19/01/2011 - 13:22

Hanlong still committed to Moly Mines

19/01/2011 - 13:22

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The financier for Moly Mines' Spinifex Ridge molybdenum project in the Pilbara says it is still committed to the project, despite delays in securing project approval.

Hanlong still committed to Moly Mines

The financier for Moly Mines' Spinifex Ridge molybdenum project in the Pilbara says it is still committed to the project, despite delays in securing project approval.

Hanlong Group said today that finance for the $463 million loan to Moly Mines for the development of Spinifex Ridge may be delayed until after January 31, because of hiccups in gaining regulatory approval in Australia and China.

"We are in no doubt that the project funding is coming," Hanlong Mining managing director Steven Xiao said.

"The economics for this project are better now for Hanlong than when we originally invested in Moly Mines. Molybdenum prices then were US$12/lb and they are now US$17/lb."

But Moly Mines did not share this view, saying yesterday the strong Australian dollar had put the viability of the project in doubt.

Moly said its ability to complete the project's financing would "likely be dependent on an improvement in both the foreign exchange outlook and molybdenum prices above current levels".

Dr Xiao said the delays had not dimished Hanlong's commitment to develop the project as soon as possible.

"Hanlong Group is financially strong," Dr Xiao said.

"Our group assets have been accepted as security by the lending syndicate to guarantee the project finance facility.

"Senior banking executives of the lending syndicate in China have expressed their support for funding this project."

Dr Xiao said Hanlong Mining was confident that final regulatory approvals would be concluded shortly and construction of the project would follow soon after.

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