**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-Q/A**

 

**Amendment No. 1**

** **

**x****      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934**

 

**For thequarterly period ended June 30, 2009**

 

**o****         TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934**

** **

**For the transitionperiod from             to              **

** **

**Commission FileNumber: 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**(Addressand telephone number of principal executive offices)

** **

Indicate by check markwhether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and (2) has been subject to such filing requirements for at least the past90 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**

 

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company. See the definitions of“large accelerated filer,” “accelerated filer” and “smaller reporting 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 July 31, 2009 was72,376,538.

 

 

 

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**GENERAL MOLY, INC.**

**EXPLANATORYNOTE**

 

General Moly, Inc.(“the Company”) is filing this amendment to its Quarterly Report on Form 10-Qfor the period ended June 30, 2009, originally filed with the Securitiesand Exchange Commission (“SEC”) on August 4, 2009 to restate itspresentation of noncontrolling interest in the Consolidated Balance Sheets andin the Consolidated Statements of Operations.

 

As disclosed in theCompany’s Form 8-K filed with the SEC on November 9, 2009, theCompany****determined that itsunaudited consolidated financial statements for the three and six months ended June 30,2009 contained an error with respect to the balance sheet classification of thePOS-Minerals interest in Eureka Moly, LLC (the “LLC”). We classified thePOS-Minerals interest as noncontrolling interest as of June 30, 2009 (andas minority interest within temporary equity as of December 31, 2008 priorto our implementation of FASB guidance for Noncontrolling Interests). After completion of a recent review and evaluation of the related LLC agreementwith POS-Minerals, management determined that POS-Minerals interest in the LLCis more appropriately classified as temporary equity because of a provision inthe LLC Agreement that permits POS-Minerals the option to put its interest inthe LLC to the Company’s subsidiary, Nevada Moly, upon a change of control ofthe Company, as defined in the LLC agreement, followed by (i) failure tobegin 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.  If POS-Minerals put its interest, Nevada Moly would be required topurchase the interest for 120 percent of POS-Minerals contributions to the LLCplus 10 percent interest.

 

The following items ofthe Quarterly Report on Form 10-Q for the period ended June 30, 2009are being amended:

 

·       Part I — Item 1. Financial Statements

 

·       Part I — Item 2. Management’s Discussion andAnalysis of Financial Condition and Results of Operations

 

·       Part I — Item 4. Controls and Procedures

 

·       Part II — Item 6. Exhibits

 

All other informationcontained in the Company’s Quarterly Report on Form 10-Q for the periodended June 30, 2009 remains unchanged. As the Company adopted FASB-issued guidance for Subsequent Events forthe interim period ended June 30, 2009, all subsequent events have beenevaluated through December 9, 2009, the filing date of this Form 10-Q/A.Without limitation tothe foregoing, this filing does not purport to update the Management’sDiscussion and Analysis of Financial Condition and Results of Operationscontained in the Quarterly Report on Form 10-Q for the period ended June 30,2009 or any information, uncertainties, transactions, risks, events or trendsoccurring, or known to management. For updated information about the Company,refer to the Company’s most recent filings with the SEC. Those filings containimportant information regarding events, developments and updates to certainexpectations of the Company that have occurred since the original filing of theQuarterly Report.

 

2

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**PART I -FINANCIAL INFORMATION**

** **

**ITEM 1.  FINANCIALSTATEMENTS**

 

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

** **

**(Dollars inthousands except per share amounts)**

 
| ** **                                                                                                                                  | ** ** | **June 30, 2009  Unaudited  As Restated, Note 1A** | ** ** | **December 31,  2008** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------|------------|-----------------------------|------------|
| **ASSETS**                                                                                                                                  | ** ** | ** **                                              | ** ** | ** **                  | ** ** |
| CURRENT ASSETS                                                                                                                              |       |                                                    |       |                        |       |
| Cash and cash equivalents                                                                                                                   |       | $                                                       | 69,968     |                        | $          | 78,462 |   |
| Restricted cash — Eureka Moly, LLC                                                                                                     |       | 131                                                     |       | 13,915                      |       |
| Deposits, prepaid expenses and other current  assets                                                                                        |       | 319                                                     |       | 326                         |       |
| Total Current Assets                                                                                                                        |       | 70,418                                                  |       | 92,703                      |       |
| Mining properties, land and water rights (Note 4)                                                                                           |       | 95,894                                                  |       | 79,292                      |       |
| Deposits on project property, plant and equipment                                                                                           |       | 32,468                                                  |       | 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                                                                                                      |       | 658                                                     |       | 763                         |       |
| Other assets                                                                                                                                |       | 2,994                                                   |       | 2,994                       |       |
| TOTAL ASSETS                                                                                                                                |       | $                                                       | 215,851    |                        | $          | 220,929 |   |
| ** **                                                                                                                                  |       |                                                    |       |                        |       |
| **LIABILITIES, CONTINGENTLY  REDEEMABLE NONCONTROLLING INTEREST, AND EQUITY**                                                               |       |                                                    |       |                        |       |
| CURRENT LIABILITIES                                                                                                                         |       |                                                    |       |                        |       |
| Accounts payable and accrued liabilities                                                                                                    |       | $                                                       | 7,038      |                        | $          | 6,692 |   |
| Current portion of long term debt                                                                                                           |       | 126                                                     |       | 128                         |       |
| Total Current Liabilities                                                                                                                   |       | 7,164                                                   |       | 6,820                       |       |
| Provision for post closure reclamation and  remediation costs                                                                               |       | 586                                                     |       | 731                         |       |
| Deferred revenue                                                                                                                            |       | 100                                                     |       | —                      |       |
| Long term debt, net of current portion                                                                                                      |       | 267                                                     |       | 330                         |       |
| Total Liabilities                                                                                                                           |       | 8,117                                                   |       | 7,881                       |       |
|                                                                                                                                        |       |                                                    |       |                        |       |
| COMMITMENTS AND CONTINGENCIES (Note 9)                                                                                                      |       | —                                                  |       | —                      |       |
|                                                                                                                                        |       |                                                    |       |                        |       |
| CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST                                                                                             |       | 99,761                                                  |       | 100,000                     |       |
|                                                                                                                                        |       |                                                    |       |                        |       |
| EQUITY                                                                                                                                      |       |                                                    |       |                        |       |
| General Moly, Inc. stockholders’ equity                                                                                           |       |                                                    |       |                        |       |
| Preferred stock, Series A, $0.001 par value;  10,000,000 shares authorized, no shares issued and outstanding                 |       | —                                                  |       | —                      |       |
| Common stock, $0.001 par value;  200,000,000 shares authorized, 72,376,538 and 71,852,646 shares issued  and outstanding, respectively |       | 72                                                      |       | 72                          |       |
| Additional paid-in capital                                                                                                                  |       | 185,858                                                 |       | 185,179                     |       |
| Accumulated deficit before exploration stage                                                                                                |       | (213                                                    | )          | (213                        | )          |
| Accumulated deficit during exploration and  development stage                                                                               |       | (77,744                                                 | )          | (71,990                     | )          |
| Total Equity (Note 7)                                                                                                                       |       | 107,973                                                 |       | 113,048                     |       |
| **TOTAL LIABILITIES ,  CONTINGENTLY REDEEMABLE NONCONTROLLING INTEREST, AND EQUITY**                                                        |       | $                                                       | 215,851    |                        | $          | 220,929 |   |

 

The accompanying notes are an integral part of these consolidatedfinancial statements.

 

3

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

**(Unaudited - Inthousands, except per share amounts)**

 
| ** **                                                                         | ** ** | **Three Months Ended**  | ** ** | **Six Months Ended**    | ** ** | **January 1, 2002  (Inception of  Exploration** | ** ** |
|------------------------------------------------------------------------------------|------------|-------------------------|------------|-------------------------|------------|------------------------------------------------------|------------|
| ** **                                                                         | ** ** | **June 30,  2009** | ** ** | **June 30,  2008** | ** ** | **June 30,  2009**                              | ** ** | **June 30,  2008** | ** ** | **Stage) to June 30,  2009** | ** ** |
|                                                                               |       |                    |       |                    |       |                                                 |       |   |   |   |   |
| REVENUES                                                                           |       | $                       | —     |                    | $          | —                                               |       | $ | — |   | $ | — |   | $ | — |   |
| OPERATING  EXPENSES:                                                               |       |                    |       |                    |       |                                                 |       |   |   |   |   |
| Exploration  and evaluation                                                        |       | 166                     |       | 1,662                   |       | 364                                                  |       | 4,187 |   | 37,068 |   |
| General  and administrative expense                                                |       | 2,724                   |       | 2,690                   |       | 5,637                                                |       | 5,914 |   | 44,920 |   |
| TOTAL  OPERATING EXPENSES                                                          |       | 2,890                   |       | 4,352                   |       | 6,001                                                |       | 10,101 |   | 81,988 |   |
| LOSS  FROM OPERATIONS                                                              |       | (2,890                  | )          | (4,352                  | )          | (6,001                                               | )          | (10,101 | ) | (81,988 | ) |
| OTHER  INCOME                                                                      |       |                    |       |                    |       |                                                 |       |   |   |   |   |
| Interest  and dividend income                                                      |       | —                  |       | 503                     |       | 8                                                    |       | 1,033 |   | 3,940 |   |
| Other  income                                                                      |       | —                  |       | —                  |       | —                                               |       | — |   | 65 |   |
| TOTAL  OTHER INCOME                                                                |       | —                  |       | 503                     |       | 8                                                    |       | 1,033 |   | 4,005 |   |
| LOSS  BEFORE TAXES                                                                 |       | (2,890                  | )          | (3,849                  | )          | (5,993                                               | )          | (9,068 | ) | (77,983 | ) |
| INCOME  TAXES                                                                      |       | —                  |       | —                  |       | —                                               |       | — |   | — |   |
| CONSOLIDATEDNET LOSS                                                               |       | $                       | (2,890     | )                       | $          | (3,849                                               | )          | $ | (5,993 | ) | $ | (9,068 | ) | $ | (77,983 | ) |
| LESS: NET LOSS ATTRIBUTABLE TO CONTINGENTLY  REDEEMABLE NONCONTROLLING INTEREST    |       | 136                     |       | —                  |       | 239                                                  |       | — |   | 239 |   |
| NET LOSS ATTRIBUTABLE TO GENERAL MOLY, INC.                                        |       | $                       | (2,754     | )                       | $          | (3,849                                               | )          | $ | (5,754 | ) | $ | (9,068 | ) | $ | (77,744 | ) |
|                                                                               |       |                    |       |                    |       |                                                 |       |   |   |   |   |
| BASIC AND DILUTED NET LOSS ATTRIBUTABLE TO GENERAL  MOLY PER SHARE OF COMMON STOCK |       | $                       | (0.04      | )                       | $          | (0.05                                                | )          | $ | (0.08 | ) | $ | (0.13 | ) |   |   |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES  OUTSTANDING — BASIC AND DILUTED     |       | 72,104                  |       | 70,957                  |       | 72,034                                               |       | 68,805 |   |   |   |

