Nov 21 2007
ArcelorMittal, the world's largest steel company, has announced today it has signed an agreement to acquire a 12.6% equity stake (10% of fully diluted shares) in General Moly, Inc. for a total consideration of US$70 million.
General Moly is a US based molybdenum mineral development, exploration and mining company listed on the American Stock Exchange. Their primary asset is the Mt Hope project located in central Nevada. Combined with a second molybdenum property, the Hall-Tonopah project, also located in central Nevada, the Company's aim is to become the largest primary molybdenum producer worldwide by the middle of the next decade.
In addition to the equity purchase, ArcelorMittal has signed a letter of intent to enter into a long term off-take agreement. This agreement, subject to final documentation, would allow for the supply of approximately 6.5 million pounds per year of molybdenum, or 26% of ArcelorMittal's anticipated annual required consumption, for five years, beginning once Mt Hope commences production, which is expected in the 2nd half of 2010.
As a result of the acquisition, ArcelorMittal has become the second largest shareholder of the Company. The funds will be primarily utilised in the development of General Moly's Mt Hope molybdenum project. The stock purchase is expected to close, subject to customary conditions, within 30 days.