from current strategic partners, off-take related debt, anddebt from private investment groups, as well as the capital markets.

 

Withour cash conservation plan, our non-equipment related cash requirements havedeclined to approximately $1 million per month. Based on our current plan and expected timetable, we expect to makeadditional payments of approximately $36.8 million under milling processequipment orders through the end of 2010, with the majority of such spendingconcentrated in the first half of the year, and $4.1 million in 2011.  As additional financing is secured andequipment procurement is restarted, agreements that were suspended orterminated will be renegotiated under current market terms and conditions, asnecessary.  Accordingly, based on ourcurrent cash on hand and our cash conservation plan, the Company expects itwill have adequate liquidity for operations, as modified and based onsuccessful renegotiation of mining equipment contracts, through the year ended December 31,2010 without accessing new sources of financing while maintaining the currentcash conservation strategy.

 

Oncethe ROD is effective, additional capital will be required through thecommencement of commercial production at the Mt. Hope Project.  Our ability to develop the project isdependent on, among other things, our ability to raise the necessary capital tofund the Mt. Hope Project both in sufficient amount and in a timelymanner.  Additionally, if the currentlyestimated costs of the Mt. Hope Project are exceeded we will need to raiseadditional capital to fund such overruns. The Company is currently, and will on an ongoing basis be, pursuing themost efficient sources of funding for the project including, but not limitedto, the equity markets, the bank project finance markets and the high yieldcapital debt markets.

 

Thecash needs for the development of the Mt. Hope Project require that we orEureka Moly obtain project financing or other significant financing in additionto the capital contributions anticipated to be received from POS-Minerals.  The aggregate amount of additional financingrequired for the development of the Mt. Hope Project, minus the amountsanticipated to be received from POS-Minerals on the ROD Contribution Date isanticipated to range between $715 million and $850 million depending on theelection made by POS-Minerals concerning its future contributions.  These amounts do not include financing costsor amounts necessary to fund operating working capital.  During 2008, we engaged Barclays Capital andCredit Suisse Securities (USA) LLC to assist in our efforts to pursue projectfinancing for the Mt. Hope Project.  Inthe second quarter of 2009, the Company engaged Cutfield Freeman &Co., a London-based financial advisory firm, to assist the Company in primarilyseeking bi-lateral agency and off-take financing to potentially augment theprojected bank financing.  Our ability toobtain such project and / or agency financing depends on the effectiveness andthe timing of the ROD, the anticipated price of molybdenum, our projectedoperating costs and the overall state of the economy and the credit markets.

 

The2008 disruptions in national and international credit markets have led tovolatile conditions.  There is a scarcityof credit and lenders are imposing tighter lending standards and higherinterest costs for loans.  Our ability toobtain the necessary funding for the Mt. Hope Project as well as the terms forsuch funding may be adversely affected by these disruptions in the creditmarkets.  We may not be able to obtainthe necessary financing for the Mt. Hope Project in a timely manner, oncustomary or favorable terms, or at all.

 

Wealso require additional capital to maintain our mining claims and other rightsrelated to the Liberty Property, as well as continue payment of ongoing generaland administrative costs associated with supporting our planned operations.

 

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**Resultsof Operations**

 

*Three months ended September 30, 2009 comparedto three months ended September 30, 2008*

 

Forthe three months ended September 30, 2009 we had a consolidated net lossof $2.4 million compared with a net loss of $2.8 million in the same period for2008.

 

Forthe three months ended September 30, 2009 and 2008, exploration andevaluation expenses were $0.3 million and $1.1 million, respectively.  For the three months ended September 30,2008 we incurred exploration and evaluation costs on the Liberty Propertyassociated with ongoing pre-feasibility studies.  For the three months ended September 30,2009 the Liberty Property has been on a care and maintenance status, and,accordingly, the resulting exploration and evaluation expenses are considerablylower for the period.

 

Forthe three months ended September 30, 2009 and 2008, general andadministrative expenses were $2.1 million and $2.2 million, respectively.  For the three months ended September 30,2009, the decline in costs compared to the previous year relates to theimplementation of our cash conservation plan.

 

*Nine months ended September 30, 2009 comparedto nine months ended September 30, 2008*

 

Forthe nine months ended September 30, 2009 we had a consolidated net loss of$8.3 million compared with a net loss of $11.8 million in the same period for2008.

