Moly Mines closes sale of NSW gold assets to Cortona
Moly Mines Ltd (C:MOL)
Shares Issued 62,321,677
Last Close 7/4/2007 $4.03
Thursday July 05 2007 - News Release
Dr. Derek Fisher reports
MOLY MINES BANKS A$5 MILLION AND BECOMES MAJOR SHAREHOLDER IN CORTONA
Moly Mines Ltd. has settled the sale of its NSW gold assets and as a result becomes a 19-per-cent shareholder in Australian Stock Exchange-listed gold explorer Cortona Resources Ltd.
On settlement, Moly Mines received:
$5-million (Australian) cash; and
12 million fully paid ordinary shares in Cortona.
Moly Mines entered a binding term sheet with Cortona in February of this year. The deemed consideration was calculated at 20 Australian cents per Cortona share. Cortona's closing price today on the Australian Stock Exchange was 38 Australian cents per share, a 190-per-cent increase since completing the term sheet.
Moly Mines managing director Dr. Derek Fisher said: "The sale of the gold assets has unlocked substantial value for Moly Mines shareholders. Sitting within Moly Mines Ltd., these gold assets had been significantly overshadowed by the Spinifex Ridge molybdenum/copper project."
On a fully diluted basis, Moly Mines owns 27.8 per cent of Cortona, although the company would be subject to the Corporations Act (2001) takeover provisions in reaching these levels.
Dr. Fisher has been appointed to the board of Cortona as a non-executive director.
In addition to the cash and shares received at settlement, Moly Mines also received:
Eight million options in Cortona exercisable at 35 cents, expiring two years from the date of issue; and
A further eight million options, exercisable at 50 cents (royalty options).
The royalty options will not vest until either the successful delineation of a total of one million ounces of measured and/or indicated resource (in accordance with the requirements of the JORC code) from the New South Wales gold assets or a decision to mine is made on any of the New South Wales gold assets.
In addition to the royalty options, on achievement of either of these royalty milestones, Moly Mines will receive a further $4-million (Australian) cash payment.
Moly Mines looks forward to participating as a major shareholder in the exciting exploration and development strategies of Cortona.