Moly Mines Limited
TSX : MOL
ASX : MOL

Moly Mines Limited

November 18, 2009 09:01 ET

FIRB Approves Hanlong Investment in Moly Mines

HIGHLIGHTS

- FIRB approves Hanlong's US$200m deal to acquire majority control of Moly Mines

- Key condition of Hanlong Subscription Agreement met

- Meeting of shareholders to approve Hanlong Subscription Agreement - 16 December 2009

TORONTO, ONTARIO--(Marketwire - Nov. 18, 2009) -

NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

Moly Mines Limited (TSX:MOL)(ASX:MOL) is pleased to announce that it has received confirmation that the Australian Foreign Investment Review Board ("FIRB") has no objections to the proposed US$200 million controlling interest investment in Moly Mines by the Sichuan Hanlong Group through its Australian subsidiary, Hanlong Mining Investment Pty Ltd.

The FIRB approval is a key condition of the Hanlong transaction, which is now conditional primarily on Moly Mines shareholder approval and approval of various regulatory agencies of the People's Republic of China.

The FIRB decision clears the way for a general shareholder meeting to approve the Hanlong transaction on 16 December 2009.

Moly Mines CEO and Managing Director Dr Derek Fisher commented "this is a great outcome for our shareholders, and for Australia in general, as it is Hanlong's intention to immediately organize the financing for the development of our Spinifex Ridge molybdenum mine.

"Spinifex Ridge will be Australia's first major molybdenum mine and FIRB approval, which has been received less than a month after signing the Hanlong Agreement, is another major step toward that goal."

There remain two major conditions precedent to the completion of the Hanlong Subscription Agreement announced to the ASX on 19 October 2009:

Condition Precedent OutstandingStatus
  
Approval of the transaction by Moly Mines shareholdersMeeting will be held on 16 December 2009. Notice of Meeting and Explanatory Memorandum dated 13 November 2009 have been distributed to shareholders
  
Hanlong receiving certain regulatory approvals in the People's Republic of China by 31 January 2010Hanlong has advised Moly Mines that this
 approvals process is underway
  

Key terms of the Hanlong Subscription Agreement

Under the terms of the Subscription Agreement signed on 19 October 2009, Hanlong will:

  • Subscribe for 207.1 million shares in Moly Mines for US$140 million – being A$0.747 per share ("Share Subscription");
  • Provide Moly Mines with an interest bearing US$60 million 10-year project loan ("Hanlong Loan"); and
  • Arrange debt financing for up to US$500 million by 30 June 2010 for the Spinifex Ridge Molybdenum Project ("Project Finance Loan").Receive 35.5 million unlisted C$1.00 options (3 year maturity) that vest on Hanlong successfully organizing the Project Finance Loan

Hanlong has agreed to provide parent or related-party guarantee support for the Project Finance Loan.

Moly Mines' Perth office will remain the headquarters for the company.

Hanlong is a subsidiary of the China-based, privately-owned, Sichuan Hanlong Group Co.

Sichuan Hanlong Group is a large, privately-held Chinese company with a wide portfolio of investments including mines and mineral resources , electricity production, infrastructure development, pharmaceutical production, food and alcoholic beverages, real estate development, environmental technology, tourism development and high tech industries. The group has more than 12,000 employees worldwide and revenues in excess of RMB9.5 billion in 2008. Hanlong Group is well known for its philanthropic work in China, especially in its home province of Sichuan.

These press materials do not constitute an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that will contain detailed information about the company and management, as well as financial statements.

THESE PRESS MATERIALS ARE NOT FOR RELEASE IN THE UNITED STATES.

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.

Contact Information

  • Moly Mines Limited
    Derek Fisher
    Managing Director
    +61 8 94293300
    or
    Moly Mines Limited
    Natalie Frame
    Investor Relations Coordinator
    +1 416 777 1801
    www.molymines.com