30/10/2008 - 10:45

Moly starts cost cutting measures

30/10/2008 - 10:45

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Moly Mines Ltd says it will instigate a "concerted" cost reduction program across all its activities to conserve cash, as it successfully draws down the remainder of its $US150 million ($A220 million) interim facility.

Moly Mines Ltd says it will instigate a "concerted" cost reduction program across all its activities to conserve cash, as it successfully draws down the remainder of its $US150 million ($A220 million) interim facility.

The company did not detail the cost cutting measures however said it will wind down the engineering work on its $1.26 billion Spinifex Ridge molybdenum project which will not "impact on the ability of the Project to be funded".

Today the company drew down the remaining $US120 million of the interim facility, which it said will provide "financial security" for the next 12 months.

Last month the company executed the financing documentation, with Moly to issue notes with an aggregate principal value of $US150 million.

The facility is being provided by various funds associated with US form Trust Company of the West.

Moly said that if TCW were to exercise their right to roll their interim financing into a full project funding, the remaining project capital cost requirement would be $US686.6 million or $980.7 million.

The remaining capital cost funding requirement includes the cost of the site power station estimated at $US123.2 million, Moly said.

"The Company is evaluating alternatives that would lead to a power provider building, owning and operating this item of infrastructure and selling power to the project, further reducing the capital requirement to $US563.4 million," the company said.

Meanwhile funds from the interim financing package will be allocated to the project's critical path items with priority given to the core long lead equipment contracts previously awarded.

Additionally, Moly has welcomed the appointment of Andy Zhmurovsky to the board, a nominee of TCW.

 

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