** **

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 — Inthousands)**

 
| ** **                                                                                     | ** ** | **Six  Months Ended** | ** ** | **January 1,  2002  (Inception of  Exploration  Stage) to** | ** ** |
|------------------------------------------------------------------------------------------------|------------|-----------------------|------------|----------------------------------------------------------------------------|------------|
| ** **                                                                                     | ** ** | **June 30,**     | ** ** | **June 30,**                                                          | ** ** | **June 30,** | ** ** |
| ** **                                                                                     | ** ** | **2009**              | ** ** | **2008**                                                                   | ** ** | **2009** | ** ** |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                          |       |                  |       |                                                                       |       |   |   |
| Consolidated Net loss                                                                          |       | $                     | (5,993     | )                                                                          | $          | (9,068 | ) | $ | (77,983 | ) |
| 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                                                                  |       | 173                   |       | 149                                                                        |       | 726 |   |
| Equity compensation for employees and directors                                                |       | 257                   |       | 1,580                                                                      |       | 12,241 |   |
| Decrease (increase) in deposits, prepaid expenses  and other                                   |       | 5                     |       | 301                                                                        |       | (229 | ) |
| Decrease (increase) in restricted cash held for  electricity transmission                      |       | 259                   |       | —                                                                     |       | (12,286 | ) |
| Increase in accounts payable and accrued  liabilities                                          |       | 346                   |       | 3,125                                                                      |       | 7,016 |   |
| (Decrease) increase in post closure reclamation and  remediation costs                         |       | (145                  | )          | 88                                                                         |       | 377 |   |
| Net cash used by operating activities                                                          |       | (4,720                | )          | (3,825                                                                     | )          | (67,770 | ) |
|                                                                                           |       |                  |       |                                                                       |       |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                          |       |                  |       |                                                                       |       |   |   |
| Payments for the purchase of equipment                                                         |       | —                |       | (168                                                                       | )          | (1,324 | ) |
| Purchase of securities                                                                         |       | —                |       | —                                                                     |       | (137 | ) |
| Purchase and development of mining properties, land  and water rights                          |       | (16,312               | )          | (17,461                                                                    | )          | (90,066 | ) |
| Deposits on property, plant and equipment                                                      |       | (1,346                | )          | (19,374                                                                    | )          | (32,845 | ) |
| Proceeds from option to purchase agreement                                                     |       | 100                   |       | —                                                                     |       | 100 |   |
| (Increase) in restricted cash held for reclamation  bonds                                      |       | —                |       | (351                                                                       | )          | (642 | ) |
| Cash provided by sale of marketable securities                                                 |       | —                |       | —                                                                     |       | 246 |   |
| Net cash used by investing activities                                                          |       | (17,558               | )          | (37,354                                                                    | )          | (124,668 | ) |
|                                                                                           |       |                  |       |                                                                       |       |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                          |       |                  |       |                                                                       |       |   |   |
| Proceeds from issuance of stock, net of issuance  costs                                        |       | 63                    |       | 20,172                                                                     |       | 165,168 |   |
| Cash proceeds from POS-Minerals Corporation                                                    |       | —                |       | 100,000                                                                    |       | 100,000 |   |
| Cash paid to POS-Minerals Corporation for purchase  price adjustment                           |       | —                |       | —                                                                     |       | (2,994 | ) |
| Decrease (increase) in restricted cash — Eureka  Moly, LLC                                |       | 13,784                |       | (73,621                                                                    | )          | (131 | ) |
| Net (decrease) increase in debt                                                                |       | (63                   | )          | 2                                                                          |       | 317 |   |
| Net cash provided by financing activities                                                      |       | 13,784                |       | 46,553                                                                     |       | 262,360 |   |
| Net (decrease) increase in cash and cash equivalents                                           |       | (8,494                | )          | 5,374                                                                      |       | 69,922 |   |
| Cash and cash equivalents, beginning of period                                                 |       | 78,462                |       | 78,371                                                                     |       | 46 |   |
| Cash and cash equivalents, end of period                                                       |       | $                     | 69,968     |                                                                       | $          | 83,745 |   | $ | 69,968 |   |
|                                                                                           |       |                  |       |                                                                       |       |   |   |
| NON-CASH INVESTING AND FINANCING ACTIVITIES:                                                   |       |                  |       |                                                                       |       |   |   |
| Equity compensation capitalized as development                                                 |       | $                     | 358        |                                                                       | $          | 1,071 |   | $ | 4,487 |   |
| 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.**

 

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

** **

**NOTES TOCONSOLIDATED FINANCIAL STATEMENTS**

** **

**NOTE1 — DESCRIPTION OF BUSINESS**

** **

GeneralMoly, Inc. (“we”, “us”, “our”, “the Company”, or “General Moly”) is aDelaware corporation originally incorporated as General Mines Corporation on November 23,1925.  In 1966, the Company amended itsarticles of incorporation to change its name to Idaho General Petroleum andMines Corporation, and amended its articles again in 1967 changing its name toIdaho General Mines, Inc. On October 5, 2007, we reincorporated inthe State 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.

 

Wewere in the exploration stage until October 4, 2007 when our Board ofDirectors (the “Board”) approved the development of the Mt. Hope molybdenumproperty (the “Mt. Hope Project”) in Eureka County, Nevada.  The Company is now in the development stageand is currently proceeding with the development of the Mt. Hope Project.  We are also in a care and maintenance mode onour Liberty molybdenum property (the “Liberty Property”) in Nye County, Nevada.  In addition, we have certain other, non-core,mineral interests in the Western United States that we are currently evaluatingfor potential development or sale.

 

Certainamounts for the period ended December 31, 2008 have been reclassified toconform to the 2009 presentation.

 

**The Mt. Hope Joint Venture.**  From October 2005to 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 (“Eureka Moly”), and in February 2008(the “Closing Date”) entered into a joint venture for the development andoperation of the Mt. Hope Project (the “Joint Venture”) with POS-MineralsCorporation (“POS-Minerals”) an affiliate of POSCO, a large Korean steelcompany.  Under the Joint Venture,POS-Minerals owns a 20% interest in Eureka Moly and General Moly, through awholly-owned subsidiary, owns an 80% interest. These ownership interests and/or required contributions under the JointVenture can change as discussed below.

 

Pursuantto the terms of the Joint Venture, POS-Minerals made its first and second cashcontributions to the Joint Venture totaling $100.0 million during the yearended December 31, 2008 (the “Initial Contributions”).  Additional amounts will be due fromPOS-Minerals within 15 days after the date (the “ROD Contribution Date”) thatspecified conditions (the “ROD Contribution Conditions”) have beensatisfied.  The ROD Contribution Conditionsare the receipt of major operating permits for the project, that the Record ofDecision (the “ROD”) from the United States Bureau of Land Management (“BLM”)for the project has become effective, and any administrative or judicialappeals with respect thereto are final. We are currently targeting the effectiveness of the ROD and thesatisfaction of the ROD Contribution Conditions to occur in mid-year 2010, butcircumstances beyond our control, including BLM or other agency delays orrequests for additional information or studies, and requests for review orappeals of the BLM decision, could cause the effectiveness of the ROD and/orthe satisfaction of the ROD Contribution Conditions to be delayed.

 

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 JointVenture costs incurred from the Closing Date to the ROD Contribution Date orreduce its ownership interest to 13% and fund its remaining 13% share of allJoint Venture costs incurred from the Closing Date to the ROD ContributionDate.  Such an election has not been madeby POS-Minerals, but is required to be made prior to January 31, 2010.

 

6

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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 Joint Venture,with no corresponding reduction in POS-Minerals’ ownership percentage, based onits election 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 theJoint Venture is obligated under the terms of the Joint Venture to make capitalcontributions to fund the return of contributions to POS-Minerals, if required.  If our subsidiary does not make these capitalcontributions, our interest in the Joint Venture is subject to dilution by apercentage equal to the ratio of 1.5 times the amount of the unpaidcontributions over the aggregate amount of deemed capital contributions (as determinedunder the Joint Venture agreement) of both parties to the Joint Venture (the“Dilution Formula”).  At June 30,2009, the aggregate amount of deemed capital contributions of both parties was$950 million.

 

Furthermore, a provisionin the LLC Agreement permits POS-Minerals the option to put its interest in theLLC to the Company’s subsidiary, Nevada Moly, upon a change of control of theCompany, as defined in the LLC agreement, followed by (i) failure to beginfull construction 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.  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.

 

Of theInitial Contributions of $100.0 million that were made by POS-Minerals during2008, $0.1 million remain available to fund the Mt. Hope Project JointVenture costs.  We are required, pursuantto the terms of the Joint Venture, to advance funds required to pay costs forthe development of the Mt. Hope Project that exceed the Initial Contributionsuntil the ROD Contribution Date, at which point the contributions describedabove to be made by POS-Minerals will be applied to reimburse us forPOS-Minerals’ share of such development costs. All costs incurred after the ROD Contribution Date will be allocated andfunded pro rata based on each party’s ownership interest.  The interest of a party in the Joint Venturethat does not make its pro rata capital contributions to fund costs incurredafter the ROD Contribution Date is subject to dilution based on the DilutionFormula.

