Shares in Moly Mines jumped after the company announced its majority shareholder, China's Hanlong Mining, had secured a $US500 million project financing facility from China Development Bank for the Spinifex Ridge molybdenum-copper mine.
Moly said the bank had agreed to expand its $US250 million commitment to $US465 million and make a further $US35 million available in further working capital facilities to meet Hanlong's US$500 million financing commitment to the company.
Moly Mines managing director Derek Fisher said the deal signalled a change in the fortunes of the company and its shareholders.
"Having survived the hiatus of the GFC and the disappointments of 2008, we are now back on-track to building the world's next large scale molybdenum/copper mine," he said.
The company said the Hanlong/Moly Mines financing team was now focused on completing the loan documentation by the end of June.
The finance agreement is subject to conditions including the finalisation of a base case financial model that supports the proposed debt facilities and finalising all major contracts for building and operating the mine.
"The company is in advanced negotiations with an engineering consortium for the construction of the mine and associated processing plant which is designed to have name plate capacity of 10 million tonnes per annum," Moly said.
"Once drawdown of the funds is available construction of the mine and processing facilities will take approximately 24 months."
Moly shares were up 7.5 cents, or 6.94 per cent, to $1.155 at 8.50am.
MOL Price at posting:
$1.14 Sentiment: LT Sell Disclosure: Held