 

Forthe nine months ended September 30, 2009 and 2008, exploration andevaluation expenses were $0.6 million and $5.2 million, respectively.  For the nine months ended September 30,2008 we incurred exploration and evaluation costs on the Liberty Property as wecompleted a pre-feasibility study on the Liberty Property in April 2008.  For the nine months ended September 30,2009 the Liberty Property has been on a care and maintenance status, and,accordingly, the resulting exploration and evaluation expenses are considerablylower for the period.

 

Forthe nine months ended September 30, 2009 and 2008, general andadministrative expenses were $7.7 million and $8.1 million, respectively.  For the nine months ended September 30,2009 restructuring costs resulting from the implementation of our cashconservation plan are included in general and administrative expenses.  In March 2009 we incurred costs relatedto one-time employee termination benefits totaling $0.8 million.  The majority of the affected employees werenot required to render service beyond 60 days, and accordingly, costsassociated with these one-time termination benefits were recognized in March 2009.  Additional costs of $0.1 million wererecognized during the second quarter, for those few affected employees whorendered services beyond 60 days.

 

Wealso incurred approximately $0.7 million in equipment contract cancellationcosts through the third quarter of 2009. Such costs were a combination of deposits forfeited and costs to cancelcontracts.

 

Interestincome was nil for the nine months ended September 30, 2009 compared with$1.0 million in 2008 as a result of substantially lower interest rates, andlower cash balances in 2009 compared with the corresponding periods in 2008.

 

**Contractual Obligations**

 

As acontinuing part of the development of the Mt. Hope Project, Eureka Moly hasplaced orders for mining and milling equipment that must be built tospecification and require long lead times for engineering andmanufacturing.  Contractual commitmentsfor long lead items require progress payments during the engineering andfabrication of the equipment and have cancellation penalties in the eventEureka Moly cancels the contract.

 

At September 30,2009, we have contracts to purchase mining equipment comprised of two electricshovels and have cancelled orders for mine drills and loaders.  We have a non-binding letter of agreement on24 haul trucks that establishes our priority for delivery and provides for thethen current pricing using market indices upon initiation of 

 

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an order.  Wehave active orders with varying stages of fabrication on milling processequipment comprised of two 230kV primary transformers and substation, a primarycrusher, a semi-autogenous mill, two ball mills, and various motors for themills.  We have suspended fabrication on16 flotation cells, lime slaking equipment, hydrocyclones, and other smaller millingprocess equipment with the ability to re-initiate fabrication at any time.  We have substantially completed negotiationswith the manufacturer of two multi-hearth molybdenum roasters to terminate itsfabrication of this equipment and receive finished goods of the partiallycompleted order.  We plan to re-establisha new purchase order with this manufacturer as additional financing is securedand equipment procurement is restarted under then current market terms andconditions.

 

Thefollowing table sets forth Eureka Moly’s cash commitments under mining andmilling Purchase Contracts at September 30, 2009 (in millions).

 

**CashCommitments under Purchase Contracts**

 
| **Period**            | ** ** | **As of********September 30, 2009** | ** ** |
|-----------------------|------------|------------------------------------------|------------|
| 4th Quarter 2009 |       | 2.7                                      |       |
| 2010                  |       | 34.1                                     |       |
| 2011                  |       | 12.3                                     |       |
| 2012                  |       | 21.1                                     |       |
| 2013                  |       | 2.4                                      |       |
| Total                 |       | $                                        | 72.6       |   |
|                       |            |                                          |            |  |

 

Cashcommitments under Purchase Contracts are inclusive of $40.9 million undermilling process equipment orders (approximately $36.8 million due through theend of 2010, and $4.1 million in 2011), and $31.7 million in mining equipmentorders.

 

Wealso incurred approximately $0.7 million in equipment contract cancellationcosts during the nine months ended September 30, 2009.  Such costs were a combination of depositsforfeited and costs to cancel contracts. We also estimate that we will be required to pay approximately $0.7million in additional insurance and handling costs, related to the custom-buildgrinding and other milling process equipment. Based on our current plan, expected timetable, and the results of suchnegotiations, we expect to make additional payments of approximately $36.8million under these milling process equipment orders through the end of 2010,and $4.1 million in 2011.  As additionalfinancing is secured and equipment procurement is restarted, agreements thatwere suspended or terminated will be renegotiated under the then current marketterms and conditions, as necessary.

 

**ITEM3.           QUANTITATIVEAND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

** **

**CommodityPrice Risk**

** **

We area development stage company in the business of the exploration, development andmining of properties primarily containing molybdenum.  As a result, upon commencement of production,our financial performance could be materially affected by fluctuations in themarket price of molybdenum and other metals we may mine.  The market prices of metals can fluctuatewidely due to a number of factors.  Thesefactors include fluctuations with respect to the rate of inflation, theexchange rates of the U.S. dollar and other currencies, interest rates, globalor regional political and economic conditions, banking environment, global andregional demand, production costs, and investor sentiment.