 

**NOTE 1A — RESTATEMENT**

** **

On November 9, 2009,the Company****determined that itsunaudited consolidated financial statements for the three and six months ended June 30,2009 contained an error with respect to the balance sheet classification of thePOS-Minerals interest in Eureka Moly, LLC (the “LLC”). We classified thePOS-Minerals interest as noncontrolling interest as of June 30, 2009 (andas minority interest within temporary equity as of December 31, 2008 priorto our implementation of FASB guidance for Noncontrolling Interests). After completion of a recent review and evaluation of the related LLC agreementwith POS-Minerals, management determined that POS-Minerals interest in the LLCis more appropriately classified as temporary equity because of a provision inthe LLC Agreement that permits POS-Minerals the option to put its interest inthe LLC to the Company’s subsidiary, Nevada Moly, upon a change of control ofthe Company, as defined in the LLC agreement, followed by (i) failure tobegin 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.  If POS-Minerals put its interest, Nevada Moly would be required topurchase the interest for 120 percent of POS-Minerals contributions to the LLCplus 10 percent interest.

 

7

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The following tablereflects the impact of the reclassification on the Company’s balance sheet forthe quarter ended June 30, 2009:

 
| ** **                                                                          | ** ** | **As  of June 30, 2009** | ** ** |
|-------------------------------------------------------------------------------------|------------|-------------------------------|------------|
| ** **                                                                          | ** ** | **As  Originally  Reported**  | ** ** | **As  Restated** | ** ** |
| Total  Liabilities                                                                  |       | 8,117                         |       | 8,117 |   |
| Contingently  Redeemable Noncontrolling Interest                                    |       | 0                             |       | 99,761 |   |
| EQUITY                                                                              |       |                          |       |   |   |
| Noncontrolling  Interest                                                            |       | 99,761                        |       | 0 |   |
| Total  Equity                                                                       |       | 207,734                       |       | 107,973 |   |
| **TOTAL LIABILITIES, CONTINGENTLY REDEEMABLE NONCONTROLLING  INTEREST, AND EQUITY** |       | $                             | 215,851    |   | $ | 215,851 |   |
|                                                                                     |            |                               |            |  |  |  |  |

 

The restatement has noimpact on net loss attributable to the Company or to cash flows for the threeand six months ended June 30, 2009.

 

**NOTE 2 — LIQUIDITY,CAPITAL REQUIREMENTS AND RESTRUCTURING**

** **

Ourcash balance at June 30, 2009 was $70.0 million compared to$78.5 million at December 31, 2008. Additionally we have $0.1 million of restricted cash that represents theunspent amount of the Initial Contributions from POS-Minerals that is availablefor the continuing development of the Mt. Hope Project compared to $13.9million at December 31, 2008.

 

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 to either retain its current 20% interest orreduce its interest in the Joint Venture to 13%.  These amounts do not include financing costsor 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, the Company hasengaged Cutfield Freeman & Co., a London-based financial advisoryfirm, to assist the Company in primarily seeking bi-lateral agency and off-takerelated financing to potentially augment the projected bank financing.  Our ability to obtain such project and / oragency financing depends on the effectiveness and the timing of the ROD, theanticipated price of molybdenum, our projected operating costs and the overallstate of the economy and the credit markets.

 

The2008 disruptions in national and international credit markets have led to veryilliquid and volatile conditions.  Thereis a scarcity of credit and lenders are imposing tighter lending standards andhigher interest costs for loans.  Ourability to obtain the necessary funding for the Mt. Hope Project as well as theterms for such funding may be adversely affected by these disruptions in thecredit markets.  We may not be able toobtain the necessary financing for the Mt. Hope Project in a timelymanner, on customary 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 June 30, 2009 consolidated cashbalance of $70.1 million, we have the capacity to continue our current level ofpermitting efforts, maintain efforts to secure project financing, and secureand hold the most critical long lead equipment for the ultimate construction ofthe Mt. Hope project.

 

8

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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.  With respect to the remaining milling processequipment, the manufacturers have agreed to suspend fabrication of theequipment.  The Company has negotiatedwith the manufacturers regarding 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 $45 million undermilling process equipment orders through the end of 2010, and $6 million in2011.  As additional financing is securedand equipment procurement is restarted, agreements that were suspended will berenegotiated under new market terms and conditions.  For the gyratory crusher, SAG and ball millsand related electric mill drives, and some other long-lead equipment, we willown the equipment with final payments occurring throughout 2009 and 2010.  This strategy will allow for a rapid restartof 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 areongoing.  The lead times and costsassociated with many of these items have declined in recent months.  Once sufficient financing is secured, theCompany anticipates placing orders for this mining equipment again.  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 will reduce our total cash utilization for generaladministration and overhead to approximately $1 million per month by the fourthquarter of this year.  Based on ourcurrent cash on hand, the Company expects it will have adequate liquidity foroperations through the end of 2010. Engineering efforts, approximately 60% complete, were suspended in thesecond quarter of 2009, pending the completion of financing.

 

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.

 

Wealso incurred approximately $0.7 million in equipment contract cancellationcosts during the second quarter of 2009. Such costs were a combination of deposits forfeited and costs to cancelcontracts.  At June 30, 2009, themajority of equipment contracts had been settled with vendors to buyout(critical equipment), cancel or suspend. We expect that the remaining outstanding contracts that are stillpending final resolution, for both process and mining equipment, will besettled by the end of the third quarter of 2009.

 

Whilewe do not expect to achieve full project financing until credit markets and theoutlook for molybdenum prices improve, we are continuing to evaluate a numberof potential sources for capital, including the possibility of a sale ofanother minority interest in the Mt. Hope Project, additional support fromcurrent strategic partners, off-take related debt, and debt from privateinvestment 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 capital debt markets.

 

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 operations.

 

9

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**NOTE 3 — SUMMARY OFSIGNIFICANT 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 December 9, 2009, the filing date of this Form 10-Q/A,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.

 

*Principles of Consolidation*

 

Ourfinancial statements are prepared using the accrual basis of accounting inaccordance with accounting principles generally accepted in the United Statesof America.  At December 31, 2007,all of our subsidiaries were wholly owned. In February 2008, we entered into the Joint Venture whichestablishes our ownership interest in Eureka Moly at 80%.  At June 30, 2009 and December 31,2008, the consolidated financial statements include all of our wholly ownedsubsidiaries and our majority owned Joint Venture Eureka Moly.

 

*ContingentlyRedeemable 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 periodspresented. 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, certainnoncontrolling interests in consolidated entities meet the definition ofmandatorily redeemable financial instruments if the ability to redeem theinterest is outside of the control of the consolidating entity.  Asdescribed in Note 1, the LLC Agreement permits POS-Minerals the option to putits interest in the LLC to Nevada Moly upon a change of control, as defined inthe LLC Agreement, followed by (i) failure to begin full construction atthe LLC by the Company or the surviving entity before December 31, 2010,or (ii) failure to use standard mining industry practice in connectionwith development and operation of the project as contemplated by the partiesfor a period of twelve months after December 31, 2010.  As such, thecontingently redeemable noncontrolling interest has continued to be shown as aseparate caption between liabilities and equity (mezzanine section).  Thecarrying value of the contingently redeemable noncontrolling interest reflectsthe investment of the noncontrolling interest, less losses attributable to theinterest.

 

*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.

 

*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 SFAS No. 157 because they are valued based on 

 

10

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quoted market prices in active markets.  These cash instruments included $60.0 millionin U.S. Treasury securities at June 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 contemplatedin the 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 andevaluation of 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 3,377,156 and4,267,500 shares of common stock and awards totaling 175,000 and 255,000 at June 30,2009 and 2008, respectively, were not included in the computation of diluted earningsper share for the three and six months ended June 30, 2009 and 2008because to do so would have been antidilutive. Therefore, basic loss per share is the same as 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,land and 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.

 

*Depreciation and Amortization*

 

Property andequipment are recorded at cost and depreciated using the straight-line methodover the estimated useful lives of the assets. Property and equipment aredepreciated using the following estimated useful lives: field equipment — fiveyears; office furniture, fixtures, and equipment — five years; vehicles — threeto five years; leasehold improvements — three years; residential trailers — tento twenty years; and buildings and improvements — ten years.

 

11

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*Provision for Taxes*

 

Incometaxes are provided based upon the liability method of accounting pursuant toStatement of Financial Accounting Standards No. 109, “Accounting forIncome Taxes” (hereinafter “SFAS 109”). Under this approach, deferred income taxes are recorded to reflect thetax consequences in future years of differences between the tax basis of assetsand liabilities and their financial reporting amounts at each year-end.  A valuation allowance is recorded against thedeferred tax asset if management does not believe the Company has met the “morelikely than not” standard imposed by SFAS 109 to allow recognition of suchan 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 to futurerevenue generations are expensed. Liabilities are recognized when environmental assessments indicate thatremediation efforts are probable and the costs can be reasonably estimated.  Estimates of such liabilities are based uponcurrently available facts, existing technology and presently enacted laws andregulations taking into consideration the likely effects of inflation and othersocietal and economic factors, and include estimates of associated legalcosts.  These amounts also reflect priorexperience in remediating contaminated sites, other companies’ clean-upexperience and data released by The Environmental Protection Agency or otherorganizations.  Such estimates are bytheir nature imprecise and can be expected to be revised over time because ofchanges in government regulations, operations, technology and inflation.  Recoveries are evaluated separately from theliability and, when recovery is assured, the Company records and reports anasset separately from the associated liability.

 

*Stock-basedCompensation*

 

Stock-based compensationrepresents the fair value related to stock-based awards granted to members ofthe board of directors, officers and employees.  The Company uses theBlack-Scholes model to determine the fair value of stock-based awards underStatement of Financial Accounting Standards (SFAS) No. 123(R), *Share-Based Payment*.  For stock-basedcompensation that is earned upon the satisfaction of a service condition, thecost is recognized on a straight-line basis (net of estimated forfeitures) overthe requisite vesting period (up to three years).  Awards expire fiveyears from the date of vesting.  Furtherinformation regarding stock-based compensation can be found in Note 6 — “EquityIncentives.”  Stock compensation costsrelated to services associated with the Mt. Hope project are capitalized asdevelopment costs.

