23/04/2010 - 09:23

Moly up on completed China funding deal

23/04/2010 - 09:23

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Shares in Moly Mines have been lifted following the company's completion of the Chinese-backed transaction resulting in Hanlong Mining Investment becoming Moly's controlling shareholder after settling the $US200 million equity and debt funding.

Moly up on completed China funding deal

Shares in Moly Mines have been lifted following the company's completion of the Chinese-backed transaction resulting in Hanlong Mining Investment becoming Moly's controlling shareholder after settling the $US200 million equity and debt funding.

Moly Mines managing director, Dr Derek Fisher said Hanlong have demonstrated a strong commitment to the molybdenum industry and he looked forward to building an international mining house with the Chinese partner.

"This considerable investment from a highly respected substantial private Chinese group, represents a key milestone in the development of the world's next major primary molybdenum mine at Spinifex Ridge and the first new large scale molybdenum mine in over 25 years," he said in a statement.

Moly had been placed in a trading halt earlier in today in lieu of the pending announcement.

In early March Moly announced Hanlong Mining Investment had received final approval from the Chinese government for the US$200 million equity and debt investment.

At the time Moly reported banking due diligence for the US$500 million Spinifex Ridge molybdenum project finance loan facility had commenced, with members of Hanlong and a Chinese financial institution visiting the Spinifex Ridge molybdenum and iron ore projects.

Hanlong has invested US$140 million for a 55 per cent fully diluted interest in Moly Mines and in addition, Moly has fully drawn a US$60 million 10-year shareholder loan, provided by Hanlong at an interest rate of 10 per cent per annum.

Shares in Moly were up 1.5 cents, or 1.67 per cent, to 91.5 cents per share at AEST1235.

 

 

Full announcement below:

MOLY MINES WELCOMES HANLONG AS MAJOR SHAREHOLDER

- US $200 million equity and debt funding

- Spinifex Ridge molybdenum/copper and iron ore projects proceed

Moly Mines Limited (ASX/TSX: MOL) ("Moly Mines") is pleased to advise that Hanlong Mining Investment Pty Ltd (Hanlong) has today become the Company's controlling shareholder following the settlement of the US$200 million equity and debt funding (Funding) pursuant to the Subscription Agreement dated 19 October 2009.

Moly Mines' Managing Director Dr Derek Fisher stated "This considerable investment from a highly respected substantial private Chinese group, represents a key milestone in the development of the world's next major primary molybdenum mine at Spinifex Ridge and the first new large scale molybdenum mine in over 25 years. Hanlong have demonstrated a strong commitment to the molybdenum industry and together we look forward to building an international mining house."

Hanlong Managing Director, Dr Hui (Steven) Xiao stated "Hanlong is delighted to complete its investment in Moly Mines and looks forward to working with the current Moly Mines board to develop the mine at Spinifex Ridge into a world class asset. This investment enforces our substantial commitment to investment in the Australian resources sector".

Pursuant to shareholder approvals, Hanlong has invested US$140 million for a 55% fully diluted interest in Moly Mines. In addition Moly Mines has fully drawn a US$60 million 10 year shareholder loan, provided by Hanlong at an interest rate of 10% per annum.

Moly Mines has retired in full the balance outstanding on the Interim Financing Facility with Trust Company of the West ("TCW"), including the Early Repayment Fee described on 1 March 2010.

The balance of the Funding and existing Moly Mines cash will be applied to the re-start of development activities for the Spinifex Ridge Molybdenum Project, in conjunction with the start-up of mine site activities for the Spinifex Ridge Iron Ore Project.

In early May, a project finance team from Moly Mines and Hanlong will assemble in Chengdu, Sichuan, for the detailed negotiations for the US$500 million Spinifex Ridge Molybdenum Project Finance Loan Facility that is expected to be available for drawdown by 30 September 2010.

 

Board Appointments

Moly Mines is pleased to welcome three Hanlong nominees as directors to the Board of the Company.

Mr Sun Xiaodong is chairman of the board of Hanlong Group and one of China's most experienced senior executives with responsibility for a broad portfolio of companies including mining, infrastructure, LPG, pharmaceuticals and property development. He has been with Hanlong Group for over thirteen years. Mr Sun has been awarded the title of Senior Economist by the Sichuanese government and holds the position of Vice president of the Economic Association of Sichuan Province.

Mr Liu Han is the founder and CEO of Guanghan Pingyuan Development Company; the CEO of Hanlong Group; the deputy CEO of Sichuan Hongda Company (publicly listed) and the CEO of Sichuan Jinlu Company (publicly listed).

Over the past 10 years, Mr Liu Han has built the Sichuan Hanlong Group into a modern, international company with annual revenues of over USD1.5 billion, one of the twenty largest privately held companies in Sichuan Province.

In 2008, Mr Lui was named as one of the 10 most influential people on the economy of Sichuan in the past 30 years. He is well known for his philanthropic work and has been awarded national recognition for his charity endeavours including special praise following the Sichuan earthquake. He was listed as the 19th greatest philanthropist in China in 2008 and the 16th greatest in 2009.

Mr Lui is an advisor to the Sichuan Province Economic Advisory Committee and Vice Principal of the Deyang City Economic Council.

Mr Lui has appointed Mr Nelson Chen as his alternate director. Nelson is Investment Director of Hanlong (Australia) Resources Pty Ltd. Educated in both China and Australia; Nelson holds postgraduate degrees in finance and accounting and is fully bilingual. As a Chartered Accountant in Australia, Nelson spent over 11 years with PricewaterhouseCoopers Sydney office in their audit and M&A advisory practices prior to joining Hanlong Group. He brings with him extensive cross-cultural professional experience.

Nelson has served on the board of Australia China Business Council, NSW branch for over 6 years and is an alumnus of Asialink Leaders Program.

Dr Steven Xiao will hold the position of Executive Director, responsible for business development, project finance and mineral product marketing strategies of the Company.

Steven has more than 15 years of experience in finance and investment working for globally recognised investment banks and financial organizations. Skilled in capital utilization and industry integration and with extensive global M&A experience, Steven has led many significant M&A projects in the mining and resources sector in countries such as China, Australia, the United States, Canada and Mongolia. Steven also serves on the board of Golden Cross Resources Ltd in Australia.

Also joining the Board is Mr Andy Zhmurovsky, a nominee of TCW. Mr Zhmurovsky has a Bachelor of Business Administration with Honours from the University of Texas at Austin. He commenced his employment in Houston with the Energy Investment Banking Group of CIBC World Markets before joining TCW as Senior Vice President within the Energy and Infrastructure Group.

Mr David Constable has resigned from the board. Mr Constable is the Company's longest serving non-executive director having joined the Board in December 2006 soon after the Company listed on the Toronto Stock Exchange. His strong Canadian mining and markets experience have been invaluable to the Company's management and successful listing in North America. Mr Constable's resignation reflects his increasing commitments to FNX Mining. The Board of Directors, on behalf of all shareholders, express their appreciation of his efforts during his term and wish him every success.

 

 

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