Moly Mines Limited
TSX : MOL
ASX : MOL

Moly Mines Limited

February 01, 2007 11:30 ET

Feasibility Study for Moly Mines Molybdenum Project on Schedule for Mid-Year Completion

TORONTO, ONTARIO--(CCNMatthews - Feb. 1, 2007) - Moly Mines Limited, (TSX:MOL) (ASX:MOL) is pleased to report that its full feasibility study (FFS) for its Spinifex Ridge open pit molybdenum-copper project in the Pilbara district of Western Australia remains on track for completion in June this year, with production start-up for the open pit operation targeted for late 2008. Earlier this month, the company appointed Henry Walker Eltin to provide mining consultancy services to the FFS.

In its December quarterly activities report available on the Company website and on SEDAR (www.sedar.com), Moly Mines says that world moly demand remains strong for high-quality steels, alloys and catalysts, whilst prices continue to hold firm at over US$25/lb, double that used in the pre-feasibility study (PFS). Analysts and market participants are optimistic on prices and expect them to be well supported at current spot levels for the next 2-3 years. In addition, although copper prices have fallen to around US$2.50/lb, they remain well above the US$1.10/lb used in the PFS.

Based on measured and indicated resources (to JORC and NI43-101 standard) of 469m tonnes grading 0.06% moly, 0.09% copper and 1.7g/t silver, Spinifex Ridge is increasingly being regarded as the next likely primary moly mine in the Western World to reach production, "This is generating significant interest from end-users concerned about potential long-term supply shortages caused by new Chinese export tariffs on moly products and the decreasing production from the major copper-moly by-product mines in South America", the company states.

The pilot plant metallurgical test programme on composite ore types from Spinifex Ridge was completed during December, and this allowed the company to accelerate discussions on product offtake and marketing. Preliminary results indicate that flotation will achieve recoveries of over 80% for moly and 55% for copper. Significantly, says Moly Mines, the concentrates assayed up to 50% moly and 25% copper, thus meeting those forecast in the pre-feasibility study. To date, 24kg of concentrates have been produced, a portion of which will be used in support of marketing activities. In addition, some of the moly concentrates from the pilot plant programme have been sent to various toll treatment roasters to confirm their suitability for downstream processing into moly oxide.

During the quarter and in January 2007, the company hosted a number site visits from potential cornerstone investors and product offtake partners. Marketing trips will commence in the current quarter, focusing on these same aspects as well as the agency and logistics network for moly concentrate sales into Europe and Asia. In addition, the confirmation that saleable copper concentrates can be produced from Spinifex Ridge ore will enable Moly Mines to initiate discussions for possible copper concentrate offtake opportunities.

As these negotiations progress, the focus will shift towards commencement of detailed discussions with potential financiers. The company says it has received encouraging responses from initial enquiries to its list of potential lenders, and information packages will shortly be distributed seeking expressions of interest for the leading role in financing the project.

Pilot testing has shown that high pressure grinding rolls (HPGR) can be used for tertiary crushing at Spinifex Ridge, and final laboratory testing is now being completed in Germany. This technology, used in the mining industry for over 20 years, is now accepted as the most suitable crushing method for large-scale, highthroughput operations mining hard ore, such as Spinifex Ridge. It has significant power consumption benefits over the more traditional SAG mills, the company adds.

The company's assessment of the global capacity for roasting concentrates indicates there is adequate capacity to accommodate the planned production of 9,700t/y of contained moly from Spinifex Ridge. During the current quarter, the company says it will continue discussions with the world's leading roasters with the objective of concluding a long-term toll treatment agreement. This will allow it to retain control over marketing activities whilst securing roasting services without the need for a major injection of capital.

Commenting on its other mineral interests, Moly Mines says it is currently assessing an offer for its gold assets in New South Wales where exploration during the quarter was limited to soil sampling and surveying.

TORONTO LISTING OVER-SUBSCRIBED AND RAISED A$20 MILLION

Moly Mines completed its listing on the Toronto Stock Exchange in October 2006 with an IPO of 16.5m new ordinary shares (including a 10% over-subscription) that raised A$20.1m. The company says the listing provides the opportunity for investors to assess Spinifex Ridge against existing moly producers and other potential mines that are at the feasibility or development stage. At the end of the quarter, the company had cash resources of A$17.4m.

Dr. Derek Fisher, a designated Qualified Person pursuant to NI 43-101 of the Canadian Securities Administrators, is responsible for the verification and quality assurance of the Company's exploration data and analytical results.

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