 

*RecentlyIssued Accounting Pronouncements*

 

In April 2009, theFinancial Accounting Standards Board (FASB) issued FASB Staff Position (FSP)Financial Accounting Standard (FAS) 157-4 “Determining Fair Value When theVolume and Level of Activity for the Asset or Liability Have SignificantlyDecreased and Identifying Transactions That Are Not Orderly”. Based on theguidance, if an entity determines that the level of activity for an asset orliability has significantly decreased and that a transaction is not orderly,further analysis of transactions or quoted prices is needed, and a significantadjustment to the transaction or quoted prices may be necessary to estimatefair value in accordance with Statement of Financial Accounting Standards(SFAS) No. 157 “Fair Value Measurements”. This FSP is to be appliedprospectively and is effective for interim and annual periods ending after June 15,2009 with early adoption permitted for periods ending after March 15,2009. The company has adopted this FSP for its quarter ending June 30,2009.  The adoption of FAS 157-4 had noimpact on the Company’s consolidated financial position, results of operationsor cash flows.

 

In April 2009, the FASBissued FSP FAS 107-1 and Accounting Principles Board (APB) 28-1 “InterimDisclosures about Fair Value of Financial Instruments”. The FSP amends SFAS No. 107“Disclosures about Fair Value of Financial Instruments” to require an entity toprovide disclosures about fair value of financial instruments in interimfinancial information. This FSP 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 this FSP for itsquarter ending June 30, 2009.  Theadoption of FSP FAS 107-1 and APB 28-1 had no impact on the Company’sconsolidated financial position, results of operations or cash flows.

 

12

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In May 2009, the FASBissued SFAS No. 165, “Subsequent Events” (“SFAS 165”), which providesguidance to establish general standards of accounting for and disclosures ofevents that occur after the balance sheet date but before financial statementsare issued or are available to be issued. SFAS 165 also requires entitiesto disclose the date through which subsequent events were evaluated as well asthe rationale 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. SFAS165 is effective for interim and annual periods ending after June 15,2009.  The Company adopted the provisionsof FAS 165 for the interim period ended June 30, 2009.  The adoption of FAS 165 had no impact on theCompany’s consolidated financial position, results of operations or cash flows.

 

In June 2009, the FASBapproved the “FASB Accounting Standards Codification” (the “Codification”) asthe single source of authoritative nongovernmental U.S. GAAP to be launched 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 considerednonauthoritative. The Codification is effective for interim and annual periodsending after September 15, 2009. The Codification is effective for the Companyin the interim period ending September 30, 2009 and the Company does notexpect the adoption to have a material impact on its consolidated financialposition, results of operations or cash flows.

 

**NOTE 4 — MININGPROPERTIES, LAND AND WATER RIGHTS**

** **

We currently have interests in two mining propertiesthat are the primary focus of our operations. The Mt. Hope Project is currently in the development stage and theLiberty Property is in the exploration and evaluation stage.** **Thefollowing is a summary of mining properties, land and water rights at June 30,2009 and December 31, 2008 (in thousands):

 
| **Mining Properties, Land and  Water Rights** | ** ** | **At June 30,  2009** | ** **   | **At  December 31,  2008** | ** ** |
|-----------------------------------------------|------------|----------------------------|--------------|---------------------------------|------------|
| Mt. Hope  Project:                       |       |                       |         |                            |       |
| Development  costs                            |       | $                          |  71,332 |                            | $          |  54,722 |   |
| Mineral,  land and water rights               |       | 10,253                     |         | 10,253                          |       |
| Advance  Royalties                            |       | 3,650                      |         | 3,650                           |       |
| Total  Mt. Hope Project                  |       | 85,235                     |         | 68,625                          |       |
| Total  Liberty Property                       |       | 9,770                      |         | 9,778                           |       |
| Other  Properties                             |       | 889                        |         | 889                             |       |
| Total                                         |       | $                          |  95,894 |                            | $          |  79,292 |   |

 

On June 26 2009, the Company and JosephineMining Corp. (JMC), a privately-owned Canadian company whose president is arelated party to one of the Company’s Board members, entered into an Option toPurchase Agreement for the Company’s Turner Gold property, a multi-metallicproperty located in Josephine County, Oregon. The Company acquired the property in 2004.  JMC paid $0.1 million upon entering into theagreement, which allows JMC certain exploratory rights through the optionperiod.  Each option isnon-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.

 

**NOTE 5 — COMMON STOCKAND COMMON STOCK WARRANTS**

 

Duringthe three months and six months ended June 30, 2009, we issued 363,663 and492,225 shares of common stock, respectively, pursuant to stock awards.

 

13

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At June 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.

 

**NOTE 6 — EQUITYINCENTIVES**

 

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 449,485 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 settled withcash 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 by the Black-Scholes option pricing model and is recognized ascompensation ratably on a straight-line basis over the requisitevesting/service period.  As of June 30,2009, there was $2.7 million of total unrecognized compensation cost related toshare-based compensation arrangements, which is expected to be recognized overa weighted-average period of 1.4 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 SFAS No. 123(R).  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 5.05%   |   |
| Volatility  **                                                                                                    |   | 66% to 123%      |   |
| Dividend  Yields                                                                                                  |   | —           |   |
|                                                                                                              |   |             |   |
| Weighted  Average Fair Value of Stock Appreciation Rights Granted During the Six Months  ended June 30, 2009 |   | $0.84            |   |

 

----

*   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.

* *The Company’s estimates of expected volatility are principally based on thehistoric volatility of the Company’s common stock over the most recent periodcommensurate with the estimated expected life of the Company’s stock options orSARS and other relevant factors.

 

14

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The following tablesummarizes option activity under the Plans for the six months ended June 30,2009:

 
| **Stock Option 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                 |       | $                                      | 2.10       |                                 | (30,000    | ) |
| Options  Forfeited                 |       | $                                      | 7.99       |                                 | (248,334   | ) |
| Options  Expired                   |       | $                                      | 3.20       |                                 | (240,000   | ) |
| Balance  at June 30, 2009     |       | $                                      | 5.20       |                                 | 3,377,156  |   |
|                               |       |                                   |       |                                 |       |
| Exercisable  at June 30, 2009 |       |                                   |       | 2,703,830                            |       |

 

For the six months ended June 30,2009, there were 450,000 SARS granted at a weighted exercise average price of$0.84 per right, and 61,260 SARS were forfeited.  No SARS were exercised, none expired, andnone were exercisable during the six months ended June 30, 2009.  At June 30, 2009, the aggregateintrinsic value of exercisable (fully vested) options was $0.3 million and hada weighted-average remaining contractual term of 3 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 for services.  Incentive based grants generally vest andstock is received without restriction to the extent of one-third of the grantedstock 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 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 six months ended June 30, 2009,a total of 363,663 shares were granted to employees with a weighted averagegrant date fair value of $2.64 per share, while a total of 128,562 shares weregranted to Board Members and the Secretary of the Company with a weightedaverage grant date fair value of $1.16 per share.

 

15

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*Summaryof compensation recognized under equity incentives*

 

The following is asummary of compensation recognized under equity incentives for the six monthsended June 30, 2009 (in thousands):

 

**Stock-Based Compensation Summary**

 
| Stock  Options                                                                                                            |   | $      | 928    |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
| SARS                                                                                                                      |   | 223    |   |
| Forfeitures  related to the restructuring                                                                                 |   | (567   | )      |
| Stock  Awards:                                                                                                            |   |   |   |
| Vesting  over time                                                                                                        |   | 123    |   |
| Board members  and Secretary                                                                                              |   | 455    |   |
| Total                                                                                                                     |   | $      | 1,162  |   |
| The  compensation recognized under equity incentives for the six months ended  June 30, 2009 is recorded as follows: |   |   |   |
| Capitalized  as Development                                                                                               |   | $      | 358    |   |
| Expensed                                                                                                                  |   | 804    |   |
|                                                                                                                      |   | $      | 1,162  |   |

 

*Taxes*

 

A portion of theCompany’s granted options qualify as incentive stock options (ISO) for incometax purposes.  As such, a tax benefit isnot recorded at the time the compensation cost related to the options isrecorded for book purposes due to the fact that an ISO does not ordinarilyresult in a tax benefit unless there is a disqualifying disposition.  Stock option grants of non-qualified 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  Six Months Ended** | ** ** |
|-------------------------------------------------------------------|------------|------------------------------------|------------|
| **Changes  in Equity**                                            | ** ** | **June 30,  2009**            | ** ** | **June 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                                  |       | 0 |   |
| At end of period                                                  |       | 72                                 |       | 71 |   |
|                                                              |       |                               |       |   |   |
| Additional paid-in capital:                                       |       |                               |       |   |   |
| At beginning of period                                            |       | 185,179                            |       | 159,828 |   |
| Exercised warrants                                                |       | —                             |       | 19,937 |   |
| Exercised options                                                 |       | 63                                 |       | 299 |   |
| Stock based compensation                                          |       | 616                                |       | 2,651 |   |
| Unvested shares earned                                            |       | —                             |       | (69 | ) |
| At end of period                                                  |       | 185,858                            |       | 182,646 |   |
|                                                              |       |                               |       |   |   |
| Accumulated deficit:                                              |       |                               |       |   |   |
| At beginning of period                                            |       | (72,203                            | )          | (57,789 | ) |
| Net loss                                                          |       | (5,754                             | )          | (9,068 | ) |
| At end of period                                                  |       | (77,957                            | )          | (66,857 | ) |
|                                                              |       |                               |       |   |   |
| Total Equity June 30, 2009 & 2008, respectively     |       | $                                  | 107,973    |   | $ | 115,860 |   |

** **

**NOTE 8 — INCOME TAXES**

** **

At June 30, 2009 andDecember 31, 2008, we had deferred tax assets principally arising from thenet operating loss carryforwards for income tax purposes multiplied by anexpected rate of 35%.  As our managementcannot determine that it is more likely than not that we will realize thebenefit of the deferred tax assets, a valuation allowance equal to the deferredtax asset has been established at June 30, 2009 and December 31,2008.  The significant components of thedeferred tax asset at June 30, 2009 and December 31, 2008 were asfollows (in thousands):

 
| **Deferred Tax Asset Valuation**                      | ** ** | **June 30, 2009** | ** ** | **December 31, 2008** | ** ** |
|-------------------------------------------------------|------------|------------------------|------------|----------------------------|------------|
| Operating loss carryforward                           |       | $                      | 114,140    |                       | $          | 94,004 |   |
| Unamortized exploration expense                       |       | 7,147                  |       | 8,126                      |       |
| Deductible stock-based compensation                   |       | 2,779                  |       | 2,779                      |       |
| Deductible temporary difference                       |       | 124,066                |       | 104,909                    |       |
| Taxable temporary difference — development costs |       | (51,943                | )          | (38,674                    | )          |
| Net deductible temporary difference                   |       | 72,123                 |       | 66,235                     |       |
| Deferred tax asset                                    |       | $                      | 25,243     |                       | $          | 23,182 |   |
| Deferred tax asset valuation allowance                |       | $                      | (25,243    | )                          | $          | (23,182 | ) |
| Net deferred tax asset                                |       | $                      | —     |                       | $          | — |   |

 

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At June 30, 2009 andDecember 31, 2008, we had net operating loss carryforwards ofapproximately $114.1 million and $94.0 million, respectively, whichexpire in the years 2022 through 2029.

