General Moly is potentially one of the world's largest producers of molybdenum (necessary for making steel out of iron). They want to start producing from their Idaho mines in 2009. In recent weeks they have announced two strategic moves.

1) Arcelo-Mittal the world's largest steel producer has purchased via private placement about 12.5% of the shares, giving the company $70 million to develop one of the two main projects. There is also a take-off agreement, whereby the steel producer will buy about 6.5 million pounds a year for five years, once the mine goes into production. There is a floor price significantly higher than the estimated cash costs of production, offset by a variable discount to spot moly prices above the floor. This is a non-exclusive deal.

2) Today a second deal was announced with POSCO, the third largest steel producer, giving POSCO the rights to acquire a 20% interest in the project, with payments of $50 million initially, $50 million in JUly next year and $70 million in the first quarter of 2009 when ready for production. POSCO takes off 10 million pounds a year.

What a great arrangement for a small company with a huge, unmined supply of a rare earth!!!