- Historical Drill Intercepts Indicate Potential For High-Grade, Copper-Silver Target
- New Results from Geophysical Survey Highlight Anomalies for Follow-Up Drilling
LAKEWOOD, Colo., March 1, 2018 - General Moly, Inc. (the "Company" or "General Moly") (NYSE American and TSX: GMO), the only western-exchange listed, pure play molybdenum development company, reports that based on a review of historic drill results, the Company has identified a potential high-grade, copper-silver exploration target along with a significant zinc mineralized area at the Mt. Hope Project site, southeast of the Mt. Hope's molybdenum deposit in central Nevada.
Given the presence of this copper-silver target ("Cu-Ag Target") and zinc mineralization, General Moly undertook a high-intensity, ground-based Induced Polarization ("IP") survey to determine if potential continuity and the size of the mineralization would justify additional exploration and evaluation. The IP survey was completed in February 2018 by Quantec Geoscience and indicates a fairly continuous group of high chargeability anomalies that appear aligned with the recently identified Cu-Ag Target.
These anomalies lie between 100 feet and 1,000-plus feet from the surface and trend northeast for over 1,000 feet. The IP survey indicates that the anomalies could continue further to the north-northeast and to the south where they appear to dip to the east.
Historic Data Review & Historical Drill Results Reveal Copper-Silver-Zinc Potential
The evaluation of historic information by General Moly and the results of the IP survey form the basis to commence a robust geologic review and further evaluation via a new 2018 exploration program, focused primarily on a high-grade Cu‑Ag Target, subject to further financing.
From as early as 1886, and sporadically until circa 1975, the Mt. Hope area produced zinc as well as by-product lead, copper, silver, and cadmium from small-scale underground mines. With the strong recovery in zinc prices last year, General Moly staff conducted an evaluation of past exploration and drill data from the 1930s to 2008 from prior explorers, including Universal Exploration (a subsidiary of U.S. Steel), Callahan Mining Company, the U.S. Bureau of Mines, Mount Hope Mines Inc. ("MHMI"), Phillips Petroleum, Asarco, Exxon, Cyprus Amax, and Phelps Dodge, as well as General Moly.
From this review, the General Moly staff defined an anomalous zinc mineralized area of interest, characterized by skarn mineralization of carbonate rock ("Skarn Area"), slightly overlapping the southeastern portion of the ultimate pit outline of the Mt. Hope molybdenum open pit mine plan. The Company examined and re-cataloged the historic drill holes, and prioritized the drill data for zinc intercepts at a 0.5% cutoff and within 400 feet of the surface as a potential surface mineable target.
In addition to examining the zinc mineralization, the Company keyed in on a high-grade Cu-Ag Target that was initially identified in the 1930s by one hole drilled by Universal Exploration, and followed up by MHMI's fan-pattern drilling of six holes in 1968 - 1969 from an underground platform at roughly the 6,540-foot elevation in the lower section of historic underground workings. MHMI's total program encompassed drilling a total of 1,905 feet. Phillips Petroleum also intersected this target area with 3 holes drilled in 1971 as part of a broad-based 18-hole, 16,270-foot program.
This Cu-Ag Target appears to be about 600 to 700 feet from the surface and, if it warrants ultimate development, it could be potentially accessed by a decline from either the surface or the ultimate Mt. Hope molybdenum pit.
Historic Drill Data Highlights
Historic drill intercept highlights at the Cu-Ag Target include:
MHMI Jensen DDH-3:
- 2.24% Cu and 4.9 opt Ag over 9 feet
- 6.34% Cu over 21 feet, including 6.18% Cu and 13.7 opt Ag over 2 feet, and 7.0% Cu over 17 feet
MHMI Jensen DDH-5:
- 4.88% Cu and 9.6 opt Ag over 14 feet, including 13.91% Cu and 29.6 opt Ag over 2 feet and 3.58% Cu and 7.0 opt Ag over 8 feet
- 1.98% Cu and 4.55 opt Ag over 23 feet, including 3.00 % Cu and 7.3 opt Ag over 12 feet
Holes DDH-3 and UPMH-2 are 347 feet apart. And, holes DDH-5 and UPMH-2 are 417 feet apart.
To date, given this represents an early-stage copper-silver-zinc exploration program of the Skarn Area, most of the historic data discussed here comes from historic reports and cannot be independently confirmed and lacks the modern standards of quality assurance and controls for samples and assays. Such data may not be relied upon for any evidence or likelihood of a mineral resource, mineral reserve or mineral deposit. The Skarn Area does not contain any mineral resource estimate as defined by the Canada National Instrument 43-101 ("NI 43-101") or any proved or probable reserves as defined by the United States Securities and Exchange Industry Guide 7, nor is there any certainty that further exploration will result in any targets becoming part of a mineral resource or mineral reserve.
Ground IP Survey Results Highlights
The IP survey, which focused on the Cu-Ag Target, comprised six lines each of a 2,400-foot length with 2 lines running SW to NE (lines 1 and 6) and 4 lines (lines 4, 3, 2 and 5) running SE to NW and perpendicular to lines 1 and 6.
The survey found an anomalous high chargeability zone located at between 100 to 1,000 feet of depth with thicknesses between 200 and 800 feet, up to 1,000 feet of width and measuring over 1,000 feet trending north-northeast.