 

Inorder to better manage commodity price risk and to seek to reduce the negativeimpact of fluctuations in prices, we will seek to enter into long term supplycontracts.  On December 28, 2007, weentered into a molybdenum supply agreement with ArcelorMittal that provides forArcelorMittal to purchase 6.5 million pounds of 

 

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molybdenum per year, plus or minus 10%, once the Mt.Hope Project commences commercial operations at minimum specified levels. Thesupply agreement provides for a floor price along with a discount for spotprices above the floor price and expires five years after the commencement ofcommercial production at the Mt. Hope Project. Both the floor and threshold levels at which the percentage discountschange are indexed to a producer price index.

 

Additionally,on May 14, 2008, we entered into a molybdenum supply agreement with SeAHBesteel Corporation (“SeAH Besteel”), Korea’s largest manufacturer of specialtysteels, which provides for SeAH Besteel to purchase 4.0 million pounds ofmolybdenum per year, plus or minus 10%, once the Mt. Hope Project commencescommercial operations at minimum specified levels. Like the ArcelorMittalsupply agreement, the supply agreement with SeAH Besteel provides for a floorprice along with staged discounts for spot prices above the floor price and expiresfive years from the date of first supply under the agreement.  Both the floor and threshold levels at whichthe percentage discounts change are indexed to a producer price index.

 

On August 8,2008, the Company entered into a molybdenum supply agreement (the “SojitzAgreement”) with Sojitz Corporation.  TheSojitz Agreement provides for the supply of 5.0 million pounds per year ofmolybdenum for five years, beginning once the Mt. Hope Project reaches certainminimum commercial production levels. One million annual pounds sold under the Sojitz Agreement will besubject to a per-pound molybdenum floor price and is offset by a flat discountto spot moly prices above the floor.  Theremaining 4.0 million annual pounds sold under the Sojitz Agreement will besold with reference to spot moly prices without regard to a floor price.  The Sojitz Agreement includes a provision forcancellation in the event that supply from the Mt. Hope Project has not begunby January 1, 2013.

 

Allthree long term supply agreements provide for supply only after commercialproduction levels are achieved, and no provisions require the Company todeliver product or make any payments if commercial production is neverachieved, or declines in later periods. The agreements require that monthly shortfalls be made up only if theCompany’s portion of Mt. Hope production is available for delivery, afterPOS-Minerals has taken its share.  In noevent do these requirements to make up monthly shortfalls become obligations ofthe Company if production does not meet targeted levels.

 

Furthermore,each of the agreements have take-or-pay provisions that require the buyers toeither take delivery of product made available by the Company, or to pay asthough they had taken delivery pursuant to the term of the agreements.

 

Whilewe have not used derivative financial instruments in the past, we may elect toenter into derivative financial instruments to manage commodity pricerisk.  We have not entered into anymarket risk sensitive instruments for trading or speculative purposes and donot expect to enter into derivative or other financial instruments for tradingor speculative purposes.

 

**Interest Rate Risk**

 

As of September 30,2009, we had a balance of cash and cash equivalents and restricted cash of $58.7million.  Interest rates on short term,highly liquid investments have not changed materially since December 31,2008 and continue to be 1% or less on an annualized basis. If and to the extentthat these funds were invested in interest bearing instruments during theentire nine month period ended September 30, 2009, a hypothetical 1% pointdecrease in the rate of interest earned on these funds would reduce interestincome to nil for the nine month period ended September 30, 2009.

** **

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** **

**ITEM4.           CONTROLSAND PROCEDURES**

** **

The Companymaintains disclosure controls and procedures that are designed to ensure thatinformation required to be disclosed in the reports that the Company files orsubmits as defined in Rules 13a-15(e) of the Securities and ExchangeAct of 1934, as amended (“Exchange Act”) is recorded, processed, summarized andreported within the time periods specified in the Securities and ExchangeCommission (“SEC”) rules and forms, and that such information isaccumulated and communicated to the Chief Executive Officer (“CEO”) and ChiefFinancial Officer (“CFO”) to allow timely decisions regarding requireddisclosures.

 

The Company, underthe supervision and with the participation of management, including the CEO andCFO, evaluated the effectiveness of the design and operation of our disclosurecontrols and procedures (as defined in Rule 13a-15(e) under theSecurities Exchange Act of 1934) as of March 31, 2009 and June 30,2009 (“Evaluation Dates”). Based on our initial evaluation, our CEO and CFOconcluded that our disclosure controls and procedures were effective as of theEvaluation Dates.

