DJN: PRESS RELEASE: Moly Mines Enters Strategic Alliance With CDB-Update on Molybdenum / Copper Project
TORONTO, ONTARIO--(Marketwire - Dec. 28, 2011) - Moly Mines Limited
new mining projects identified and introduced by Moly Mines.
Agreement (SFA) for the Spinifex Ridge Molybdenum / Copper Project.
government approvals.
before the expiry of the SFA in May 2012. Consequently a final investment
decision is unlikely to be made within that timeframe.
supports a platform for future growth of the Company".
Reduction in size of SFA
In order to preserve the availability of capital in 2012 for drawdowns under
the favourable terms of the SFA or for applications of funds for new
projects under the MOU, CDB has asked Moly Mines to make an initial drawdown
of US$210 million under the SFA, which the Company intends to repay within
one week.
The effect of the drawdown will be to reduce the funding available under the
SFA to US$244 million. CDB will consider an application by Moly Mines to
drawdown these funds for new projects or, if amending the SFA is not
appropriate, to enter into further debt facilities as may be required to
give effect to loans for future projects.
Variation of Hanlong Subscription Agreement
The Subscription Agreement signed by Hanlong and Moly Mines in October 2009,
as previously amended, required Hanlong to procure US$500 million financing
for the Spinifex Ridge Molybdenum / Copper Project and to meet or have
waived conditions precedent to drawdown under those facilities by 31
December 2011. If Hanlong were unable to achieve this, approximately US$45
million of the US$60 million Shareholder Loan (Shareholder Loan) provided to
Moly Mines under the terms described in the Subscription Agreement would be
forgiven (Loan Forgiveness).
Hanlong has agreed that the US$210 million drawdown will not result in
Hanlong meeting their funding commitments to Moly Mines.
The non-Hanlong directors of Moly Mines have agreed, subject to shareholder
approval, to restructure the terms and extend the period in which Hanlong
has to provide Moly Mines with the benefits originally contemplated under
the Subscription Agreement. Hanlong's ability to reduce the Loan Forgiveness
has been extended until the expiry of the Shareholder Loan, namely April
2020.
On each occasion in the future that Moly Mines makes a final investment
decision for a new project that is financed with debt facilities supported
by Hanlong guarantees and security, the amount of the Loan Forgiveness will
be reduced on a pro rata basis by comparing the debt made available to the
US$500 million of financing required under the Subscription Agreement.
Interest will not be payable by Moly Mines on the Loan Forgiveness.
The extension will incentivise Hanlong to continue to provide credit support
to minimize the total funding costs of future Moly Mines mining project debt
financings. Under the SFA, Hanlong provided substantial guarantees and
security to CDB.
Hanlong's 35.5 million project finance options will expire on 31 December
2011.
This news release includes "forward-looking statements" as that term within
the meaning of securities laws of applicable jurisdictions. Forward-looking
statements involve known and unknown risks, uncertainties and other factors
that are in some cases beyond Moly Mines' control. These forward- looking
statements include, but are not limited to, all statements other than
statements of historical facts contained in this news release, including,
without limitation, those regarding Moly Mines' future expectations. Readers
can identify forward-looking statements by terminology such as "aim,"
"anticipate," "assume," "believe," "continue," "could," "estimate,"
"expect," "forecast," "intend," "may," "plan," "potential," "predict,"
"project," "risk," "should," "will" or "would" and other similar
expressions. Risks, uncertainties and other factors may cause Moly Mines'
actual results, performance, production or achievements to differ materially
from those expressed or implied by the forward-looking statements (and from
past results, performance or achievements). These factors include the
failure to complete and commission the mine facilities, processing plant and
related infrastructure in the time frame and within estimated costs
currently planned; variations in global demand and price for molybdenum and
copper; fluctuations in exchange rates between the U.S. dollar and the
Australian dollar; failure to recover the resource and reserve estimates of
the Project; the failure of Moly Mines' suppliers and service providers to
fulfill their obligations under construction, supply and tolling agreements;
unforeseen geological, physical or meteorological conditions, natural
disasters or cyclones; changes in the regulatory environment, industrial
disputes, labor shortages, political and other factors; the inability to
obtain additional financing, if required, on commercially suitable terms;
and global and regional economic conditions. Readers are cautioned not to
place undue reliance on forward-looking statements. We assume no obligation
to update such information.
FOR FURTHER INFORMATION PLEASE CONTACT:
Moly Mines Limited
Natalie Frame
Investor Relations
+1 416 777 1801 or +1 416 371 7541
or
Moly Mines Limited
Derek Fisher
Managing Director
+61 8 94293300
www.molymines.com (END) Dow Jones Newswires
December 28, 2011 08:30 ET (13:30 GMT)
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