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Moly Mines Limited (TSX:MOL)(ASX:MOL) is pleased to announce it has been advised by Hanlong Mining Investment Pty Ltd (“Hanlong”), that the China Development Bank (“CDB”) has approved US$500 million in project finance facilities to develop the Spinifex Ridge Molybdenum / Copper mine.
CDB have agreed to expand their commitment from the US$250 million, announced on 1st February 2011, to US$465 million and make available US$35 million in further working capital facilities to meet Hanlong’s US$500 million financing commitment to Moly Mines. A formal commitment letter is expected to be issued by CDB within the next two weeks.
Moly Mines Managing Director and CEO Dr Derek Fisher said “this seminal outcome signals a step-change in the fortunes of our Company and our shareholders. Having survived the hiatus of the GFC and the disappointments of 2008, we are now back on-track to building the world’s next large scale molybdenum/copper mine. This outcome and the quality of the proposed debt is a great credit to the efforts and persistence over the last twelve months of our major shareholder, Hanlong, and also signals the strong belief of the Chinese bank in the future strength of the world molybdenum market”.
The Hanlong / Moly Mines financing team is now focused on completing the loan documentation by the end of June. The ultimate execution of that documentation is dependent on the satisfaction of a number of conditions including the finalization of a base case financial model that supports the proposed debt facilities and finalizing all major contracts for building and operating the mine.
The Company is in advanced negotiations with an engineering consortium for the construction of the mine and associated processing plant which is designed to have name plate capacity of 10 million tonnes per annum. Once drawdown of the funds is available construction of the mine and processing facilities will take approximately 24 months.
Read the full news release here. Image from Moly Mines Limited.
