Moly Mines Ltd intends to produce molybdenum from its Spinifex Ridge project by July 2009 after today revealing the results of a definitive feasibility study showing the project was economically viable despite its capital cost jumping to $1.07 billion.
Once completed, Moly Mines said the project would produce about 5 per cent of the world's molybdenum and would also be one of the world's top five producers.
In its preliminary feasibility study released about two years ago Moly Mines anticipated the cost of the project would be $622 million.
However, it has since increased production capacity by about 33 per cent from 15 million tonnes per annum to 20 mtpa..
Moly Mines general manager Collis Thorp said that increasing the capacity required additional plant facilities.
He added that labour and equipment costs had also increased since its earlier project cost estimate.
Moly Mines is working with Azure Capital to source its project funding requirements, which it expects to secure by March 31.
Mr Thorp said the explorer was considering potential joint venture partners.
But he was tight-lipped about naming potential investors, many of whom have already had site visits to its operations in the Pilbara.
He said the investors could potentially come from Europe or South East Asia and there had been "no shortage of people showing interest".
Moly Mines is also expecting the results of a Public Environmental Review being assessed by the Environmental Protection Authority in the next fortnight.
Moly Mines' definitive feasibility study was based on a molybdenum price of $US13.80, or about half of the current price.
Mr Thorp said the project had a net present value of $855 million, but based on today's molybdenum prices its value soared to $3.5bn.
Moly Mines chief executive officer Derek Fisher has headed to Toronto to brief investors but said in a statement that the company was "delighted with the outcome of the DFS particularly given the challenging development environment within the resources industry".
