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Mt. Hope project get permits; some hurdles and funding issues remain
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Mt. Hope project get permits; some hurdles and funding issues remain


The Mt. Hope molybdenum mine project near Eureka has continued to move forward in the past month with more permit approvals. There are still a few hurdles to cross, and also an issue with the project financing arose this summer.

The permitsOn July 29 General Moly announced that “the company, through a subsidiary, received all the necessary water permits from the Nevada State Engineer for the Mt. Hope molybdenum project. In addition, the period for judicial review of the Nevada State Engineer’s approval of the water applications for the issuance of the water permits has expired and no requests for review were received.”

“There are no more protests available to anybody for our water permits, and there are no appeals pending on our BLM approval,” General Moly Vice President Pat Rogers said on August 26. General Moly has an 80 percent interest in the Mt. Hope project.

On Aug. 23 the Bureau of Land Management, Mount Lewis Field Office, published a Notice of Availability in the Federal Register for the Final Supplemental Environmental Impact Statement for the Mt. Hope project.

It was nearly three years ago, on Dec. 28, 2016, that the Ninth Circuit Court of Appeals issued a remand decision for further action on particular issues, and that decision led to the Final Supplemental EIS which was issued in August. The EIS includes an explanation of the usage of baseline values of zero for several air pollutants, a quantitative cumulative air quality impacts analysis, and a clarification of the status of certain springs and water holes under Executive Order Public Water Reserve No. 107.

The publication of the EIS on Aug. 23 opened a 30-day review period, and then a Record of Decision is expected to be issued.

“Issuance of the ROD constitutes approval from the BLM, subject to environmental protection measures and mitigation, to develop and operate the Mt. Hope Project molybdenum mine,” General Moly said in a press release.

Financing issues General Moly announced that the company has not received a stock purchase from Amer which was expected at the end of July.

General Moly and Amer entered into an Investment and Securities Purchase Agreement in 2015. Amer is a private, China-based multinational company that is one of the world’s largest advanced materials, fine machining, and downstream metals refining providers.

As part of the agreement, General Moly said, after the Mt. Hope project received its water permit approvals on July 29, Amer was supposed to purchase 20 million shares of General Moly common stock for $10 million within two days.

An Aug. 28 a press release from General Moly said that since Amer has not provided this funding, General Moly has engaged King & Spaulding, “widely recognized as one of the world’s leading law firms in international arbitration and litigation, to represent the company in its dispute against Amer International Group Co., Ltd.”

“We are very pleased to work with the attorneys at King & Spalding on this legal recourse,” said Bruce D. Hansen, chief executive officer of General Moly. “While we look forward to an opportunity to attempt to resolve the dispute with Amer, we are mindful that the dispute may need to be resolved in an arbitration. While we are confident in our position should the dispute move to arbitration, any award will likely not be available in the immediate future, if at all. We continue to seek immediate sources of liquidity, including evaluating potential strategic alternatives, working with the Company’s financial advisors XMS Capital Partners, Headwall Partners, and Odinbrook Global Advisors.”

“This is troubling for the company because it affects our liquidity, but it certainly doesn’t affect the quality or the status of the Mt. Hope project,” Rogers said. “It’s a great deposit, we’ve got our permits, and we will need to continue to pursue financing.”

GBRW’s concerns Great Basin Resource Watch, a nonprofit organization founded in 1994 by environmental, Native American and scientific community representatives, is the group that appealed the original EIS on the Mt. Hope project.

This August GBRW announced that they are opposing the renewal of the Water Pollution Control Permit for the Mt. Hope mine. On Sept. 4 the Nevada State Environmental Commission will hear GBRW’s arguments.

“We think there’s going to be groundwater contamination there,” GBRW Director John Hadder said on Aug. 28. “The mine pit lake is going to be a lot worse than they’re predicting. That’s really the gist of what the appeal is about.

“We would like to see an independent technical assessment. I know that this is something that the state doesn’t normally do, but we think that in a case like this, it might be valuable to have that.”

Rogers explained that General Moly has had the Water Pollution Control Permit for about five years, and the state has issued the renewal permit, but GBRW is appealing that renewal.

