22/01/2010 - 15:44

Moly expects final Chinese approval soon

22/01/2010 - 15:44

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The head of Moly Mines is confident of receiving the final two approvals required from the Chinese government to initiate financing and development of its Spinifex Ridge project before the end of February.

The head of Moly Mines is confident of receiving the final two approvals required from the Chinese government to initiate financing and development of its Spinifex Ridge project before the end of February.

This comes after the Perth-based molybdenum mining hopeful announced today that China's leading economic planner gave the green light to a private Chinese entity's plan to take control of the company.

The National Development Reform Commission (NDRC) approved Hanlong Mining Investment's plan to acquire greater than a 51 per cent stake in Moly Mines for $US140 million ($A155.18 million).

Moly Mines managing director, Derek Fisher said he was confident the two remaining approvals, from China's Ministry of Commerce and State Administration of Foreign Exchange (SAFE), will be granted shortly after the Chinese New Year - a week long holiday for China's population beginning on Valentine's Day, February 14.

"The NDRC approval is one of the most important," Mr Fisher told WA Business News.

"That (approval) is probably the major Chinese approval, but we still require the Ministry of Commerce and SAFE approval and these are sequential.

"Our biggest hassle is we're heading into the Chinese New Year and everyone goes away on holidays so it does get in the way.

"But I'm hoping to have the next approvals before the end of February."

Considering these final approvals are not likely to come in time for the original January 31 deadline under the investment agreement reached in October, Moly said an extension of the deadline will be sought to allow the remaining approvals to be received.

"Moly Mines will advise the market if such an extension is required and agreed," the Perth-based company said in a statement.

The deal has already been approved by Australia's Foreign Investment Review Board and Moly Mines shareholders.

Under the deal, Hanlong will provide Moly Mines with an interest bearing $US60 million ($A66.5 million) 10-year loan and arrange up to $US500 million ($A554.2 million) in finance for the development of Moly Mines' Spinifex Ridge project in the state's north west.

"Organising finance for the project, that's down to Hanlong," Mr Fisher said.

"Part of the deal is they organise half a billion dollars in finance.

"And we understand they're already in discussions with Chinese banks."

This latest approval news, the initial financing discussions already currently taking place and various other factors have left Mr Fisher feeling buoyant about the future.

"The molybdenum market is moving in the right direction and the molybdenum price has risen in the last few weeks quite nicely," Mr Fisher said.

"The Chinese economy is looking good, as of yesterday.

"So far, so good."

Shares in Moly Mines were unchanged at $1 per share.

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