Moly Mines Limited
TSX : MOL
ASX : MOL

Moly Mines Limited

January 10, 2008 09:14 ET

Moly Mines Limited Spinifex Ridge Molybdenum Project Update

TORONTO, ONTARIO--(Marketwire - Jan. 10, 2008) -

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

Moly Mines Limited, (TSX:MOL)(ASX:MOL) is pleased to provide the following Spinifex Ridge update, post the December holiday period.

In December the company received A$88 million in funding from the placement of 22 million shares at A$4.00 per share, highlighted by the strategic 19.9% investment in the Company by New York based Harbinger Capital Partners, a successful investor in emerging Australian resource companies. This capital injection will bridge the Spinifex Ridge Project until the main financing for the project is finalised which remains on track for completion by the end of Quarter 1, 2008. Morgan Stanley and JP Morgan are the joint lead managers and coordinators for the total project financing.

With an expected mine life of 20+ years and a mining operation expected to deliver 20 million tonnes of ore per annum to the processing plant, Spinifex Ridge will be one of the largest metals mining operations in Australia and will be the world's next major molybdenum producer, contributing on average 5% of the current world supply of molybdenum.

Project activities during the December quarter focussed on the continued acceleration of key construction, engineering and design activities for the proposed mine, processing plant, utilities and infrastructure. Substantial progress on critical path items of the comminution circuit has been made with some A$100 million in plant now under contract and a further A$47 million of construction camp infrastructure awarded.

These contracts have been awarded at costs inline with the Definitive Feasibility Study estimates, demonstrating the robust nature of the Capital Cost estimate and the equipment selection and vendor pricing information used in that study.

The Company is also pleased to confirm the Strategic Alliance with Molymet of Chile, signed in December, with the Spinifex Ridge Roasting Agreement the cornerstone of that relationship. That Agreement provides certainty of treatment for the Spinifex Ridge molybdenum concentrates for a period of at least 5 years, with options for extensions. This guarantees processing capacity for the mine's molybdenum concentrates in an industry likely to experience further capacity constraints without substantial additional new roasting investment by 2011.

The Strategic Alliance will provide the framework for MOL and Molymet to combine our respective project identification, exploration, mining, processing and marketing expertise to exploit new opportunities within the molybdenum and metals industries.

The molybdenum market remains firm, driven by strong global steel demand and emerging energy sector uses whilst global supply remains tight from diminishing byproduct mine production and consistent primary output. The average price for molybdenum oxide for 2007 was US$30.32 (per Ryan's Notes monthly averages) with the current spot price reported at US$33.50/lb. Market prices are expected to remain at present levels during 2008 and 2009.



Corporate

- Cash at bank at December 31, 2007 - A$87.0 million
- Strategic Alliance and Tolling Agreement entered with Molymet, Chile -
the worlds premier processor of molybdenum concentrates
- Shares on issue - 86,021,677
- Harbinger Capital Partners - 19.9% of Moly Mines Limited

Molybdenum Market

- World moly prices have averaged over US$20/lb (nominal terms) for the
last 42 months, set against a long term average adopted in the Spinifex
Ridge Definitive Feasibility Study of US$13.80/lb


Nominal Prices Mo oxide Western Fe-Mo
US$/lb US$/kg

----------------------------------------------------
Last 42 months average 27.80 67.33
2007 Average 30.32 72.18
2006 Average 24.76 58.06
2005 Average 31.69 76.97
Source: Ryan's Notes monthly price deck


Spinifex Ridge Project

- No scope changes to date from Definitive Feasibility Study
- Construction activities
- A$146 million construction works awarded and committed to at
December 31 for the Primary Crusher, High Pressure Grinding Rolls
(HPGR), Ball Mills, Semi-Mobile Crusher and Construction Camp. All
contracts awarded within Definitive Feasibility Study cost estimates
- EPCM contract negotiation nearing completion
- Detailed engineering and design work and procurement activities
progressing with all critical path items on track with the
April 1, 2008 mobilization schedule
- Gas supply contracts and power generation contracts advancing
- Final Western Australian state government approval processes underway
with environmental, works and construction approvals scheduled for end of
quarter 1, 2008.
- Tenure
- All mining leases required for the project development granted
- General purpose lease granted over the plant site
- Easement route, infrastructure and plant license applications
progressing in line with schedule
- All key project appointments made with Moly Mines staff in excess of 50
people
- WorleyParsons engineering team ramped-up to in excess of 80 professionals
- Molymet Tolling Agreement will convert 100% of Spinifex Ridge molybdenum
concentrates to moly oxide and / or ferro-moly for direct consumption
within the world steel industry


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.

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