Moly Mines (ASX: MOL) will target a minimum US$25 million of equity capital in a Canadian offering via underwriters and in a private placement in Australia.
Trading resumed in Moly Mines shares.
Moly requires the US$25 million as a precondition of the company's restructuring of the US$150 million financing facility with the Trust Company of the West.
The funds will be used to to bring Spinifex Ridge iron ore project into production.
Derek Fisher managing director of Moly Mines said recently the company is in talks with small-to-medium size Chinese steel mills regarding iron ore sales from its Spinifex Ridge project in Western Australia.
Fisher said "We're in discussions with Chinese parties and things will move rapidly on that front."
He said output could rise from planned 1 mtpa to 2 Mtpa, "if we get additional capacity, possibly at Fortescue Metals Group's (ASX: FMG) port facilities at Port Hedland."
Cashflows from the iron ore project could support Moly Mines for five years, assuming a successful capital raising Derek Fisher said.
Moly's main game is still the Spinifex Ridge molybdenum project. The price of molybdenum has staged a recovery from the depths reached in 2008 of US$7.50 per pound to current US$17 per pound.