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On July 31, 2012, General Moly (the "Company") (NYSE MKT and TSX: GMO) announced an update to the Mt. Hope Project's capital cost estimate, which has increased by $130 million or 11% in total. In addition, the Company has entered into a non-binding letter of intent with Hanlong (USA) Mining ("Hanlong") to provide additional capital to the Mt. Hope Project, which is anticipated to meet the incremental project funding requirements.
MT. HOPE PROJECT CAPITAL ESTIMATE
The Company has completed its review of capital cost requirements for the Mt. Hope Project based on current major equipment, labor, and material pricing and further engineering definition. The project capital was also updated for currently known permitting and regulatory requirements and includes the schedule impacts of permitting delays since the previous September 2008 feasibility study update, which was reconfirmed in November, 2009. The Mt. Hope Project has not materially changed in scope and is currently designed at 60% engineering completion with solid scope definition. Over this 4 year period, the overall capital requirement estimate now totals $1,284 million of which $197 million has already been spent. General Moly's 80% share of the increase is $104 million.
The largest affected category of the estimate is owners' cost which increased 48% or $82 million, driven primarily by schedule delays largely attributed to an extended permitting timeline, as well as increased actual and forecasted permitting costs, driven by additional permitting requirements. The mining equipment category increased by 12%. Over 70% of the initial mining fleet is now committed with firm pricing, under purchase agreements.
Construction, materials and plant facility costs are now estimated to be $582 million, an increase of 11% or $59 million over the previous estimate, driven primarily by construction labor costs and the pricing for specialized process equipment, although we have benefited from our strategically placed equipment orders for primarily crushing and grinding equipment in 2007 and 2008 resulting in lower pricing than currently available.