UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

For the transition period from              to          

Commission File Number: 001-32986

General Moly, Inc.
(Exact name of registrant as specified in its charter)

1726 Cole Blvd., Suite 115
Lakewood, CO 80401
Telephone:  (303) 928-8599
(Address and telephone number of principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.  YES x NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES o NO x

The number of shares outstanding of registrant’s common stock as of October 27, 2008 was 71,842,646.

PART I - FINANCIAL INFORMATION

ITEM 1.                                                     FINANCIAL STATEMENTS

GENERAL MOLY, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited - Dollars in thousands except per share amounts)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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GENERAL MOLY, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited - In thousands, except per share amounts)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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GENERAL MOLY, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited – In thousands)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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GENERAL MOLY, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — DESCRIPTION OF BUSINESS

General Moly, Inc. (“we,” “us,” “our,” “the Company,” or “General Moly”) is a Delaware corporation originally incorporated as General Mines Corporation on November 23, 1925.  In 1966, the Company amended its articles of incorporation to change its name to Idaho General Petroleum and Mines Corporation, and amended its articles again in 1967, changing its name to Idaho General Mines, Inc. On October 5, 2007, we reincorporated in the State of Delaware (the “Reincorporation”) through a merger involving Idaho General Mines, Inc. and General Moly, Inc., a Delaware corporation that was a wholly owned subsidiary of Idaho General Mines, Inc. The Reincorporation was effected by merging Idaho General Mines, Inc. with and into General Moly, with General Moly being the surviving entity.  For purposes of the Company’s reporting status with the U.S. Securities and Exchange Commission, General Moly is deemed a successor to Idaho General Mines, Inc.

We were in the exploration stage until October 4, 2007 when our Board of Directors (the “Board”) approved the development of the Mt. Hope molybdenum property (the “Mt. Hope Project”) in Eureka County, Nevada.  The Company is now in the development stage and is currently proceeding with the development of the Mt. Hope Project.  We are also conducting exploration and evaluation activities on our Liberty molybdenum property (the “Liberty Property” formerly referred to as the “Hall-Tonopah Property”) in Nye County, Nevada.

Effective as of January 1, 2008, we contributed all of our interest in the assets related to the Mt. Hope Project, including our lease of the Mt. Hope Project, into a newly formed entity, Eureka Moly, LLC, a Delaware limited liability company (“Eureka Moly”), and in February 2008 (the “Closing Date”) entered into a joint venture for the development and operation of the Mt. Hope Project (the “Joint Venture”) with POS-Minerals Corporation (“POS-Minerals”) an affiliate of POSCO, a large Korean steel company.  Under the Joint Venture, POS-Minerals owns a 20% interest in Eureka Moly and General Moly, through a wholly owned subsidiary, owns an 80% interest.

The interim Condensed Consolidated Financial Statements of the Company are unaudited.  In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included.  All such adjustments are, in the opinion of management, of a normal recurring nature.  The results reported in these interim Condensed Consolidated Financial Statements are not necessarily indicative of the results that may be reported for the entire year.  These interim Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements included in our Annual Report on Form 10-KSB for the year ended December 31, 2007.

Certain amounts for the three and nine months ended September 30, 2007 have been reclassified to conform to the 2008 presentation.

NOTE 2 — LIQUIDITY AND CAPITAL REQUIREMENTS

On October 4, 2007, the Board approved the development of the Mt. Hope Project as contemplated in our Bankable Feasibility Study (the “Bankable Feasibility Study”).  The Company has completed basic engineering of the Mt. Hope Project and has updated its Bankable Feasibility Study based upon having completed 25% of the engineering.

The development of the Mt. Hope Project has an estimated total capital requirement ranging from approximately $1.1 billion to $1.2 billion, comprised of initial development costs of approximately $1,040.0 million (in 2008 dollars); $65.0 million in cash bonding requirements; $26.0 million in Advance Royalty Payments (as hereinafter defined); $16.0 million in pre-payments and amounts necessary for working capital.  Depending on the ultimate capital structure to finance the project, additional costs may be incurred related to financing.  Through September 30, 2008, Eureka Moly has placed approximately $228.5 million in equipment orders and has pre-paid $12.6 million into an escrow arrangement for electricity transmission services.  The original estimated total capital

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requirement was approximately $1.0 billion, comprised of initial development costs in excess of $850.0 million (in 2007 dollars); $53.0 million in cash bonding requirements; $22.0 million in Advance Royalty Payments; and amounts necessary for working capital.  The total increase in the estimated initial development costs compared with the August 2007 Bankable Feasibility Study amount was primarily a result of increases to construction labor rates, commodity prices (primarily fuel costs), indirect construction costs, increase in quantity for construction materials and Company salary and wages.

In February 2008, we entered into the Joint Venture, the terms of which reduced our funding requirements for the Mt. Hope Project by up to 20%.  Under the terms of the Joint Venture, POS-Minerals is required to provide up to $170.0 million and 20% of the costs incurred after January 1, 2008.  Of the $170.0 million, $50.0 million was received in February 2008, $50.0 million was received in June 2008, and the remaining $70.0 million and 20% of the costs incurred after the Closing Date (the “Third Contribution Amount”) is to be received once the Mt. Hope Project receives the necessary permits to develop and operate the Mt. Hope Project (the “POS-Minerals Third Contribution Date”).  Until the POS-Minerals Third Contribution Date, we are required to fund development costs of the Mt. Hope Project that in the aggregate exceed previous POS-Minerals contributions.  The obligations of POS-Minerals to contribute the Third Contribution Amount may be reduced or eliminated if the necessary permits to develop and operate the Mt. Hope project are not received by December 31, 2009.

