Proactiveinvestors recommends

New Guinea Energy to gain from Talisman, Mitsubishi gas alliance in Papua New Guinea
Elementos succeeding in South American precious and base metal diversification strategy
Namibian Copper moves into the big copper leagues with Hambok acquisition

Additional Information

Market:	ASX / TSX
Sector:	General Mining
EPIC:	MOL
Latest Price:	0.32 (8.62% )
52-week High:	1.12
52-week Low:	0.29
Market Cap:	121.24M

1 year chart

1 day chart

Moly Mines Full Moly Mines profile here

Moly Mines (ASX: MOL, TSE: MOL) is a resources company focussing on the development of base metals projects including the world class Spinifex Ridge Molybdenum Project. Spinifex Ridge is the world's leading undeveloped primary molybdenum deposit.

Moly Mines' Spinifex Ridge Molybdenum project is ready for immediate construction pending the completion of financing. The Company also has an Iron Ore project which commenced production in late 2010. The project’s expected annual production rate is 800,000-1 million tonnes per annum from deposits located on the same tenements as the Spinifex Ridge Molybdenum Project.

Moly Mines puts Spinifex Ridge project on hold, signs preliminary financing deal for new projects

Tuesday, January 03, 2012 by Deborah Sterescu

Moly Mines (TSE:MOL)(ASX:MOL) announced Wednesday that it has signed a preliminary deal with China Development Bank (CDB) for a strategic alliance to finance new mining projects, while also deciding to put its Spinifex Ridge molybdenum-copper project in Australia on hold.

The memorandum of understanding agreement with CDB will see the bank consider providing financial support for projects identified by Moly Mines on similar terms as those in effect under the existing US $454 million syndicated loan deal for the Spinifex Ridge project.

However, at the same time, Moly Mines' board has decided that the Spinifex Ridge project is "sub-economic", citing the continued weakness of global molybdenum prices and the strength of the Australian dollar, factors which are not expected to correct themselves before the expiry of the syndicated facility agreement (SFA) in May 2012.

Consequently, a final investment decision is unlikely to be made within that timeframe, the company said in a statement.

CEO and managing director of Moly Mines, Dr Derek Fisher, said: "Whilst it is disappointing that the economics do not allow us to proceed with the Spinifex Ridge molybdenum/copper mine at this stage, the strategic alliance further cements the excellent rapport we have built with CDB and supports a platform for future growth of the company."

CDB's financial support for new projects is subject to due diligence, internal credit approval and government approvals.

As part of the decision for Spinifex Ridge and for the financing of new projects, CDB has asked Moly Mines to make an initial drawdown of US$210 million under the previously-agreed SFA, which the company intends to repay within one week.

The effect of the drawdown will be to reduce the funding available under the facility to US$244 million. CDB will consider an application by Moly Mines to drawdown these funds for new projects or, if amending the SFA is not appropriate, to enter into further debt facilities as may be required for future projects, the company said.

No investment advice

The Company is a publisher and is not registered with or authorised by the Financial Services Authority (FSA). You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.