 

**NOTE 9—COMMITMENTS ANDCONTINGENCIES**

** **

**Mt. HopeLease Agreement**

 

The Mt. Hope Lease may beterminated upon the expiration of its 30-year term, earlier at the election ofEureka Moly, or upon our 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 furtherpayments would be due to MHMI.  In orderto maintain the lease, Eureka Moly must pay certain deferral fees and advanceroyalties as discussed below.

 

The Mt. Hope LeaseAgreement requires a royalty advance (the “Construction Royalty Advance”) of 3%of the construction capital cost estimate upon the earliest of Eureka Molysecuring project financing in sufficient amounts to develop and put intooperation the Mt. Hope property at a production level of at least 10 millionpounds of annual production or October 19, 2008.

 

Eureka Moly has the rightto defer the Construction Royalty Advance for one or two years by payment of adeferral fee (the “Deferral Fee”) in the amount of $0.4 million on or before October 19,2008 and October 19, 2009 in the event project financing for the projecthas not been secured by each of the dates. On October 17, 2008 Eureka Moly paid the $0.4 million Deferral Feeof October 19, 2008 discussed above to MHMI thereby deferring theConstruction Royalty Advance. Through June 30, 2009 we have paid $3.7million of the total Construction Royalty Advance.  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 ConstructionRoyalty Advance has been paid in full, Eureka Moly is obligated to pay anadvance royalty (the “Annual Advance Royalty”) each October 19 thereafterin the amount of $0.5 million per year.  The Construction Royalty Advance and theAnnual 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 obligatedto pay the Construction Royalty Advance each time capital is raised for the Mt.Hope Project.  Based on the currentestimate of raising capital and developing and operating the mine, we believeEureka Moly’s contractual obligations under the Mt. Hope Lease Agreement willbe as shown in the following table (in thousands).  This estimate is based on our currentestimates of the timing of securing project financing and construction capitalcosts.

 

**Deferral Fee 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, Eureka Molyestimates that the Production Royalties will be in excess of the Annual AdvanceRoyalties for the life of the project and, further, the Construction RoyaltyAdvance will be fully recovered (credited against MHMI Production Royalties) bythe end of 2014.

 

**Depositson project property, plant and equipment**

 

As a continuing part ofthe development of the Mt. Hope Project, Eureka Moly has placed orders formining and milling equipment that must be built to specification and requires along 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 June 30, 2009, wehave contracts to purchase mining equipment comprised of two electric shovelsand 24 haul trucks and milling process equipment comprised of two 230kV primarytransformers, a primary crusher, a semi-autogenous mill, two ball mills,various motors for the mills, two multi-hearth molybdenum roasters, 16flotation cells and other milling process equipment.

 

We have maintainedequipment orders for custom-built grinding and other milling process equipmentas a result of negotiations with vendors related to construction schedule,delivery timelines, storage and payment terms, largely completed during thesecond quarter of 2009.  We havecancelled some mining equipment purchase contracts, and expect to complete therenegotiations for cancellation or suspension of the remaining mining equipmentcontracts during the third quarter of 2009. The following table sets forthEureka Moly’s cash commitments under mining and milling equipment contracts(collectively, “Purchase Contracts”) at June 30, 2009 (in thousands),inclusive of mining equipment contracts that are still being renegotiated.

 

**CashCommitments under Purchase Contracts**

 
| **Year**              | ** ** | **As of June 30,  2009** | ** ** |
|-----------------------|------------|-------------------------------|------------|
| 2009 — Remainder |       | $                             | 10,965     |   |
| 2010                  |       | 65,003                        |       |
| 2011                  |       | 48,207                        |       |
| 2012                  |       | 30,371                        |       |
| Total                 |       | $                             | 154,546    |   |

** **

**NOTE 10—SUBSEQUENT EVENTS**

** **

As described in Note 3, the Company has evaluated allsubsequent events through December 9, 2009, the filing date of this Form 10-Q/A,and the issuance of our financial statements. Subsequent to the original filing of the Form 10-Q for the periodended June 30, 2009, Eureka Moly has continued to renegotiate and updatecash commitments under purchase contracts. As of the date of this filing, we have substantially completed allrenegotiations for mining and milling equipment.

 

The following table sets forth Eureka Moly’s cash commitments undermining and milling Purchase Contracts at December 9, 2009 (in thousands).

 

**Cash Commitments under PurchaseContracts**

 
| **Period**             | ** ** | **As of  December 9, 2009** | ** ** |
|------------------------|------------|-----------------------------|------------|
| 2009  — Remainder |       | 0                           |       |
| 2010                   |       | 34,956                      |       |
| 2011                   |       | 12,350                      |       |
| 2012                   |       | 21,121                      |       |
| 2013                   |       | 2,406                       |       |
| Total                  |       | $                           | 70,833     |   |
|                        |            |                             |            |  |

 

Cashcommitments under Purchase Contracts are inclusive of $39.1 million undermilling process equipment orders ($35.0 million due through the end of 2010,and $4.1 million in 2011), and $31.7 million in mining equipment orders.

** **

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

** **

References made in thisQuarterly Report on Form 10-Q to “we,” “our,” “us,” or the “Company,”refer to General Moly, Inc.

 

The following discussionand analysis of our financial condition and results of operations constitutesmanagement’s review of the factors that affected our financial andoperating performance for the six months ended June 30, 2009 and2008.  This discussion should be read inconjunction with the consolidated financial statements and notes theretocontained elsewhere in this report and in our Annual Report on Form 10-K forthe year ended December 31, 2008, which was filed on February 27,2009. The disclosures in this itemhave been updated to reflect 

 

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the restatement discussed in the Explanatory Noteto this Form 10-Q/A and in Note 1A to our consolidated financialstatements contained elsewhere in this document.

 

**Overview**

 

We are a developmentstage company and began the development of the Mt. Hope Project on October 4,2007.  During the year ended December 31,2008 we also completed work on a pre-feasibility study of our LibertyProperty.  We continue to approach theLiberty Property in a care and maintenance mode, and do not expect to spendappreciable amounts of capital on the Liberty Property until market conditionswarrant its development.

 

On October 4, 2007,our Board of Directors approved the development of the Mt. Hope Project ascontemplated in our Bankable Feasibility Study. The Company completed basic engineering of the Mt. Hope Project duringthe year ended December 31, 2008 and updated its capital cost estimaterelated to the Mt. Hope Project based upon having completed 30% of the detailedengineering.

 

The development of theMt. Hope Project has an estimated total capital requirement of $1,154.0million including development costs of approximately $1,039.3 million (in2008 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 six months ended June 30,2009 we have spent approximately $122.3 million and have $70.1 millionremaining cash on hand for use in the development of the Mt. Hope Project andother cash requirements.

 

Given the continueduncertainty in the project finance market, low molybdenum prices at the time,and a longer than expected timeframe to receive the federal permits to beginconstruction at the Mt. Hope project, on March 26, 2009, we implemented acash conservation plan to reduce expenditures and conserve cash for 2009 and2010 in order to maximize financial flexibility.  In addition to conserving cash, the plansimplemented will retain the ability to start construction at the Mt. Hopeproject pending improvements in the molybdenum and capital markets.  With our June 30, 2009 consolidated cashbalance of $70.1 million, we have the capacity to continue our current level ofpermitting efforts, maintain efforts to secure project financing, and securethe most critical long lead equipment for the ultimate construction of the Mt.Hope project.

 

Once financing isobtained and we have received the major operating permits and the ROD from theBLM, it is expected that Mt. Hope can be constructed and in production within20 months.  In the interim, our permittingefforts are continuing full-time.  TheCompany has maintained its orders for grinding, milling, and other specialtylong lead equipment, although other engineering, administrative and third-partywork has been slowed or suspended.

 

We will continue to workwith Credit Suisse and Barclays to seek project financing.   The Company has also engaged CutfieldFreeman & Co., a London-based financial advisory firm, to assist theCompany in primarily seeking bi-lateral agency and off-take financing topotentially augment the projected bank financing.  We will continue evaluating all sources ofcapital, including equity partners at the asset level and vendorfinancing.  Given our strong off-take agreementsand other preparatory work completed, we believe the Company is well positionedto execute a project finance facility once credit conditions improve and as themolybdenum price continues to recover.

 

Over the second quarterof 2009, spot molybdenum (“moly”) prices rose from approximately $7.70 perpound in April to over $10.50 per pound by June 30, 2009 and havetraded as high as $17 per pound more recently. Higher prices have been caused by a number of factors, including Chinesemoly imports, increasing steel capacity utilization rates in developing nations,modestly improving steel capacity utilization rates in the United States andEurope, an end to global inventory de-stocking, and moly supply reductions.