 

However,subsequent to the Evaluation Dates, as reported under Item 4.02 of the Form 8-Kfiled by the Company on November 9, 2009, on November 3, 2009, themanagement of the Company concluded that the Company’s financial statements asof and for the period from March 31, 2009 and June 30, 2009 asincluded in the Company’s Reports on Form 10-Q for such periods should nolonger be relied upon and should be restated to correct for errors detected bymanagement. The Company is filing amendments to its Quarterly Reports on Form 10-Qfor the quarterly periods ended March 31, 2009 and June 30, 2009 as aresult of these restatements.

 

Accordingly,subsequent to the Evaluation Dates, management of the Company identified adeficiency in our disclosure controls and procedures.   We determined that our****unaudited consolidated financialstatements for the three months ended March 31, 2009 and the three and sixmonths ended June 30, 2009 contained an error with respect to the balancesheet classification of the POS-Minerals interest in Eureka Moly, LLC (the “LLC”).We classified the POS-Minerals interest as noncontrolling interest as of March 31,2009 and June 30, 2009 (and as minority interest within temporary equityas of December 31, 2008 prior to our implementation of FASB guidance forNoncontrolling Interests).  After  completion of a recent review and evaluation of the related LLC agreement  with POS-Minerals , management determinedthat POS-Minerals interest in the LLC is more appropriately  classified as temporary equity because of aprovision in the LLC Agreement that permits POS-Minerals the option to put its interest in the LLC to theCompany’s subsidiary, Nevada Moly, upon a change of control of the Company, as defined in the LLC agreement,followed by (i) failure to begin full construction at the LLC by theCompany or the surviving entity before December 31, 2010, or (ii) failureto use standard mining industry practice in connection with development andoperation of the project as contemplated by the parties for a period of twelvemonths after December 31, 2010.  Dueto the significance of this error, we will be restating our financialstatements for the quarters ended March 31, 2009 and June 30, 2009and have reflected this restatement in this report for the quarterly and ninemonth periods ended September 30, 2009. Based on this evaluation, our CEO and CFO  concluded that our disclosure controls andprocedures were not effective as of the end of the period covered by thisreport.

 

Managementconcluded the reason for this error primarily related to the lack of technicalaccounting expertise relating to interpretation of GAAP with respect to equityinstruments with redemption characteristics.

 

We have taken measures to establish effective disclosure controls and procedures and internal control over financial reporting, including reviewing all equity instruments to identify any securities that may have to be classified between liabilities and equity (in the mezzanine section), as contingently redeemable noncontrolling interests, and implementing policies and procedures for the accounting of these securities.

 

On November 3,2009, management, as a result of its ongoing evaluation of the effectiveness ofthe Company’s “disclosure controls and procedures” (as defined in the ExchangeAct) Rules 13a-15(e) and 15d-15(e)) and “internal control overfinancial reporting” (as defined in the Exchange Act Rules 13a-15(f) and15d-15(f)), concluded the control deficiency disclosed in this Item 4 had beenaddressed and remediated.

 

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Therewere no other changes in our internal control over financial reporting thatoccurred during the quarter ended September 30, 2009 that have materiallyaffected, or are reasonably likely to materially affect, our internal controlover financial reporting.

 

**PART II**

** **

**OTHER INFORMATION**

** **

**ITEM 1.**           **LEGAL PROCEEDINGS**

 

On March 26,2009, the Nevada State Engineer approved the Company’s previously filed waterapplications that requested mining and milling use of 11,300 acre feet annuallyof water to be drawn from a well field near the Mt. Hope project in KobehValley.  This ruling, combined withactual pump tests conducted in late 2008 that confirmed well pumping rates inKobeh Valley, is anticipated to meet the Mt. Hope project’s life-of-mine waterrequirements of approximately 7,000 gallons per minute.

 

Subsequentto that ruling and the Company’s announcement thereof, two appeals were filedin April of 2009 with the Seventh Judicial District Court of the State ofNevada to challenge the State Engineer’s decision.  A successful appeal could have a materialnegative impact on the Mt. Hope project. In September, the appellants filed their opening briefs.  The Company has reviewed the appellants’briefs and believes them to contain the same arguments as the originalprotests.  We have submitted our AnsweringBrief and now expect a final brief by the appellants in December, after which acourt date to hear Oral Arguments will be established.  We now anticipate that the appeal will beruled upon by the District Judge in the first quarter of 2010.  The appellants maintain the right to advancethe appeal to the State of Nevada Supreme Court.