Additional capital will be required through the commencement of Mt. Hope processing which is estimated to begin in late 2010.  Our ability to develop the project on time and on budget is dependent on, among other things, the permitting process and our ability to raise the necessary capital to fund the Mt. Hope Project both in sufficient amount and in a timely manner.  Additionally, if the currently estimated costs of the Mt. Hope Project are exceeded we will need to raise additional capital to fund such overruns.

We do not currently have the capital necessary to complete the Mt. Hope Project and, accordingly, plan to raise the capital on an ongoing basis when needed.  We currently estimate needing between $600-$700 million to fully finance the Mt. Hope project.  The Company is currently, and will on an ongoing basis be, pursuing the most efficient sources of funding for the project including, but not limited to, the equity markets, the bank project finance markets and the high yield capital debt markets.  The Company is also evaluating additional support from current strategic partners, the possibility of a sale of another minority interest in the Mt. Hope project to other strategic partners, debt from private investment groups as well as the continued monitoring of the capital markets as potential sources of interim project financing needs.  Recent disruptions in national and international credit markets have led to very illiquid and volatile conditions.  There is a scarcity of credit and lenders are imposing tighter lending standards and higher interest rates on loans.  Our ability to obtain the necessary funding for the Mt. Hope Project as well as the terms for such funding may be adversely affected by these disruptions in the credit markets.  Our existing cash on hand at September 30, 2008 should be sufficient to fund planned operations for the Mt. Hope Project, as well as our other planned operations through the first quarter of 2009.  If we are unable to raise capital when needed, it will be necessary to develop alternative plans that could delay the development and completion of the Mt. Hope Project.  There is no assurance that we will be able to obtain the necessary financing for the Mt. Hope Project on terms acceptable to us, or at all.

In September 2008 we appointed Barclays Capital and Credit Suisse Securities (USA) LLC as co-lead project finance arrangers to structure and arrange the financing package for the Mt. Hope Project.

We also require capital to continue the exploration and evaluation of the Liberty Property, as well as continue payment of ongoing general and administrative costs associated with supporting our planned operations.

NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies is presented to assist in understanding the financial statements.  The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity.  These accounting policies conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”) and have been consistently applied in the preparation of the financial statements.

Accounting Method

Our financial statements are prepared using the accrual basis of accounting in accordance with U.S. GAAP.  At December 31, 2007, all of our subsidiaries were wholly owned.  In February 2008, we entered into the Joint Venture which establishes our ownership interest in Eureka Moly at 80%.  At September 30, 2008, the consolidated financial

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statements include all of our wholly owned subsidiaries and Eureka Moly.  The POS-Minerals contributions attributable to their 20% interest are shown as Minority Interest in the financial statements.

Estimates

The process of preparing financial statements requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses.  Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements.  Accordingly, upon settlement, actual results may differ from estimated amounts.

Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of three months or less to be cash equivalents.  The restricted cash of Eureka Moly represents the unspent amount of the POS-Minerals contributions, which are available for the continuing development of the Mt. Hope Project.

Exploration and Development Stage Activities

We were in the exploration stage from January 2002 until October 4, 2007.  On October 4, 2007, our Board approved the development of the Mt. Hope Project as contemplated in the Bankable Feasibility Study and we then entered into the Development Stage.  We have not realized any revenue from operations.  We will be primarily engaged in development of the Mt. Hope Project and exploration and evaluation of the Liberty Property until we enter the production stage.

Fair Value of Financial Instruments

Our financial instruments as defined by Statement of Financial Accounting Standards No. 157, “Fair Value Measurements,” include cash, restricted cash, accounts payable and accrued liabilities.  All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at September 30, 2008 and December 31, 2007.

Basic and Diluted Loss Per Share

Loss per share was computed by dividing the net loss by the weighted average number of shares outstanding during the period.  The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding.  Outstanding warrants to purchase 7,455,434 and 11,861,015 shares of common stock, options to purchase 4,175,490 and 3,777,500 shares of common stock and unvested stock awards totaling 195,000 and 270,000 at September 30, 2008 and 2007, respectively, were not included in the computation of diluted loss per share for the three and nine months ended September 30, 2008 and 2007, respectively, because to do so would have been antidilutive.  Therefore, basic loss per share is the same as diluted loss per share.

Mineral Exploration and Development Costs

All exploration expenditures are expensed as incurred.  Significant property acquisition payments for active exploration properties are capitalized.  If no economic ore body is discovered, previously capitalized costs, in excess of the property value, are expensed in the period the property is abandoned.  Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines, are capitalized and amortized on a units-of-production basis over proven and probable reserves.

Should a property be abandoned, its capitalized costs are charged to operations.  The Company charges to the consolidated statement of operations the allocable portion of capitalized costs attributable to properties sold.  Capitalized costs are allocated to properties sold based on the proportion of claims sold to the claims remaining within the project area.

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Mining Properties, Land and Water Rights

Costs of acquiring and developing mining properties, land and water rights are capitalized as appropriate by project area.  Exploration and related costs and costs to maintain mining properties, land and water rights are expensed as incurred while the property is in the exploration and evaluation stage.  Development and related costs and costs to maintain mining properties, land and water rights are capitalized as incurred while the property is in the development stage.  When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production basis over proven and probable reserves.  Mining properties, land and water rights are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment.  If a property is abandoned or sold, a gain or loss is recognized and included in the consolidated statement of operations.