 

**Restructuring and Suspension of Project Development**

 

As discussed above, weimplemented a cash conservation plan whereby total cash utilization other thanequipment purchases is anticipated to decline to approximately $1 million permonth by the fourth quarter of this year. Based on our current cash on hand and our cash conservation plan, theCompany expects it will have adequate 

 

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liquidityfor operations, as modified, through the end of 2010.  Engineering efforts, approximately 60%complete, have been suspended pending the completion of financing.

 

The Company has purchaseorders for two types of equipment — milling process equipment and miningequipment.  Most equipment orders for thecustom-built grinding and other milling process equipment will be completed bythe manufacturers and stored.  Thegrinding and milling process equipment require the longest lead times andmaintaining these orders is critical to the Company’s ability to re-start thedevelopment of Mt. Hope rapidly.  Withrespect to the remaining milling process equipment, the manufacturers haveagreed to suspend fabrication of the equipment. The Company has negotiated with the manufacturers regarding equipmentfabrication costs incurred to date, storage costs, and the expected timing ofrestarting fabrication.  Based on ourcurrent plan, expected timetable, and the results of such negotiations, weexpect to make additional payments of approximately $45 million under millingprocess equipment orders through the end of 2010, and $6 million in 2011.  As additional financing is secured andequipment procurement is restarted, final pricing terms in the agreements thatwere suspended will be renegotiated under current market terms and conditions.

 

Some orders for miningequipment have been cancelled, and discussions with the remaining suppliers toeither cancel or suspend existing agreements are ongoing.  The lead times and costs associated with manyof these items have declined in recent months. Once financing is secured, the Company anticipates placing orders forthis mining equipment again.  The Companywill continue to evaluate all options to decrease Mt. Hope’s initial capitalrequirement and facilitate a timelier re-start of the project development.

 

The cash conservationplan also impacted General Moly employees and contractor support.  In March 2009, the Company initiatedplans to reduce administrative expenses by $5 million per year through acombination of compensation restructuring and position eliminations.

 

**PermittingUpdate**

 

Major operating permitsrequired for the Mt. Hope Project are the ROD, the water pollution controlpermit and reclamation permit from the Nevada Division of EnvironmentalProtection—Bureau of Mining Regulation and Reclamation (“BMRR”), and an airquality permit from the Nevada Division of Environmental Protection— Bureau ofAir Pollution Control (“BAPC”).

 

The ROD for the Mt. HopeProject will be effective on the date the BLM has recorded its decision toapprove the plan of operations for the Mt. Hope Project.  We currently expect to receive the RODapproximately mid-year 2010.  In September 2006,the BLM determined that the plan of operations met the regulatory requirementswith respect to completeness and comprehensiveness.  Since that time, additional updates have beensubmitted to accommodate additional detail based on progression of projectdesign.  The BLM is preparing anenvironmental impact statement (“EIS”) analyzing the environmental impacts ofthe Mt. Hope Project and alternatives in accordance with the NationalEnvironmental Policy Act.  Preparation ofthis EIS requires the completion of certain hydrologic studies of both pit lakegeochemistry and regional hydrology. Following the completion of these studies and the EIS and any remainingBLM requirements, the BLM will make a decision on whether to approve the planof operations.  The ROD and the relateddecision of the BLM to approve the plan of operations may not be appealed untilBLM approval.

 

Following March of2009 discussions with the BLM related to the Company’s hydrologic studies ofboth pit lake geochemistry and regional hydrology, the Company determined thatadditional analysis and data acquisition will be conducted to improve thetechnical adequacy of the studies, largely focused on the hydrogeology of theopen pit area.  We believe this furtherwork, which comprises additional pump tests and analysis in the open pit miningarea, does not indicate a concern related to ultimate permit receipt; however,this work is the primary reason for the delay in the expected receipt of theROD from the fourth quarter of 2009 to approximately mid-year 2010.

 

The application for theair quality permit was submitted to BAPC in the third quarter 2008.  The application for the water pollutioncontrol permit was submitted to BMRR in the third quarter 2008.  The application for the reclamation permit isincluded with the plan of operations for the project, and was submitted to theBLM and BMRR as part of the most recent update in January, 2009.  Although the reclamation permit isadministered by BMRR, BLM review is required and the reclamation cost estimatemust be approved in conjunction with BLM approval of 

 

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theCompany’s plan of operations.  We believethese major operating permits will be received on or prior to the effectivedate of the ROD.

 

Although we currently aretargeting the effectiveness of the ROD and the receipt of all major operatingpermits to occur in approximately mid-year 2010, circumstances beyond ourcontrol, including BLM or other agency delays or requests for additionalinformation or studies, and requests for review or appeals of the BLM decision,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 delay our ability toconsummate project financing or other significant financing.  A delay in the ROD or the receipt of majoroperating permits also affects the satisfaction of the ROD ContributionConditions, extends the time for the receipt of POS-Minerals thirdcontribution, and may affect the contingent obligation of Eureka Moly to refundcapital contributions to POS-Minerals and the amount of any such refund.  See “—The Mt. Hope Joint Venture” below.

 

**WaterRights 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 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.

 

Subsequent to that rulingand the Company’s announcement thereof, two appeals have been filed with theSeventh Judicial District Court of the State of Nevada to challenge the StateEngineer’s decision.  Although the Companyand its attorneys believe these appeals to be without merit and unlikely tosucceed, a successful appeal could have a material negative impact on the Mt.Hope project.  District Court datesassociated with the appeals have not been set, pending the release of theRecord on Appeal by the Nevada Attorney General’s office.  A Stipulation and Order for the proceedingshas now been established providing a 40-day period for the Petitioners toprovide their opening briefs following receipt of the Record on Appeal.  This 40-day period will then be followed by acombined 60 days for reply briefs.  Wefully expect the  Attorney General torelease the Record on Appeal in early August 2009,  and then anticipate that the appeal will beruled upon by the District Judge late in the fourth quarter of 2009 or early2010.

 

Although the waterapplication approvals are under appeal, the State Engineer issued the Companyall water permits on July 21, 2009, providing the legal and regulatoryauthority to the use of the 11,300 acre feet annually of water for our miningoperations.

 

**The Mt. Hope Joint Venture**

 

Effective as of January 1,2008, we contributed all of our interest in the assets related to theMt. Hope Project, including the Mt. Hope Lease, to Eureka Moly, andin February 2008 entered into the Mt. Hope Project Joint Venture withPOS-Minerals.  Under the terms of theJoint Venture, POS-Minerals owns a 20% interest in Eureka Moly, and GeneralMoly, through a subsidiary, owns an 80% interest. These ownership interestsand/or the required contributions under the Joint Venture can change asdiscussed below.

 

Pursuant to the terms ofthe Joint Venture, POS-Minerals made its Initial Contributions to the JointVenture totaling $100.0 million during the year ended December 31,2008.  Additional amounts will be duefrom POS-Minerals within 15 days after the date the ROD Contribution Conditionshave been satisfied.  The RODContribution Conditions are the receipt of major operating permits for theproject, that the ROD has become effective, and any administrative or judicialappeals with respect thereto are final. See “—Permitting Update” above for a discussion of the status ofpermitting.

 

Our current forecast ofthe ROD Contribution Date occurring after December 31, 2009 allowsPOS-Minerals to elect to either retain its 20% share by contributing anadditional $56.0 million plus its 20% share of all Joint Venture costs incurredfrom the Closing Date to the ROD Contribution Date or reduce its ownershipinterest to 13% and fund 

 

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itsremaining 13% share of all Joint Venture costs incurred from the Closing Dateto the ROD Contribution Date.  Such anelection has not been made by POS-Minerals, but is required to be made prior toJanuary 31, 2010.

 

In addition, ifcommercial 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 Joint Venture,with no corresponding reduction in POS-Minerals’ ownership percentage, based onits election 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 commercial productionby 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 theJoint Venture is obligated under the terms of the Joint Venture to make capitalcontributions to fund the return of contributions to POS-Minerals, if required.  If our subsidiary does not make these capitalcontributions, our interest in the Joint Venture is subject to dilution basedon the Dilution Formula, calculated as a percentage equal to the ratio of 1.5times the amount of such unpaid contributions, over the aggregate amount of deemedcapital contributions (as determined under the Joint Venture agreement) of bothparties to the Joint Venture.  At June 30,2009 the aggregate amount of deemed capital contributions of both parties was$950 million.

 

Furthermore, a provisionin the LLC Agreement permits POS-Minerals the option to put its interest in theLLC to the Company’s subsidiary, Nevada Moly, upon  a change of control ofthe Company, as defined in the LLC agreement, followed by (i) failure tobegin 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.  If POS-Minerals put its interest, Nevada Moly would be required topurchase the interest for 120 percent of POS-Minerals contributions to the LLCplus 10 percent interest.

 

Of theInitial Contributions of $100.0 million that were made by POS-Minerals during2008, $0.1 million remain available to fund the Mt. Hope Project JointVenture costs.  We are required, pursuantto the terms of the Joint Venture, to advance funds required to pay costs forthe development of the Mt. Hope Project that exceed the Initial Contributionsuntil the ROD Contribution Date, at which point the contributions describedabove to be made by POS-Minerals will be applied to reimburse us forPOS-Minerals’ share of such development costs. All costs incurred after the ROD Contribution Date will be allocated andfunded pro rata based on each party’s ownership interest.  The interest of a party in the Joint Venturethat does not make its pro rata capital contributions to fund costs incurred afterthe ROD Contribution Date is subject to dilution based on the Dilution Formula.

 

**Liquidity, Capital Resources and Capital Requirements**

 

*For theperiod from December 31, 2008 to June 30, 2009*

 

Our cash balance at June 30,2009 was $70.0 million compared to $78.5 million at December 31, 2008.  Additionally, at June 30, 2009 we have$0.1 million of restricted cash that represents the unspent amount of theInitial Contributions from POS-Minerals that is available for the continuingdevelopment of the Mt. Hope Project compared to $13.9 million at December 31,2008.  Our total consolidated cashbalance at June 30, 2009 was $70.1 million compared to $92.4 million at December 31,2008.  The decrease in our cash balancesfor the six months ended June 30, 2009 was due primarily to developmentcosts incurred of $15.4 million, deposits on property plant and equipmenttotaling $1.3 million, and general and administrative costs of $5.6million.  Deposits on property, plant andequipment relate primarily to scheduled payments for long lead time equipmentfor the Mt. Hope Project.  See “—Contractual Obligations” below.