On Aug. 26 GBRW issued a press release about their appeal which details some of their issues with the Mt. Hope project:

“GBRW has been concerned that the proposed mine will be a water pollution source for hundreds of years and will waste and degrade Nevada’s water in a large mining pit lake.

“GBRW’s brief states that ‘The Potentially Acid Generating Waste Rock Disposal Facility will discharge acidic metal-laden leacheate to the groundwater and/or surface seeps for centuries to millennia as it weathers into the future.’ This is the conclusion of GBRW’s staff geochemist with 25 years of experience analyzing water quality for existing and proposed mines. GBRW is asking for Eureka Moly LLC to amend the waste rock management plan to evaluate long-term treatment of acid mine drainage including a credible estimation of the time frame for treatment and potential increased treatment costs, since current financial assurances do not address a perpetual management scenario.

“GBRW also contends that the Eureka Moly LLC predicted pit-lake water quality is seriously in error, and the pit-lake will violate Nevada regulations. As stated in the GBRW brief, ‘The pit lake water quality model algorithm contains an error that produces a systematic underestimate in the calculated load of solutes released from sulfide bearing wall rock and to the lake.’ Thus, the error in the pit-lake water quality requires a reevaluation of whether the mining pit lake will be a hazard to wildlife and the community.

“Carolyn Bailey, a resident of Diamond Valley nearest to the proposed mine said, ‘The Bailey Family has been ranching and farming in Diamond Valley since 1863. Our ranch and farms are located close enough to the Mount Hope mine site to be adversely affected by mine caused impairment of air and water, increased truck traffic, and the very real damage to our environment from the massive pumping and resulting further drawdown of the groundwater. The costs will be irretrievable and irreparable and will be paid by our family and community.’

“’The Mt. Hope Mine Project would be one of the largest open pit mines in the nation. The environment around Mt. Hope will be obliterated if this project goes forward as planned. The mine’s federal permit was revoked by court order in 2016 due an inadequate EIS and the state should require independent technical assessment of the mine to avoid permitting a disaster,’ said John Hadder, director of Great Basin Resource Watch.”

General Moly response “I think everything that Great Basin is appealing is without merit and that the State Environmental Commission will uphold our permit,” Rogers said on Aug. 26.

“The NDEP (Nevada Division of Environmental Protection) is charged with reviewing studies, applications for permits; all the technical studies that support those applications.” Rogers said. “They’ve got a great history. They’ve been permitting mines for decades now, and they do a very thorough job of reviewing the work before they make their decision. Mt. Hope was no exception. We did a lot of work. We did hundreds if not thousands of analyses of waste rock. We did a cutting edge, state of the art hydrologic and geochemical model to look at the predicted future pit lake water quality.”

“I don’t think it’s likely they’re going to overturn the EIS,” Rogers said, “and I don’t think it’s likely the State Environmental Commission is going to agree that the state shouldn’t have issued our permit. So I’m very confident we’re going forward past the permitting stage and into the financing stage.”

“We’re really excited,” Rogers said. “It’s a phenomenal deposit. It’s certainly going to be developed. The global economy and global demands for infrastructure and all the other uses of molybdenum and stainless steel dictate that the project will be developed, and we think that we’re sitting at the right place and time to develop it.”

About 70 percent of molybdenum produced is used in stainless steel, and a lot is used in specialty and high-alloy steels. Molybdenum provides steel with resistance to corrosion and temperature changes.

The Mt. Hope mine is expected to employ about 400 people and produce around 40 million pounds of molybdenum per year for the first five years of its 30 year mine life. This means the mine would be producing about five percent of the molybdenum produced worldwide.

In an April 16, 2019 letter to shareholders, General Moly Chief Executive Officer Bruce D. Hansen wrote, “Strengthening moly demand from rising output in stainless steel and specialty steels for the oil and gas industry in 2018, including the burgeoning liquid natural gas global trade, is expected to continue. Moly prices have risen despite successive record global moly production of 683 million pounds in 2017 and approximately 700 million pounds in 2018.”


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