Provision for Taxes

Income taxes are provided based upon the liability method of accounting pursuant to Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (hereinafter “SFAS 109”).  Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end.  A valuation allowance is recorded against the deferred tax asset if management does not believe the Company has met the “more likely than not” standard imposed by SFAS 109 to allow recognition of such an asset.

Reclamation and Remediation

Expenditures for ongoing compliance with environmental regulations that relate to current operations are expensed or capitalized as appropriate.  Expenditures resulting from the remediation of existing conditions caused by past operations that do not contribute to future revenue generations are expensed as incurred.  Liabilities are recognized when environmental assessments indicate that remediation efforts are probable and the costs can be reasonably estimated.

Estimates of such liabilities are based upon currently available facts, existing technology and presently enacted laws and regulations taking into consideration the likely effects of inflation and other societal and economic factors, and include estimates of associated legal costs.  These amounts also reflect prior experience in remediating contaminated sites, other companies’ clean-up experience and data released by The Environmental Protection Agency or other organizations.  Such estimates are by their nature imprecise and can be expected to be revised over time because of changes in government regulations, operations, technology and inflation.  Recoveries are evaluated separately from the liability and, when recovery is assured, the Company records and reports an asset separately from the associated liability.

Accounting Pronouncements—Recent

In September 2006, the FASB issued FASB Statement No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of SFAS 157 were adopted on January 1, 2008. In February 2008, the FASB staff issued Staff Position No. 157-2 “Effective Date of FASB Statement No. 157” which delayed the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities which will be effective for our fiscal year beginning January 1, 2009.

SFAS 157 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair value hierarchy under SFAS 157 are described below:

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities.

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Level 2 – Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 – Prices or valuation techniques that require inputs that are both significant to fair value measurement and unobservable (supported by little or no market activity).

The Company’s cash, restricted cash, and cash equivalents are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices.  The cash instruments that are valued based on quoted market prices in active markets are primarily money market securities.

In February 2007, the FASB issued FASB Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value, with the objective of improving financial reporting by mitigating volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The provisions of SFAS 159 were adopted January 1, 2008. The Company did not elect the Fair Value Option for any of its financial assets or liabilities and therefore the adoption of SFAS 159 had no impact on our consolidated financial statements.

In December 2007, the FASB issued FASB Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements- an amendment of ARB No. 51” (“SFAS 160”), which establishes accounting and reporting standards pertaining to ownership interests in subsidiaries held by parties other than the parent, the amount of net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest, and the valuation of any retained noncontrolling equity investment when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 is effective for our fiscal year beginning January 1, 2009. When adopted the minority interest will be reclassified as equity attributable to outside shareholders within total equity for all periods presented.

NOTE 4 — MINING PROPERTIES, LAND AND WATER RIGHTS

We currently have interests in two mining properties that are the primary focus of our operations.  The Mt. Hope Project is currently in the development stage and the Liberty Property is in the exploration and evaluation stage.

The Mt. Hope Project.  We are currently in the process of developing the Mt. Hope Project.  From November 2004 to January 2008, we owned the rights to 100% of the Mt. Hope Project.  In February 2008, we entered into the Joint Venture with POS-Minerals and we now own 80% of the Mt. Hope Project and POS-Minerals owns the remaining 20%.  While these ownership interests and/or the required contributions under the Joint Venture can change based on our failure to satisfy specified conditions, including the receipt of the necessary operating permits by December 31, 2009, failure to achieve production by December 31, 2011 for reasons other than force majeure, or non-payment of amounts due under the Joint Venture by either party, we expect the ownership interests in the Joint Venture to remain as they are now through the life of the project and the contributions to be received in the amounts that follow.

Pursuant to the terms of the Joint Venture, POS-Minerals agreed to make cash contributions to the Joint Venture in the aggregate amount of $170.0 million plus their 20% share of all development costs incurred from the Closing Date through the POS-Minerals Third Contribution Date in exchange for their 20% interest, of which $50.0 million was received in February 2008, $50.0 million was received in June 2008 (the “February 2008 and June 2008 Contributions”), and the Third Contribution Amount is to be received on the POS-Minerals Third Contribution Date.  These initial funds are available to fund the Mt. Hope Project development costs incurred after the Closing Date.  Additionally, during the third quarter of 2008, we paid to POS-Minerals $3.0 million as a final purchase price adjustment based on the terms of the Joint Venture related to the difference in the budgeted versus actual expenditures of the Mt. Hope Project prior to the Closing Date.

We are required, pursuant to the terms of the Joint Venture, to advance funds required for the development of the Mt. Hope Project in excess of the February 2008 and June 2008 Contributions until the POS-Minerals Third Contribution Date, at which point POS-Minerals is required to reimburse us for their 20% share of all development costs incurred from the Closing Date through the POS-Minerals Third Contribution Date.  All costs incurred after

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the POS-Minerals Third Contribution Date will be allocated and funded pro rata based on each party’s ownership interest.

Our rights in the Mt. Hope Project are subject to the terms of the lease described further in Note 9.

The Liberty Property.  We are currently in the process of exploration and evaluation of the Liberty Property.

Summary.  The following is a summary of mining properties, land and water rights at September 30, 2008 and December 31, 2007 (in thousands):

NOTE 5 — COMMON STOCK WARRANTS

Nine Months ended September 30, 2008

During the nine months ended September 30, 2008 we issued 125,930 shares of common stock upon the cashless exercise of warrants and 4,437,523 shares of common stock were issued upon the cash exercise of warrants in the amount of $20.3 million.

