Due to the high Australian dollar and low molybdenum prices, Moly Mines says the Spinifex Ridge molybdenum/copper project is sub-economic and the company won’t be developing it.
In the same news it released on Wednesday, the company added that it had formed a strategic alliance with the China Development Bank Corporation that will help finance new mining projects.
“. . . 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,” said Dr Derek Fisher, CEO / Managing Director of Moly Mines in a statement.
On the TSX Moly Mines stock was trading at 33.5 cents today, just three cents above its 52-week low.
Spinifex Ridge Molybdenum project is located in Western Australia, about 170 km east of Port Hedland.
Once operating the company estimated the Spinifex Ridge mine would produce 11 million lbs of molybdenum in concentrate and 13.5 million lbs of copper in concentrate per annum for the first 10 years. To date about A$120 million of long lead items of plant have been constructed and delivered to Perth.
Moly Mines’ corporate office is located in Canada.
2 Comments
Dan Oancea
Moly’s not for the faint of heart. When moly prices go up China steps in and re-opens its high cost mines and brings a surplus of metal on the market, therefore the price would go south. Shaky economy and depressed metal prices are not good for molybdenum mines developers – unfortunately for Spinifex Ridge copper credits are not that important so the price of moly dictates the economics of the deposit. Sit on the deposit and wait is all they can do for the moment (next 1-2 years, at least).
Golddigger
This was always a long shot of a project: the grades too low, Cu is not a credit at the reported grades, it is a contaminant, and the pre-strip and strip ratio were always too high, so no surprises here other than it took them so long admit it.