General Moly, through its 80% controlled subsidiary Eureka Moly, reported that a $12 million global settlement offer (the Good Neighbor Offer) presented on March 6, 2012, to Eureka County, Nevada, USA, and other stakeholders was rejected by Eureka County, without counter-offer.

The Good Neighbor Offer was made to principally resolve the outstanding water rights appeal, and was comprised of $3 million to be paid to the appellants immediately upon signing of an agreement and dismissal of all appeals before the Nevada District Court and $5 million contributed over time to the Diamond Valley Sustainability Trust. The funds were to have augmented the existing $4 million Diamond Valley Sustainability Trust announced in August 2010, and bring the total commitment to $12 million.

At its March 20 meeting, the Eureka County commissioners rejected the Good Neighbor Offer after minimal public discussion and debate, according to Eureka Moly. Additionally, the County had failed to identify to the public that the commissioners would take action on the Good Neighbor Offer in its published public agenda. The Good Neighbor Offer was made by Eureka Moly as a final good faith attempt prior to the upcoming hearing to settle the water dispute with Eureka County and other appellants, concerning the Nevada State Engineer’s Ruling granting the water applications to be used for the Mt Hope mine project. The Good Neighbor Offer required acceptance by all the stakeholders and Eureka County’s rejection of the global Good Neighbor Offer effectively prevents the other stakeholders from accepting the offer and ending the litigation. Eureka Moly looks forward to the April 3 hearing and subsequent ruling of the Nevada District Court.

“We reached out and made this offer to Eureka County and its residents as a Good Neighbor, with the goal of working together, to enhance the sustainability and properly manage water resources in both the Kobeh Valley and Diamond Valley water basins,” said Bruce D. Hansen, CEO, General Moly. “Unfortunately, we are disappointed with the Eureka County commissioners’ decision to continue down the path of unnecessary spending on legal action which further deprives the community of an opportunity to positively impact a decades’ old severe over-pumping situation in the Diamond Valley water basin, which has no relationship to the Mt. Hope project. We are moving forward aggressively. As we have stated when the Good Neighbor Offer was presented March 6, we remain extremely confident the State Engineer’s Ruling will be upheld. At the same time we will always discuss reasonable and rational concepts to resolve this situation.”

General Moly’s Mt. Hope project, located in central Nevada, is considered one of the world’s largest and highest grade molybdenum deposits.