Moly Mines Limited: Iron Ore Mining Commences at Spinifex Ridge
TORONTO, ONTARIO -- (Marketwire) -- 11/24/10 -- Moly Mines Limited (TSX: MOL)(ASX: MOL) is pleased to announce that it has commenced mining iron ore at Spinifex Ridge, 50km northeast of Marble Bar in the Pilbara of Western Australia.
Mining has commenced at an annualized rate of 1 million tonnes of iron ore per annum with approximately 18,000 tonnes of ore stockpiled ready to be crushed.
Dr Derek Fisher, the CEO/Managing Director of Moly Mines commented that 'the commencement of operations at Spinifex Ridge is a wonderful achievement for our Company and I congratulate all our staff. It has been achieved within 20 months of first drilling of this iron ore occurrence. At current prices, the project will be cashflow positive immediately.'
Moly Mines expects the first shipment of iron ore fines to occur in mid December. Iron ore prices remain strong with 62% Fe CFR China prices trading above US$160/t. Moly Mines export schedule was set many months ago based on the anticipated completion of Moly Mines' ore stockpile facilities at the Utah Point export facility at Port Hedland. Those facilities are now ready to receive Spinifex Ridge ore.
Construction of the processing plant and associated infrastructure is substantially complete and plant commissioning has commenced. Commissioning has identified some rectification work required to the conveyor on the stacking system, which is not expected to affect project schedule.
Moly Mines has also commenced studies to increase the project production rates from 1 million tonnes per annum. This is expected to be achieved with limited capital as current mining and crushing operations are currently day shift only. Exploration activities are also ongoing to expand the existing iron ore resource base.
Molybdenum Project Finance
Moly Mines is negotiating a fixed price lump sum EPC contract (Engineering, Procurement and Construction) with a Chinese engineering group which will include substantial Australian engineering input and advisory services.
Negotiations for the US$500 million project finance facility for the Spinifex Ridge Molybdenum Project continue with the EPC contract being an integral aspect of this process. Hanlong Mining Investment Pty Ltd, the Company's major shareholder, remains confident that the project finance loan facility can be achieved by 31 January 2011.
Molybdenum Price and US$ Depreciation
Molybdenum price has recently been on an upward trend having risen from US$15.00/lb to US$16.50/lb. This is likely to be further impacted by reports from China that the government is planning to restrict the mining of molybdenum. This will certainly impact on supply as China in the last two years has become a net importer of molybdenum as its rapidly expanding specialty steel industry demands more of this alloying metal.
From an Australian perspective this rising metal price has recently been countered by the appreciation of the Australian currency against the US$.
Corporate
Effective 1 December 2010, Mr David Craig will step down from the role of Chairman and become Deputy Chairman. Mr Michael Braham will assume the Chairman's role from the same date.
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.
Contacts:
Moly Mines Limited
Natalie Frame
Investor Relations
1 416 777 1801
1 416 371 7541
info@molymines.com
Moly Mines Limited
Derek Fisher
Managing Director
61 8 94293300
www.molymines.com