The following is a summary of common stock warrant activity from January 1, 2007 through the nine months ended September 30, 2008:

Of the warrants outstanding at September 30, 2008, 6,455,434 are exercisable at $3.75 per warrant and expire February 2011 and 1,000,000 are exercisable at $10.00 per share once General Moly has received financing necessary for the commencement of commercial production at the Mt. Hope project and will expire one year afterwards.

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NOTE 6 — PREFERRED STOCK

Pursuant to our Certificate of Incorporation we are authorized to issue 10,000,000 shares of $.001 per share par value preferred stock.  The authorized but unissued shares of preferred stock may be issued in designated series from time to time by one or more resolutions adopted by our Board.  The directors have the power to determine the preferences, limitations and relative rights of each series of preferred stock.  At December 31, 2007 and September 30, 2008, no shares of preferred stock were issued or outstanding.

NOTE 7 — EQUITY INCENTIVES

During 2006, our Board and stockholders adopted the Company 2006 Equity Incentive Plan (the “2006 Plan”).  In October 2007, our stockholders approved an amendment to the 2006 Plan increasing the amount of shares that may be issued under the 2006 Plan from 3,500,000 to 5,100,000.  During 2004, our Board and stockholders adopted the Company 2003 Stock Option Plan (the “2003 Plan” and together with the 2006 Plan, the “Plans”).  The purpose of the Plans is to give us greater ability to attract, retain, and motivate our officers and key employees.  The Plans are intended to provide us with the ability to provide incentives more directly linked to the success of our business and increases in stockholder value.

Under the 2006 Plan, our Board is authorized to grant incentive stock options (“ISOs”) to employees (pursuant to Internal Revenue Code 422), non-statutory stock options, restricted stock awards, restricted stock units and stock appreciation rights.  The aggregate number of shares of common stock that may be issued pursuant to awards granted under the 2006 Plan will not exceed 5,100,000, plus the number of shares that are ungranted and those that are subject to reversion under the 2003 Plan.  As of September 30, 2008, the maximum number of shares available for issuance under the 2003 Plan was 360,000 shares and under the 2006 Plan was 799,792 shares.  Shares under the 2003 Plan that become eligible for awards under the 2006 Plan may not be granted again under the 2003 Plan.

The following is a summary of our equity incentive plans as of September 30, 2008:

(1)             The aggregate number of shares of common stock that may be issued pursuant to awards granted under the 2006 Plan will not exceed 5,100,000, plus the number of shares that are ungranted and those that are subject to reversion under 2003 Plan.  Shares under the 2003 Plan that become eligible for awards under the 2006 Plan may not be granted again under the 2003 Plan.

Stock Options

During the nine months ended September 30, 2008, we granted 589,990 options under the 2006 Plan with an exercise price ranging from $6.71 to $11.45 with vesting at various dates through 2011.  These options were granted to officers and employees of the Company.  The fair value of each option is estimated on the grant date using the Black-Scholes Option Price Calculation.  The following assumptions were made in estimating the fair value:  risk free interest rate of 1.7% to 5.2%; volatility of 85% to 104%; dividend rate of 0%; and expected life of from 3.5 to 5.5 years.  The total value of options awarded during the nine months ended September 30, 2008 was calculated at

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$3.4 million.  Expense was recorded of $1.3 million and $1.8 million was capitalized as part of development costs for the options that were earned during the nine months ended September 30, 2008.

The following is a summary of stock option activity for the nine months ended September 30, 2008:

Stock Awards under the 2006 Plan

During the year ended December 31, 2007, we issued 250,000 shares of common stock to an officer of the Company that were earned based on achieving certain performance based milestones.  Additionally, during the year ended December 31, 2007, we reserved for issuance 535,000 shares of non-vested common stock for officers and employees of the Company of which 280,000 were issued upon achievement of certain performance based milestones in the nine months ended September 30, 2008 and 60,000 shares were forfeited and removed from the shares reserved upon an officer’s resignation on August 1, 2008.  The remaining 195,000 will vest and be issued based on the achievement of certain performance based milestones established for each person.

During the nine months ended September 30, 2008 and the year ended December 31, 2007, we issued 133,550 and 160,000 shares, respectively, to directors that vest over one and two year periods in exchange for services as Board members.  During the nine months ended September 30, 2008, two of the directors retired, forfeiting a total of 63,334 shares of such stock.  Also during the nine months ended September 30, 2008 and the year ended December 31, 2007, we issued 10,000 shares and 5,000 shares, respectively, to retiring Board members in exchange for services rendered.

During the nine months ended September 30, 2008 we issued 40,002 shares of unvested common stock to employees.  These shares vest based on employees’ service period over one, two and three year periods.

The total value of stock awards granted and expensed during the nine months ended September 30, 2008 was $1.3 million and $0.7 million, respectively.  The total value of stock awards granted during the year ended December 31, 2007 was $3.2 million of which $1.9 million was expensed and $1.3 million was capitalized as part of development costs.

NOTE 8 — INCOME TAXES

At September 30, 2008 and December 31, 2007, we had deferred tax assets principally arising from the net operating loss carry forwards for income tax purposes multiplied by an expected rate of 35%.  As our management cannot determine that it is more likely than not that we will realize the benefit of the deferred tax assets, a valuation allowance equal to the deferred tax asset has been established at September 30, 2008 and December 31, 2007.  The significant components of the deferred tax asset at September 30, 2008 and December 31, 2007 were as follows (in thousands):

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At September 30, 2008 and December 31, 2007, we had net operating loss carry forwards of approximately $58.5 million and $49.9 million, respectively, which expire in the years 2022 through 2027.