In addition, results from all the IP lines indicate that the anomalous zone remains open at depth. Parallel IP lines 1 and 6 also indicate that the anomalous zone appears to trend to the northeast dipping towards the southwest, remaining open. Based on the IP results and historic drilling data, the Cu-Ag Target appears to lie at a 40-degree angle down dip.
Permitting and Water Rights
The projected boundaries of the Skarn Area are located on private land that are subject to leasehold rights held by the Mt. Hope project operator, Eureka Moly, LLC ("EMLLC"). General Moly holds an 80% membership interest in EMLLC, along with its joint venture partner POS-Minerals, a division of POSCO, a large South Korean steel company. As a result of the private land ownership, it is expected that minimal federal and state permitting would be required to further explore the Cu-Ag Target.
In the event of a successful exploration program and economic studies warranting development, the existing Plan of Operations for the adjacent Mt. Hope molybdenum project would likely be amended to contemplate either offsite-processing or onsite-processing in the future. The Company anticipates working with the U.S. Bureau of Land Management ("BLM") to determine the appropriate level of documentation that would be required to comply with the National Environmental Policy Act ("NEPA").
In addition, the state of Nevada Department of Environmental Protection will review the scope of any proposed mining and processing plans to determine modifications to the Water Pollution Control, Air Quality, and Reclamation Permits that could be required. The Company controls existing water rights for mining and processing at the Mt. Hope Project site under EMLLC's lease with MHMI, independent of the adjacent Mt. Hope molybdenum project. The Company believes its rights are sufficient to support anticipated proposed mine and processing needs at the Cu-Ag Target.
As disclosed in the Company's interim report on Form 8K filed on February 28, 2018, EMLLC and MHMI entered into an amendment to their lease agreement at the Mt. Hope Project. The amendment primarily concerns non-molybdenum royalty arrangements that are applicable to the Cu-Ag Target and zinc mineralization. The amendment provides for net returns production royalties of 4% for all non-molybdenum minerals.
With respect to zinc production only, there is the potential to increase the 4% royalty to 5% dependent on increasing zinc prices. These royalties are consistent with other royalty mining practices in Nevada. The full text of the amendment was filed with the 8K report and is available for review at sec.gov and the Company's website http://investor.generalmoly.com/phoenix.zhtml?c=181598&p=irol-sec.
2018 Exploration Program
The Mt. Hope molybdenum project is located 21 miles north of Eureka, Nevada, and has approximately 65% of engineering completed with no current engineering work in progress, while it is undergoing final phases of permitting to reobtain its water permits and Record of Decision.
The Company exploration thesis for the Cu-Ag Target is to demonstrate that the apparent copper and silver mineralized envelope lies unexploited below the previously mined horizontal bands of zinc, and is open at depth and to the northeast. The Company's goal is to define sufficient tonnage to economically justify an underground operation with either toll milling or development of a small mill with throughput of approximately 1,000 to 2,000 short tons per day, and, if built, could also process zinc-lead-copper-silver material in the future.
Commenting on the path ahead, General Moly Chief Executive Officer Bruce D. Hansen said, "We are extremely excited by the exploration findings to date, which were driven by our internal efforts and exceeded our expectations in terms of the scope of targets. We look forward to moving ahead with further geologic assessment and further exploration efforts later this year, in what we feel is an improving commodities' market environment of rising molybdenum, copper, zinc, and silver prices. We also feel that the future successful development of any of these non-moly opportunities, if warranted, should be value added and synergistic to our ultimate goal of building one of the world's largest primary moly mines."
A small mill, if built to process ore from the Skarn Area, could be used for processing copper, zinc, lead, and silver ores that will be encountered during the much longer life of the molybdenum operation.
To date the preliminary work was undertaken solely by General Moly. The Company has presented the promising findings described herein to POS-Minerals, and is discussing value-sharing investment options. Any mining operation to exploit economic mineralization will require the approval of POS-Minerals.
Further exploration work expected in 2018 will entail review of historic logs and core to update the geologic interpretation of the Skarn Area, potential re-assaying of historic drill samples, further review of the IP results, and geologic and lithological interpretation to define a new drilling program. General Moly engaged Independent Mining Consultants of Tucson, Arizona, to support compilation and review of the historic drill database.
The Company may require financing to fund the full exploration program for 2018. The pace and scope of the exploration program will be subject to the working capital needs of General Moly.
About General Moly
General Moly is a U.S.-based, molybdenum mineral exploration and development company listed on the NYSE American (NYSE AMER), recently known as the NYSE MKT and former American Stock Exchange, and the Toronto Stock Exchange under the symbol GMO. The Company's primary asset, an 80% interest in the Mt. Hope Project located in central Nevada, is considered one of the world's largest and highest grade molybdenum deposits. Combined with the Company's wholly-owned Liberty Project, a molybdenum and copper property also located in central Nevada, General Moly's goal is to become the largest primary molybdenum producer in the world.
Molybdenum is a metallic element used primarily as an alloy agent in steel manufacturing. When added to steel, molybdenum enhances steel strength, resistance to corrosion and extreme temperature performance. In the chemical and petrochemical industries, molybdenum is used in catalysts, especially for cleaner burning fuels by removing sulfur from liquid fuels, and in corrosion inhibitors, high performance lubricants and polymers.