Moly Metals shelves Spinifex

Finance

Publishing Date: 30 Dec 2011 2:48pm GMT
Author: Mining Journal

ASX-listed Moly Mines Ltd is to suspend work on its Spinifex Ridge molybdenum-copper project in Western Australia, citing a strong Australian dollar and weak molybdenum prices worldwide.

The company had originally entered into a US$454 million financing agreement with China Development Bank Corp (CDB) to be used for the development of the Spinifex project. The agreement was arranged through Hanlong Mining Investment Ltd, which had committed to procure a total of US$500 million in finance for the project.

Under a new agreement, Moly will draw down its CDB loan from US$454 million to US$244 million, with the remaining provision to be used in the financing of new projects. The company said that the changes do not mean that Hanlong has fulfilled its funding commitments.

Chief executive officer and managing director of Moly Mines, Dr Derek Fisher, said “While 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 the CDB, and supports a platform for future growth of the company.”