NOTE 9—COMMITMENTS AND CONTINGENCIES

Mt. Hope Project

Eureka Moly currently has a 30-year renewable lease with Mount Hope Mines, Inc. (“MHMI”) for the Mt. Hope Project (as amended, the “Mt. Hope Lease”).  The Mt. Hope Lease may be terminated upon the expiration of its 30-year term, earlier at the election of Eureka Moly, or upon Eureka Moly’s material breach and failure to cure such breach.  If Eureka Moly terminates the lease, termination is effective 30 days after receipt by MHMI of written notice to terminate the Mt. Hope Lease and no further payments would be due to MHMI.  In order to maintain the lease, Eureka Moly must pay certain deferral fees and advance royalties as discussed below.

Pursuant to the terms of the Mt. Hope Lease, the underlying total royalty on production payable to MHMI, less certain deductions, is the greater of: (i) $0.25 per pound of molybdenum metal (or the equivalent of some other product) sold or deemed to be sold from the Mt. Hope Project;  (ii) 3.5% if the average gross level of products sold is equal to or lower than $12.00 per pound; (iii) 4.5% if the average gross level of products sold is higher than $12.00 per pound, but equal to or lower than $15 per pound, and (iv) 5% if the average gross level of products sold is higher than $15 per pound (the “Production Royalties”).  Additionally, Eureka Moly is obligated to pay Exxon Mineral Company a 1% net smelter royalty on all production.

The Mt. Hope Lease requires a royalty advance (the “Construction Royalty Advance”) of the greater of $2.5 million or 3% of the construction capital cost estimate upon the earlier of (i) Eureka Moly securing project financing in sufficient amounts to develop and put the Mt. Hope Project into operation at an annual production level of at least 10 million pounds or (ii) October 19, 2008.

Eureka Moly has the right to defer the Construction Royalty Advance for one or two years by payment of a deferral fee (the “Deferral Fee”) in the amount of $0.4 million on or before October 19, 2008 and October 19, 2009 in the event project financing for the project has not been secured by each of the dates.  By October 19, 2010, Eureka Moly must pay at a minimum $2.5 million of the Construction Royalty Advance with the remainder due upon securing project financing or 50% of the remainder on October 19, 2011 and the other 50% due on October 19, 2012.  On October 17, 2008 Eureka Moly paid the $0.4 million Deferral Fee of October 19, 2008 discussed above to MHMI thereby deferring the Construction Royalty Advance.

Once the Construction Royalty Advance has been paid in full, Eureka Moly is obligated to pay an advance royalty (the “Annual Advance Royalty”) each October 19 thereafter in the amount of $0.5 million per year.  The Construction Royalty Advance and the Annual Advance Royalty are collectively referred to as the “Advance Royalties”.  All Advance Royalties are credited against the Production Royalties once the mine has achieved commercial production.  The Deferral Fees are not recoverable against Production Royalties.

Eureka Moly is obligated to pay the Construction Royalty Advance each time capital is raised for the Mt. Hope Project.  Based on the current estimate of raising capital and developing and operating the mine, we believe Eureka Moly’s contractual obligations under the Mt. Hope Lease will be as shown in the following table (in thousands).  This estimate is based on our current estimates of the timing of securing project financing and construction capital

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costs.  The amounts shown are the total amounts (in thousands) remaining at September 30, 2008 under the contracts to Eureka Moly.  Through September 30, 2008, we have advanced a total of $3.3 million.

(1)          Based on our current estimates of production and molybdenum prices, after the first full year of production, Eureka Moly estimates that the Production Royalties will be in excess of the Annual Advance Royalties for the life of the project and, further, the Construction Royalty Advance will be fully recovered (credited against MHMI Production Royalties) by the end of 2012.

Deposits on property, plant and equipment

As a continuing part of the development of the Mt. Hope Project, Eureka Moly has begun to place orders for mining and milling equipment that must be built to specification and requires a long lead time for engineering and manufacturing.  Contractual commitments for long lead items require progress payments during the engineering and construction of the equipment and have cancellation penalties in the event Eureka Moly cancels the contract.

In the year ended December 31, 2007, we entered into contracts to purchase a primary crusher, a semi-autogenous mill, two ball mills and various motors for the mills.  Additionally, during the nine months ended September 30, 2008, Eureka Moly entered into contracts to purchase, among other items, two electric shovels, two multi-hearth molybdenum roasters, 16 flotation cells, three blast hole drills and 24 haul trucks.  At September 30, 2008 and December 31, 2007, $23.3 million and $0.5 million, respectively, had been paid under the contracts.  At September 30, 2008 Eureka Moly has committed to the following additional amounts under the contracts by year (in thousands).

Deposit into an escrow account for electricity transmission service

During the three months ended September 30, 2008 Eureka Moly deposited into an escrow account $12.6 million as security for an electricity transmission contract that will provide electricity transmission to the Mt. Hope Project.

References made in this Quarterly Report of Form 10-Q to “we,” “our,” “us,” or the “Company,” refer to General Moly, Inc.

