Moly Mines Ltd said it is in ongoing talks with investors over financing arrangements for its $1.1 billion Spinifex Ridge molybdenum project, as it finalises a $190 million interim financing facility.
Moly Mines Ltd said it is in ongoing talks with investors over financing arrangements for its $1.1 billion Spinifex Ridge molybdenum project, as it finalises a $190 million interim financing facility.
In an announcement today, Moly said it expects to be able to drawdown on the facility next month which will provide "sufficient" working capital for the project.
"The key terms and conditions of the facility have been agreed. Confirmatory due diligence and preparation of legal documentation reflecting the term sheet, is now underway," the company said.
Last month the company announced it had mandated an unnamed US institution to complete due diligence on the $US150 million ($A190 million) financing facility.
The funds will allow Moly to start work on the project following the receipt of one final approval from the Department of Industry and Resources.
Additionally the company said it is currently in negotiations with prospective strategic investors and investment banking advisors for full funding of the project.
The company has previously said it is aiming to complete full project financing by year end, targeting two-thirds debt and one-third equity financing.
It already has locked in a 10-year off-take agreement with German steelmaker ThyssenKrupp, which has also flagged the possibility of participating in the equity financing component of the project, subject to board approval.
Moly is aiming for first production in early 2010..
Below is the full announcement:
Moly Mines Limited (ASX/TSX: MOL) advises it is finalizing an Interim Financing Facility of US$150 million and expects to be in a position to drawdown the funds during October.
The key terms and conditions of the facility have been agreed. Confirmatory due diligence and preparation of legal documentation reflecting the term sheet, is now underway.
This facility will provide sufficient working capital for the Spinifex Ridge Molybdenum Project to maintain its leading position in the world molybdenum industry as it moves towards becoming the first major new molybdenum mine in over 25 years. The Company continues to focus on full Project funding through its negotiations with prospective strategic investors and with its work with its investment banking advisors.
The Spinifex Ridge Project continues to progress with the latest approval being that of the Western Australian Department of Industry and Resources (DoIR) to the Company's detailed mining schedule and proposed processing facility. This is the last major permit/approval required for the Project and as a consequence the Company has now lodged unconditional performance bonds for its mining activities allowing site construction activities to commence.
The development of the Spinifex Ridge deposit is taking place against a background of continuing molybdenum price stability with global Mo prices remaining firm, above US$33.00/lb. This is in contrast to most of the other metals which have experienced considerable price volatility over the last 3 years. These Mo prices are driven by continuing expansion of global molybdenum consumption, by the declining exports from China as it restrains its strategic steel-related commodity exports and by the stagnation of molybdenum supply as a by-product from copper mines.