 

Althoughthe water application approvals are under appeal, the State Engineer issued theCompany all water permits on July 21, 2009, providing the legal andregulatory authority to the use of the 11,300 acre feet annually of water forour mining operations.

 

**ITEM1A.           RISKFACTORS.**

** **

OurAnnual Report on Form 10-K for the year ended December 31, 2008,including the discussion under the heading “Risk Factors” therein, and thisreport describe risks that may materially and adversely affect our business,results of operations or financial condition. The risks described in our Annual Report on Form 10-K and thisreport are not the only risks facing us. Additional risks and uncertainties notcurrently known to us or that we currently deem to be immaterial also maymaterially adversely affect our business, financial condition and/oroperations.

 

**Special NoteRegarding Forward-Looking Statements**

** **

Certainstatements in this report may constitute forward-looking statements, whichinvolve known and unknown risks, uncertainties and other factors, which maycause actual results, performance or achievements of our Company, the Mt. HopeProject, Liberty Property and our other projects, or industry results, to bematerially different from any future results, performance or achievementsexpressed or implied by such forward-looking statements.  We use the words “may,” “will,” “believe,” “expect,”“anticipate,” “intend,” “future,” “plan,” “estimate,” “potential” and othersimilar expressions to identify forward-looking statements.  These forward-looking statements are subjectto a number of risks, uncertainties and assumptions that could cause actualresults to differ materially from those in the forward looking statements. Suchrisks, uncertainties and assumptions are described in the “Risk Factors”section included in our Annual Report on Form 10-K for the year ended December 31,2008 and this report, and include, among other things:

 

·                  our dependence on the success of the Mt. Hope Project;

·                  the ability to obtain all required permits and approvals for the Mt.Hope Project and the Liberty Property;

·                  issues related to the management of the Mt. Hope Project pursuant tothe LLC Agreement;

·                  risks related to the failure of POS-Minerals to make contributionspursuant to the LLC Agreement;

·                  fluctuations in the market price of, and demand for, molybdenum andother metals;

 

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·                  the estimation and realization of mineral reserves, if any;

·                  the timing of exploration, development and production activities andestimated future production, if any;

·                  estimates related to costs of production, capital, operating andexploration expenditures;

·                  requirements for additional capital and the possible sources of suchcapital;

·                  government regulation of mining operations, environmental conditionsand risks, reclamation and rehabilitation expenses;

·                  title disputes or claims; and

·                  limitations of insurance coverage.

 

Youshould not place undue reliance on these forward-looking statements, whichspeak only as of the date of this report. These forward-looking statements are based on our current expectationsand are subject to a number of risks and uncertainties, including those setforth above.  Although we believe thatthe expectations reflected in these forward-looking statements are reasonable,our actual results could differ materially from those expressed in theseforward-looking statements, and any events anticipated in the forward-lookingstatements may not actually occur. Except as required by law, we undertake no duty to update anyforward-looking statements after the date of this report to conform thosestatements to actual results or to reflect the occurrence of unanticipatedevents.  We qualify all forward-lookingstatements contained in this report by the foregoing cautionary statements.

 

**ITEM2.          UNREGISTERED SALES OF EQUITYSECURITIES AND USE OF PROCEEDS**

** **

None.

 

**ITEM3.          DEFAULTS UPON SENIORSECURITIES**

** **

None.

 

**ITEM4.          SUBMISSION OF MATTERS TO AVOTE OF SECURITY HOLDERS**

** **

None.

 

**ITEM5.          OTHER INFORMATION**

** **

None.

 

**ITEM6.          EXHIBITS**

 
| **Exhibit  Number** | ** ** | **Description of Exhibit**                                                                                |
|---------------------|------------|-----------------------------------------------------------------------------------------------------------|
| 31.1                |       | Certification of Chief  Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of  2002 |
| 31.2                |       | Certification of Chief  Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of  2002 |
| 32.1                |       | Certification of Chief  Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of  2002 |
| 32.2                |       | Certification of Chief  Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of  2002 |

 

**SIGNATURES**

 

Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned, thereuntoduly authorized.

 

Dated: November 9, 2009

 
|   | GENERAL  MOLY, INC. |
|--------|---------------------|
|   |
|   | By:                 | /s/  David A. Chaput |
|   |                | David  A. Chaput |
|   |                | Chief  Financial Officer and |
|   |                | Duly  Authorized Officer |

 

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