 

Total assets as of June 30,2009 decreased to $215.9 million compared to $220.9 million as of December 31,2008 primarily as a result of the increase in the accumulated deficit of $5.8million during the six month period ended June 30, 2009 and the changesdiscussed in the preceding paragraph.

 

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As discussed above under“— Permitting and Water Rights Update”, we currently anticipate the effectivenessof the ROD and the satisfaction of the ROD Contribution Conditions to occur inmid-year 2010, but circumstances beyond our control could cause theeffectiveness of the ROD and / or the satisfaction of the ROD ContributionConditions to be delayed.  We estimatethat this will delay the achievement of the ROD Contribution Date to the secondhalf of 2010 and allow POS-Minerals to elect to pay $56.0 million plus its 20%share of Joint Venture costs incurred from the Closing Date to the RODContribution Date to retain its 20% share of the Joint Venture oralternatively, to reduce its interest from 20% to 13%, in which case we wouldonly receive reimbursement for Joint Venture costs for the resulting 13%ownership retained by POS-Minerals.

 

As discussed above under“— Restructuring and Suspension of Project Development”, we have suspendedengineering efforts and mining and most milling process equipment purchases forthe Mt. Hope Project until such time as we can obtain additional financing.  While we do not expect to achieve fullproject financing until credit markets and the outlook for molybdenum pricesimprove, we are continuing to evaluate a number of potential sources forcapital, including the possibility of a sale of another minority interest in theMt. Hope Project, additional support from current strategic partners, off-takerelated debt, and debt from private investment groups, as well as the capitalmarkets.

 

With our cashconservation plan, our non-equipment related cash requirements are expected todecline to approximately $1 million per month by the fourth quarter of thisyear.  Based on our current plan andexpected timetable, we expect to make additional payments of approximately $45million under milling process equipment orders through the end of 2010, and $6million in 2011.  As additional financingis secured and equipment procurement is restarted, agreements that weresuspended will be renegotiated under current market terms and conditions.  Accordingly, based on our current cash onhand and our cash conservation plan, the Company expects it will have adequateliquidity for operations, as modified and based on successful renegotiation ofmining equipment contracts, through the year ended December 31, 2010.

 

Once the ROD iseffective, additional capital will be required through the commencement ofcommercial production at the Mt. Hope Project. Our ability to develop the project is dependent on, among other things,our ability to raise the necessary capital to fund the Mt. Hope Projectboth in sufficient amount and in a timely manner.  Additionally, if the currently estimatedcosts 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.

 

The cash needs for thedevelopment of the Mt. Hope Project require that we or Eureka Moly obtainproject financing or other significant financing in addition to the capitalcontributions 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 to either retain its current 20% interest or reduceits interest in the Joint Venture to 13%. These amounts do not include financing costs or amounts necessary tofund 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.  The Company has also engagedCutfield Freeman & Co., a London-based financial advisory firm, toassist the Company in primarily seeking bi-lateral agency and off-takefinancing to potentially augment the projected bank financing.  Our ability to obtain such project and / oragency financing depends on the effectiveness and the timing of the ROD, theanticipated price of molybdenum, our projected operating costs and the overallstate of the economy and the credit markets.

 

The 2008 disruptions innational and international credit markets have led to very illiquid andvolatile conditions.  There is a scarcityof credit and lenders are imposing tighter lending standards and higher interestcosts for loans.  Our ability to obtainthe necessary funding for the Mt. Hope Project as well as the terms for suchfunding 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.

 

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We also requireadditional 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 planned operations.

 

**Results of Operations**

 

*Sixmonths ended June 30, 2009 compared to six months ended June 30, 2008*

 

For the six months ended June 30,2009 we had a consolidated net loss of $6.0 million compared with a net loss of$9.1 million in the same period for 2008.

 

For the six months ended June 30,2009 and 2008, exploration and evaluation expenses were $0.4 million and $4.2million, respectively.  For the sixmonths ended June 30, 2008 we incurred exploration and evaluation costs onthe Liberty Property as we completed a pre-feasibility study on the LibertyProperty in April 2008.  For the sixmonths ended June 30, 2009 the Liberty Property has been on a care andmaintenance status, and, accordingly, the resulting exploration and evaluationexpenses are considerably lower for the period.

 

For the six months ended June 30,2009 and 2008, general and administrative expenses were $5.6 million and $5.9million, respectively.  For the sixmonths ended June 30, 2009 restructuring costs resulting from theimplementation of our cash conservation plan are included in general andadministrative expenses.  In March 2009we incurred costs related to one-time employee termination benefits totaling$0.8 million.  The majority of theaffected employees were not required to render service beyond 60 days, andaccordingly, costs associated with these one-time termination benefits wererecognized in March 2009. Additional costs of $0.1 million were recognized during the secondquarter, for those few affected employees who rendered services beyond 60 days.

 

We also incurredapproximately $0.7 million in equipment contract cancellation costs during thesecond quarter of 2009.  Such costs werea combination of deposits forfeited and costs to cancel contracts.

 

Interest income was nilfor the six months ended June 30, 2009 compared with $1.0 million in 2008as a result of substantially lower interest rates, and lower cash balances in2009 compared with the corresponding periods in 2008.

 

**Contractual Obligations**

 

As a continuing part ofthe development of the Mt. Hope Project, Eureka Moly has placed orders formining and milling equipment that must be built to specification and requirelong lead times 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 June 30, 2009, wehave contracts to purchase mining equipment comprised of two electric shovelsand 24 haul trucks and milling process equipment comprised of two 230kV primarytransformers, a primary crusher, a semi-autogenous mill, two ball mills,various motors for the mills, two multi-hearth molybdenum roasters, 16flotation cells and other milling process equipment.

 

As described above in“—Restructuring and Suspension of Project Development,” we are maintainingequipment orders for  custom-builtgrinding and other milling process equipment as a result of negotiations withvendors related to construction schedule, delivery timelines, storage and payment terms.  We have cancelled some mining equipmentorders, and expect to cancel or suspend the remaining mining equipment purchasecontracts during the third quarter of 2009.

 

The following table setsforth Eureka Moly’s cash commitments under mining and milling PurchaseContracts at June 30, 2009 (in millions), inclusive of mining equipmentcontracts that are still being renegotiated.

 

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**Cash Commitments under PurchaseContracts**

 
| **Period**            | ** ** | **As of June 30, 2009** | ** ** |
|-----------------------|------------|------------------------------|------------|
| 3rd Quarter 2009 |       | 6.7                          |       |
| 4th Quarter 2009 |       | 4.3                          |       |
| Total 2009            |       | 11.0                         |       |
| 2010                  |       | 65.0                         |       |
| 2011                  |       | 48.2                         |       |
| 2012                  |       | 30.3                         |       |
| Total                 |       | $                            | 154.5      |   |
|                       |            |                              |            |  |

 

Cash commitments underPurchase Contracts are inclusive of $51 million under milling process equipmentorders (approximately $45 million due through the end of 2010, and $6 millionin 2011), and $103.5 million in mining equipment orders that are beingrenegotiated as described below.

 

We also incurredapproximately $0.7 million in equipment contract cancellation costs during thesecond quarter of 2009.  Such costs werea combination of deposits forfeited and costs to cancel contracts.  At June 30, 2009, the majority ofcontracts had been cancelled or suspended. We expect that the remaining contracts, related to mining equipment,will be cancelled or suspended by the end of the third quarter of 2009.

 

As we continue the renegotiation or cancellation ofPurchase Contracts that have not already been successfully renegotiated,cancelled or suspended, we will take all appropriate action to minimize anylosses, but could be subject to claims or penalties under the contracts orapplicable law.  The cancellation orsuspension of certain contracts could cause a delay in the commencement ofoperations, have ramifications under the Joint Venture with POS-Minerals andcould add to the cost to develop our interest in the Mt. Hope Project.

 

We also estimate that wewill be required to pay approximately $2.3 million in additional handling,storage, freight and insurance costs related to the custom-build grinding andother milling process equipment.  Basedon our current plan, expected timetable, and the results of such negotiations,we expect to make additional payments of approximately $45 million under thesemilling process equipment orders through the end of 2010, and $6 million in2011.  As additional financing is securedand equipment procurement is restarted, agreements that were suspended will berenegotiated under current market terms and conditions.

 

*ContingentlyRedeemable 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 periodspresented. 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 noncontrolling interests in consolidated entities meet the definitionof mandatorily redeemable financial instruments if the ability to redeem theinterest is outside of the control of the consolidating entity.

 

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** **

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

** **

**Commodity Price Risk**

** **

We are a developmentstage company in the business of the exploration, development and mining ofproperties primarily containing molybdenum. As a result, upon commencement of production, our financial performancecould be materially affected by fluctuations in the market price of molybdenumand other metals we may mine.  The marketprices of metals can fluctuate widely due to a number of factors.  These factors include fluctuations withrespect to the rate of inflation, the exchange rates of the U.S. dollar andother currencies, interest rates, global or regional political and economicconditions, banking environment, global and regional demand, production costs,and investor sentiment.

 

In order to better managecommodity price risk and to seek to reduce the negative impact of fluctuationsin prices, we will seek to enter into long term supply contracts.  On December 28, 2007, we entered into amolybdenum supply agreement with ArcelorMittal that provides for ArcelorMittalto purchase 6.5 million pounds of molybdenum per year, plus or minus 10%,once the Mt. Hope Project commences commercial operations at minimumspecified levels. The supply agreement provides for a floor price along with adiscount for spot prices above the floor price and expires five years after thecommencement of commercial production at the Mt. Hope Project.  Both the floor and threshold levels at which thepercentage discounts change are indexed to a producer price index.