The following discussion and analysis of our financial condition and results of operations constitutes management’s review of the factors that affected our financial and operating performance for the three and nine month periods ended September 30, 2008 and 2007.  This discussion should be read in conjunction with the

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financial statements and notes thereto contained elsewhere in this report and in our Annual Report on Form 10-KSB, for the year ended December 31, 2007, which was filed on March 21, 2008.

Overview

We are a development stage company and are currently proceeding with the development of the Mt. Hope Project.  We are also conducting exploration and evaluation activities on our Liberty Property.

On October 4, 2007, our Board of Directors approved the development of the Mt. Hope Project as contemplated in our Bankable Feasibility Study (the “Bankable Feasibility Study”).  The Company has completed basic engineering of the Mt. Hope Project and has updated its Bankable Feasibility Study based upon having completed 25% of the engineering.

The development of the Mt. Hope Project has an estimated total capital requirement ranging from approximately $1.1 billion to $1.2 billion comprised of initial development costs of approximately $1,040.0 million (in 2008 dollars); $65.0 million in cash bonding requirements; $26.0 million in Advance Royalty Payments; $16.0 million in pre-payments; and amounts necessary for working capital.  Depending on the ultimate capital structure to finance the project, additional costs may be necessary for financing costs.  Through September 30, 2008 Eureka Moly has placed approximately $228.5 million in equipment orders and has pre-paid $12.6 million into an escrow arrangement for electricity transmission services.  The original estimated total capital requirement was approximately $1.0 billion, comprised of initial development costs in excess of $850.0 million (in 2007 dollars); $53.0 million in cash bonding requirements; $22.0 million in Advance Royalty Payments; and amounts necessary for working capital.  The total increase in the estimated initial development costs compared with the August 2007 Bankable Feasibility Study amount was primarily a result of increases to construction labor rates, commodity prices (primarily fuel costs), indirect construction costs, increase in quantity of construction materials and Company salary and wages.

Effective as of January 1, 2008, we contributed all of our interest in the assets related to the Mt. Hope Project, including the Mt. Hope Lease, to Eureka Moly and in February 2008 (the “Closing Date”) entered into the Mt. Hope Project joint venture with POS-Minerals (the “Joint Venture”).  Under the terms of the Joint Venture, POS-Minerals owns a 20% interest in Eureka Moly, and General Moly, through a subsidiary, owns an 80% interest. While these ownership interests and/or the required contributions under the Joint Venture can change based on our failure to satisfy certain specified conditions, including the receipt of the necessary operating permits by December 31, 2009, failure to achieve production by December 31, 2011 for reasons other than force majeure, or non-payment of amounts due under the Joint Venture by either party, we expect the interests to remain as they are now through the life of the project and the contributions to be received in the amounts that follow.

Pursuant to the terms of the Joint Venture, POS-Minerals agreed to make cash contributions to the Joint Venture in the aggregate amount of $170.0 million plus their 20% share of all development costs incurred from the Closing Date through the POS-Minerals Third Contribution Date in exchange for their 20% interest, of which $50.0 million was received in February 2008, $50.0 million was received in June 2008 (the “February 2008 and the June 2008 Contributions”), and the remaining $70.0 million will be received once the Mt. Hope Project receives the necessary permits to develop and operate the project (the “POS-Minerals Third Contribution Date”).  These initial funds are available to fund the Mt. Hope Project development costs incurred subsequent to the Closing Date. Additionally, in the third quarter of 2008, we paid to POS-Minerals $3.0 million as a final purchase price adjustment based on the terms of the Joint Venture related to the difference in the budgeted versus actual expenditures of the Mt. Hope Project prior to the Closing Date.

We are required, pursuant to the terms of the Joint Venture, to advance funds required for the development of the Mt. Hope Project that exceed the February 2008 and June 2008 Contributions until the POS-Minerals Third Contribution Date at which point POS-Minerals is required to reimburse us for their 20% share of all development costs incurred from the Closing Date through the POS-Minerals Third Contribution Date.  All costs incurred after the POS-Minerals Third Contribution Date will be allocated and funded pro rata based on each party’s ownership interest.

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Additional capital will be required through the commencement of Mt. Hope processing, which is estimated to begin in late 2010.  Our ability to develop the project on time and on budget is dependent on, among other things, the permitting process and our ability to raise the necessary capital to fund the Mt. Hope Project both in sufficient amount and in a timely manner.  Additionally, if the currently estimated costs of the Mt. Hope Project are exceeded we will need to raise additional capital to fund such overruns.

We do not currently have the capital necessary to complete the Mt. Hope Project and, accordingly, plan to raise the capital on an ongoing basis when needed.  We currently estimate needing between $600-$700 million to fully finance the Mt. Hope project.  The Company is currently, and will on an ongoing basis be, pursuing the most efficient sources of funding for the project including, but not limited to, the equity markets, the bank project finance markets and the high yield capital debt markets.  The Company is also evaluating additional support from current strategic partners, the possibility of a sale of another minority interest in the Mt. Hope project to other strategic partners, debt from private investment groups as well as the continued monitoring of the capital markets as potential sources of interim project financing needs.  Recent disruptions in national and international credit markets have led to very illiquid and volatile conditions.  There is a scarcity of credit and lenders are imposing tighter lending standards and higher interest rates on loans.  Our ability to obtain the necessary funding for the Mt. Hope Project as well as the terms for such funding may be adversely affected by these disruptions in the credit markets.  The existing cash on hand at September 30, 2008 should be sufficient to fund planned operations for the Mt. Hope Project, as well as our other planned operations through the first quarter of 2009.  If we are unable to raise capital when needed, it will be necessary to develop alternative plans that could delay the development and completion of the Mt. Hope Project.  There is no assurance that we will be able to obtain the necessary financing for the Mt. Hope Project on customary or favorable terms, or at all.

