Moly Mines (MYMNF.PK) received a big boost Tuesday as Hanlong Mining Investment Pty Ltd has received final approval from the Chinese government Hanlong’s US$200 million equity and debt investment in Moly Mines.
Chief Executive Officer Derek Fisher said Tuesday:
The stage is now set for Hanlong to complete its strategic investment in Moly Mines and proceed with the development of the world’s first new major molybdenum mine in 25 years.
All material conditions precedent for the completion of the Hanlong Subscription Agreement have now been met by both parties.
With all government approvals in place, Moly Mines is set to issue 207.1m shares for $140m to Hanlong, and the partners can re-commence the development of the Spinifex Ridge molybdenum project in Western Australia. The privately-owned Chinese company will subsequently become Moly Mines' majority shareholder.
Moly Mines said that all material conditions for the completion of the ‘Hanlong Subscription Agreement’ have now been met by both parties. When the strategic partnership was initially conceived, the investment was considered to be the largest investment by a privately owned Chinese company into Australia.
Tuesday’s announcement marks the end of an approval process which has taken several months, since the partnership was initially agreed in October 2009.
On completion, Moly Mines will issue 207.1m new shares for $140 million and 35.5m project finance options to Hanlong. In addition to the equity investment, Hanlong will also provide Moly Mines with a 10 year $60m working capital facility.
“Hanlong is confident that the Spinifex Ridge molybdenum project will advance to the next stage of development quickly”, Hanlong MD Hui Xiao said. “As the future controlling shareholder of Moly Mines, Hanlong will continue to do what it can to benefit all the shareholders of the company".
The funding package is expected to be used to repay the TCW (Trust Company of the West) Interim Financing Facility, and provide the initial funding required to re-commence the Spinifex Ridge development. Additionally following the completion of its investment, Hanlong will procure a $500m project finance facility for the full development funding required for the Spinifex project, Moly Mines said.
Moly Mines said it is confident that the project finance facility will be available for drawdown by 30 September 2010, and it is currently assisting Chinese institutions with extensive project, corporate and legal due diligence for the financing process.
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