iron ore

Moly Mines studies iron-ore mine at Spinifex Ridge
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By: Liezel Hill
3rd June 2009

Updated 3 hours agoTEXT SIZE TORONTO (miningweekly.com) – TSX- and ASX-listed Moly Mines has completed a maiden resource estimate for the iron ore deposits at its Spinifex Ridge project, in Western Australia, the firm reported on Wednesday.

The iron ore project, which is located on the same property at the firm's molybdenum/copper project, contains a 6,1-million tons of indicated resources, at 58,9% iron, and 1,1-million tons in the inferred category, at 77,2% iron.

The company has now begun mining and processing feasibility studies, considering a minimum five-year direct shipping ore operation, with production rates of at least 1-million tons of direct shipping hematite ore a year.

Initial studies have demonstrated first production from the Spinifex Ridge iron ore project could be achieved within three to six months of a decision to mine, Moly said.

The iron ore development schedule will be accelerated by the permitting approvals that have already been received for the Spinifex Ridge molybdenum project, because the iron ore deposits at Spinifex Ridge are coincidently located on the mining leases that host the moly/copper resource and the site is well supported by infrastructure between the site and export facilities at Port Hedland, the company said.

According to preliminary mining and process modelling, the firm believes the start-up capital for the iron-ore project could be around A$12-million to A$15-million, using simple open pit mining, crushing and screening processing techniques to produce lump and fines product.

DEBT RESTRUCTURE

Meanwhile, Moly also said on Wednesday it is continuing negotiations with its principal lender on potentially restructuring the company's debt obligations.

A loan of $150-million plus interest matures at the end of October 31 this year, and the firm is looking at various options to improve its financial situation.

These include potential development scenarios for the iron-ore project at Spinifex Ridge, taking on a joint venture partner on the molybdenum project, divesting assets that fall outside the 10-million ton-a-year molybdenum project start-up plan, or making acquisitions that offer near-term cash flow potential.