We also require additional capital to continue the exploration and evaluation of the Liberty Property, as well as continue payment of ongoing general and administrative costs associated with supporting our planned operations.

Liquidity and Capital Resources

We have limited capital resources and thus have had to rely upon the sale of equity securities and the formation of a joint venture for the cash required for exploration and development purposes, for mineral property acquisitions and to fund our general and administrative costs.  As discussed above in the overview section, we will require, and continue to require additional funds on an ongoing basis until Eureka Moly has completed the development of the Mt. Hope Project and profitable operations are achieved.  Since we do not expect to generate any revenues until the Mt. Hope Project begins production, we will continue to rely on the sale of our equity and debt securities, bank financing and joint venture arrangements to raise capital.  There is no assurance that we will be able to obtain the necessary financing in the amount required at any particular time or for any period or, if available, that it can be obtained on terms acceptable to us.

 In September 2008 we appointed Barclays Capital and Credit Suisse Securities (USA) LLC as co-lead project finance arrangers to structure and arrange the financing package for the Mt. Hope Project.

Our cash balance at September 30, 2008 was $79.5 million compared to $78.4 million at December 31, 2007.  Additionally we have $41.6 million of restricted cash that represents the unspent amount of the February 2008 and June 2008 Contributions from POS-Minerals that is available for the continuing development of the Mt. Hope Project.

Total assets as at September 30, 2008 were $226.1 million compared to $110.3 million as of December 31, 2007.  These increases were due primarily to the receipt of a total of $100.0 million from POS-Minerals in the February and June 2008 Contributions, and net proceeds from exercises of warrants and options totaling $20.5 million offset by expenditures for continuing exploration and evaluation of our Liberty Property, plus expenditures for our general and administrative costs.

As discussed above, in addition to the $100.0 million we received from POS-Minerals in the February 2008 and June 2008 Contributions, we are scheduled to receive an additional $70.0 million at the time Eureka Moly receives the necessary permits to develop and operate the Mt. Hope Project (including the record of decision for the Mt. Hope Project), which is expected in the third quarter of 2009.  Additionally, we expect POS-Minerals to fund approximately $60.0 million on the POS-Minerals Third Contribution Date, which represents POS-Minerals’ share of the anticipated project costs from January 1, 2008 through the POS-Minerals Third Contribution Date.

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We believe the cash on hand at September 30, 2008 (including the cash restricted for use in the Joint Venture) will be sufficient to fund our joint venture development, exploration, evaluation and operating activities, as well as our other planned operations, through the first quarter of 2009.

Results of Operations

For the three months ended September 30, 2008 we had a net loss of $2.8 million compared with a net loss of $12.1 million in the same period for 2007.  For the nine months ended September 30, 2008 we had a net loss of $11.8 million compared with a net loss of $30.6 million in the same period for 2007.

For the three months ended September 30, 2008 and September 30, 2007, exploration and evaluation expenses were $1.1 million and $6.0 million, respectively.  For the nine months ended September 30, 2008 and September 30, 2007, exploration and evaluation expenses were $5.3 million and $16.2 million, respectively.  During the entire nine months ended September 30, 2007 both our Mt. Hope Project and our Liberty Property were in the exploration and evaluation stage.  In October 2007 the Mt. Hope Project advanced to the development stage.  For the three and nine months ended September 30, 2008 we incurred exploration and evaluation costs on the Liberty Property as we progressed to the completion of a pre-feasibility study on the Liberty Property that was completed in April 2008.

For the three months ended September 30, 2008 and September 30, 2007, general and administrative expenses were $2.2 million and $6.4 million, respectively.  For the nine months ended September 30, 2008 and September 30, 2007, general and administrative expenses were $8.1 million and $15.3 million, respectively.  During the three months ended September 30, 2008 and September 30, 2007 we incurred $0.4 million and $1.0 million, respectively and during the nine months ended September 30, 2008 and September 30, 2007 we incurred $2.0 million and $5.5 million, respectively, in non-cash equity compensation for management and directors included in the general and administrative expenses above.  The amounts in 2007 were significantly higher than in 2008 as a greater amount of equity compensation was incurred during the nine months ended September 30, 2007 as we added new management personnel and directors as part of a reorganization and expansion of the executive team compared with the same period in 2008.  The cash portion of our general and administrative expense was approximately the same in both periods.

Interest income was $0.5 million for the three months ended September 30, 2008 compared with $0.3 million for the same period in 2007 and was $1.6 million for the nine months ended September 30, 2008 compared with $0.9 million for the same period in 2007 as a result of higher cash balances in 2008 compared with the corresponding periods in 2007.

Changes in Accounting Policies

We did not change our accounting policies during the nine months ended September 30, 2008.

ITEM 3.                                                     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Commodity Price Risk

We are a development stage company in the business of the exploration, development and mining of properties primarily containing molybdenum.  As a result, upon commencement of production, which is estimated to begin at the Mt. Hope Project in late 2010, our financial performance could be materially affected by fluctuations in the market price of molybdenum and other metals we may mine.  The market prices of metals can fluctuate widely due to a number of factors.  These factors include fluctuations with respect to the rate of inflation, the exchange rates of the US dollar and other currencies, interest rates, global or regional political and economic conditions, banking environment, global and regional demand, production costs, and investor sentiment.