 

Additionally, on May 14,2008, we entered into a molybdenum supply agreement with SeAH BesteelCorporation (“SeAH Besteel”), Korea’s largest manufacturer of specialty steels,which provides for SeAH Besteel to purchase 4.0 million pounds ofmolybdenum per year, plus or minus 10%, once the Mt. Hope Projectcommences commercial operations at minimum specified levels. Like theArcelorMittal supply agreement, the supply agreement with SeAH Besteel providesfor a floor price along with staged discounts for spot prices above the floorprice and expires five years from the date of first supply under theagreement.  Both the floor and thresholdlevels at which the percentage discounts change are indexed to a producer priceindex.

 

On August 8, 2008,the Company entered into a molybdenum supply agreement (the “Sojitz Agreement”)with Sojitz Corporation.  The SojitzAgreement provides for the supply of 5.0 million pounds per year of molybdenumfor five years, beginning once the Mt. Hope Project reaches certain minimumcommercial production levels.  Onemillion annual pounds sold under the Sojitz Agreement will be subject to aper-pound molybdenum floor price and is offset by a flat discount to spot moly pricesabove the floor.  The remaining 4.0million annual pounds sold under the Sojitz Agreement will be sold withreference to spot moly prices without regard to a floor price.

 

All three long termsupply agreements provide for supply only after commercial production levelsare achieved, and no provisions require the Company to deliver product or makeany payments if commercial production is never achieved, or drops off in laterperiods.  The agreements require thatmonthly shortfalls be made up only if the Company’s portion of Mt. Hopeproduction is available for delivery, after POS-Minerals has taken itsshare.  In no event do these requirementsto make up monthly shortfalls become obligations of the Company if productiondoes not meet targeted levels.

 

Furthermore, each of theagreements have take-or-pay provisions that require the buyers to either takedelivery of product made available by the Company, or to pay as though they hadtaken delivery pursuant to the term of the agreements.

 

While we have not usedderivative financial instruments in the past, we may elect to enter intoderivative financial instruments to manage commodity price risk.  We have not entered into any market risksensitive instruments for trading or speculative purposes and do not expect toenter into derivative or other financial instruments for trading or speculativepurposes.

 

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**InterestRate Risk**

 

As of June 30, 2009,we had a balance of cash and cash equivalents and restricted cash of $70.1million.  If and to the extent that thesefunds were invested in interest bearing instruments during the entire six monthperiod ended June 30, 2009, a hypothetical 1% point decrease in the rateof interest earned on these funds would affect our income for the six monthperiod ended June 30, 2009 by approximately $0.4 million.

 

**ITEM4.**                                                     CONTROLSAND PROCEDURES

** **

An evaluation wasperformed under the supervision and with the participation of our management,including our principal executive officer and principal financial officer, of theeffectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and15d-15(e) under the Securities Exchange Act of 1934) as of the end of theperiod covered by this Quarterly Report on Form 10-Q (“EvaluationDate”).  Based on the foregoing, ourmanagement concluded that our disclosure controls and procedures are effectiveto ensure that information required to be disclosed by us in reports that wefile or submit under the Exchange Act is recorded, processed, summarized andreported within the time periods specified in the Securities and ExchangeCommission rules and forms and such information is accumulated andcommunicated to our management, including our principal executive officer andprincipal financial officer, to allow timely decisions regarding requireddisclosure.

 

Subsequent to the Evaluation Date, as reported underItem 4.02 of the Form 8-K filed by the Company on November 9, 2009,on November 3, 2009, the management of the Company concluded that theCompany’s financial statements as of and for the period ended June 30,2009 as included in the Company’s Reports on Form 10-Q for such periodshould no longer be relied upon and should be restated to correct for errorsdetected by management.

 

Accordingly, subsequent to the Evaluation Date,management of the Company re-evaluated the effectiveness of our disclosurecontrols and procedures as of the end of the period covered by this report andidentified a deficiency in our disclosure controls and procedures.  We determined that our****unauditedconsolidated financial statements for the three and six months ended June 30,2009 contained an error with respect to the balance sheet classification of thePOS-Minerals interest in Eureka Moly, LLC (the “LLC”). We classified thePOS-Minerals interest as noncontrolling interest as of June 30, 2009 (andas minority interest within temporary equity as of December 31, 2008 priorto our implementation of FASB guidance for Noncontrolling Interests). After  completion of  a recent review and evaluation of the relatedLLC agreement  with POS-Minerals, management determined that POS-Mineralsinterest in the LLC is more appropriately  classified as temporary equitybecause of a provision in the LLC Agreement that  permits POS-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 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.  Based on this evaluation, our CEOand CFO  concluded that our disclosure controls and procedures were noteffective as of the end of the period covered by this report.

 

Management concluded the reason for this errorprimarily related to the lack of technical accounting expertise relating to interpretationof GAAP with respect to equity instruments with redemption characteristics andaccordingly there was a material weakness in our internal control overfinancial reporting as at June 30, 2009.

 

We have taken measures to establish effective disclosurecontrols and procedures and internal control over financial reporting,including reviewing all equity instruments to identify any securities that mayhave to be classified between liabilities and equity (in the mezzaninesection), as contingently redeemable noncontrolling interests, and implementingpolicies and procedures for the accounting of these securities.

 

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

 

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** **

**PART II**

** **

**OTHER INFORMATION**

** **

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

 

We are involved from timeto time in litigation incidental to our business. We believe that the outcomeof current litigation is not expected to have a material adverse effect on ourresults of operations or financial condition.

 

**ITEM1A.**                                            RISKFACTORS.

** **

Our Annual Report on Form 10-Kfor the year ended December 31, 2008, including the discussion under theheading “Risk Factors” therein, and this report describe risks that maymaterially and adversely affect our business, results of operations orfinancial condition.  The risks describedin our Annual Report on Form 10-K and this report are not the only risksfacing us. Additional risks and uncertainties not currently known to us or thatwe currently deem to be immaterial also may materially adversely affect ourbusiness, financial condition and/or operations.

 

**Special Note Regarding Forward-Looking Statements**

** **

Certain statements inthis report may constitute forward-looking statements, which involve known andunknown risks, uncertainties and other factors, which may cause actual results,performance or achievements of our Company, the Mt. Hope Project, LibertyProperty and our other projects, or industry results, to be materiallydifferent from any future results, performance or achievements expressed orimplied by such forward-looking statements. We use the words “may,” “will,” “believe,” “expect,” “anticipate,”“intend,” “future,” “plan,” “estimate,” “potential” and other similarexpressions 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. HopeProject;

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

·                  issues related to the management of the Mt. HopeProject pursuant to the Mt. Hope Joint Venture;

·                  risks related to the failure of POS-Minerals to makecontributions pursuant to the Mt. Hope Joint Venture;

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

·                  the estimation and realization of mineral reserves, ifany;

·                  the timing of exploration, development and productionactivities and estimated future production, if any;

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

·                  requirements for additional capital and the possiblesources of such capital;

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

·                  title disputes or claims; and

·                  limitations of insurance coverage.

 

You should not placeundue reliance on these forward-looking statements, which speak only as of thedate of this report.  Theseforward-looking statements are based on our current expectations and aresubject to a number of risks and uncertainties, including those set forthabove.  Although we believe that theexpectations reflected in these forward-looking statements are reasonable, ouractual 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.

 

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** **

**ITEM2.**                                                     UNREGISTEREDSALES OF EQUITY SECURITIES AND USE OF PROCEEDS

** **

None.

 

**ITEM3.**                                                     DEFAULTSUPON SENIOR SECURITIES

** **

None.

 

**ITEM 4.**                                                     SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

** **

We held our AnnualMeeting of Stockholders on June 18, 2009 (the “Annual Meeting”) to (1) electthree Class II members to our Board of Directors and (2) ratify theselection of PricewaterhouseCoopers LLP as our independent auditor.

 

At the time of the recorddate for our Annual Meeting, April 22, 2009, there were 71,977,875 sharesof our common stock outstanding.  At ourAnnual Meeting, a total of 40,612,230, or approximately 56% of our totaloutstanding shares, were represented in person or by proxy.

 

The results of our AnnualMeeting were as follows:

 

**(1)****                                ****Election of Three Class IIMembers to our Board of Directors**

 

Our stockholders electedthe following three Class II Members to serve as members of our Board ofDirectors:

 
| **Name**                    | ** ** | **Votes Cast For** | ** ** | **Votes Withheld** | ** ** |
|-----------------------------|------------|--------------------|------------|--------------------|------------|
| Ricardo M. Campoy           |       | 40,098,647         |       | 513,583            |       |
| R. David Russell            |       | 39,934,256         |       | 677,974            |       |
| Andrew G. Sharkey, III |       | 39,637,515         |       | 974,715            |       |

 

The terms of office ofdirectors Bruce D. Hansen, Jean-Pierre M. Ergas, Gary A. Loving, Mark A. Lettesand Richard F. Nanna continued after the Annual Meeting.

 

**(2)****                                ****Ratification of the Selection ofPricewaterhouseCoopers LLP as our Independent Auditor**

 

Our stockholders ratifiedthe selection of PricewaterhouseCoopers LLP as our independent auditor by thefollowing vote:

 
| For              |   | 40,229,970 |   |
|------------------|--------|------------|--------|
| Against          |   | 273,971    |   |
| Abstain          |   | 108,289    |   |
| Broker Non-Votes |   | 2,296,358  |   |
| Bank Non-Votes   |   | 4,922,383  |   |

 

**ITEM 5.**                                                     OTHER INFORMATION

** **

None.

 

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** **

**ITEM 6.**                                                     EXHIBITS

 
| **Exhibit  Number** | ** ** | **Description of Exhibit**                                                                                                                   |
|---------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------|
| 10.46†         |       | Form of Stay Bonus  Agreement (Filed as Exhibit 10.1 to our Current Report on Form 8-K  filed on May 12, 2009)           |
| 10.47†         |       | Daniel G. Zang Waiver and  Release Agreement (Filed as Exhibit 10.1 to our Current Report on  Form 8-K filed on May 20, 2009) |
| 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                                    |

 

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† Previously filed asindicated and incorporated herein by reference.

 

**SIGNATURES**

 

Pursuant to therequirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned, thereuntoduly authorized.

 

Dated: December 9, 2009

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

 

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