In order to better manage commodity price risk and to seek to reduce the negative impact of fluctuations in prices, we will seek to enter into long term supply contracts.  On December 28, 2007, we entered into a molybdenum supply agreement with ArcelorMittal that provides for ArcelorMittal to purchase 6.5 million pounds of molybdenum per year, plus or minus 10%, once the Mt. Hope Project commences commercial operations at

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minimum specified levels. The supply agreement provides for a floor price along with a discount for spot prices above the floor price and expires five years after the commencement of commercial production at the Mt. Hope Project.  Both the floor and threshold levels at which the percentage discounts change are indexed to a producer price index.

Additionally, on May 14, 2008, we entered into a molybdenum supply agreement with SeAH Besteel Corporation (“SeAH Besteel”), Korea’s largest manufacturer of specialty steels, that provides for SeAH Besteel to purchase 4.0 million pounds of molybdenum per year, plus or minus 10%, once the Mt. Hope Project commences commercial operations at minimum specified levels. Like the ArcelorMittal supply agreement, the supply agreement with SeAH Besteel provides for a floor price along with staged discounts for spot prices above the floor price and expires five years from the date of first supply under the agreement.  Both the floor and threshold levels at which the percentage discounts change are indexed to a producer price index.

On August 8, 2008, the Company entered into a molybdenum supply agreement (the “Sojitz Agreement”) with Sojitz Corporation.  The Sojitz Agreement provides for the supply of five million pounds per year of molybdenum for five years, beginning once the Mt. Hope Project reaches certain minimum commercial production levels.  One million annual pounds sold under the Sojitz Agreement will be subject to a per-pound molybdenum floor price and is offset by a flat discount to spot moly prices above the floor.  The remaining four million annual pounds sold under the Sojitz Agreement will be sold with reference to spot moly prices without regard to a floor price.

While we have not used derivative financial instruments in the past, we may elect to enter into derivative financial instruments to manage commodity price risk.  We have not entered into any market risk sensitive instruments for trading or speculative purposes and do not expect to enter into derivative or other financial instruments for trading or speculative purposes.

Interest Rate Risk

As of September 30, 2008, we had a balance of cash and cash equivalents and restricted cash of $133.6 million.  If and to the extent that these funds were invested in interest bearing instruments during the entire nine month period ended September 30, 2008, a hypothetical 1% decrease in the rate of interest earned on these funds would affect our income for the nine month period ended September 30, 2008 by approximately $1.0 million.

ITEM 4.                                                     CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this Quarterly Report on Form 10-Q.  Based on the foregoing, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of the period covered by this Quarterly Report on Form 10-Q to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

There was no change in our internal control over financial reporting that occurred during the quarter ended September 30, 2008 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1.                                                     LEGAL PROCEEDINGS

We are involved from time to time in litigation incidental to our business. We believe that the outcome of current litigation is not expected to have a material adverse effect on our results of operations or financial condition.

ITEM 1A.                                            RISK FACTORS.

Our Annual Report on Form 10-KSB for the year ended December 31, 2007, including the discussion under the heading “Risk Factors” therein, and this report describe risks that may materially and adversely affect our business, results of operations or financial condition.  The risks described in our Annual Report on Form 10-KSB and this report are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operations.

Special Note Regarding Forward-Looking Statements

Certain statements in this report may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements of our Company, the Mt. Hope Project, Liberty Property and our other projects, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  We use the words “may,” “will,” “believe,” “expect,” “anticipate,” “intend,” “future,” “plan,” “estimate,” “potential” and other similar expressions to identify forward-looking statements.  These forward-looking statements are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those in the forward looking statements. Such risks, uncertainties and assumptions are described in the “Risk Factors” section included in our Annual Report on Form 10-KSB for the year ended December 31, 2007 and this report, and include, among other things:

·                  our dependence on the success of the Mt. Hope Project;

·                  the ability to obtain all required permits and approvals for the Mt. Hope Project and the Liberty Property;

·                  issues related to the management of the Mt. Hope Project pursuant to the Mt. Hope Joint Venture;

·                  risks related to the failure of POS-Minerals to make contributions pursuant to the Mt. Hope Joint Venture;

·                  fluctuations in the market price of, and demand for, molybdenum and other metals;

·                  the estimation and realization of mineral reserves, if any;

·                  the timing of exploration, development and production activities and estimated future production, if any;

·                  estimates related to costs of production, capital, operating and exploration expenditures;

·                  requirements for additional capital and the possible sources of such capital;

·                  government regulation of mining operations, environmental conditions and risks, reclamation and rehabilitation expenses;

·                  title disputes or claims; and

·                  limitations of insurance coverage.

You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report.  These forward-looking statements are based on our current expectations and are subject to a number of risks and uncertainties, including those set forth above.  Although we believe that the expectations reflected in these forward-looking statements are reasonable, our actual results could differ materially from those expressed in these forward-looking statements, and any events anticipated in the forward-looking statements may not actually occur.  Except as required by law, we undertake no duty to update any forward-looking statements after the date of this report to conform those statements to actual results or to reflect the occurrence of unanticipated events.  We qualify all forward-looking statements contained in this report by the foregoing cautionary statements.

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ITEM 2.                                                     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.                                                     DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.                                                     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.                                                     OTHER INFORMATION

None.

ITEM 6.                                                     EXHIBITS

* Confidential treatment has been requested for certain portions of this exhibit, and such confidential portions have been separately filed with the Securities Exchange Commission.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: November 3, 2008

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