Moly Mines Limited
TSX : MOL
ASX : MOL

Moly Mines Limited

August 31, 2009 09:00 ET

Moly Mines Restructures Debt

TORONTO, ONTARIO--(Marketwire - Aug. 31, 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 it has agreed with the Trust Company of the West ("TCW") a one month extension to the maturity for the US$150 million Interim Financing Facility to 30 November 2009 and a Term Sheet describing the basis for the restructure of the full facility.

The proposed restructure will relieve significant time and financial pressures on MOL and allows the Company to develop the Spinifex Ridge mineral deposits in an orderly fashion. The restructure of the Interim Financing Facility, (plus US$33 million of accrued interest), is subject to final agreement on documentation.

The proposed restructure provides that:

- US$140 million of notes will be extended with the coupon reduced to 15% and with varying maturities:

-- US$20 million will be due 5 years from October 31, 2009;

-- US$80 million will be due for repayment in 2 years from 31 October, 2009; and

-- US$40 million will be due for repayment 18 months from 31 October, 2009

- US$43 million of notes and accrued interest will be retired from cash sources forecast to be existing as at the date of restructure.

The Term Sheet is subject to a number of conditions, including undertaking a successful equity capital raising of a minimum of US$25 million to be used primarily for the development of the Spinifex Ridge Iron Ore Project. Any surplus funds raised above this minimum level will be used to pay down, in the first instance, the US$80 million of 2 year notes listed above; and then the US$20 million of 5 year notes listed above.

This equity capital raising is planned for September and it is intended that existing shareholders will be able to participate in this process through a share purchase plan, with details to be announced shortly.

The Noteholders are to be issued with 5,958,039 Warrants in the Company at an issue price of A$0.0001 per Warrant maturing in 10 years from the date of grant as part consideration for completing the restructure. The grant of the Warrants will be subject to shareholder approval. In the event that the Company fully repays the TCW debt facility by 30 November 2009, these additional Warrants will not be issued.

The Spinifex Ridge Molybdenum Project is fully permitted, ready for construction with over A$100 million of long lead equipment manufactured and delivered to Perth.

Following the restructure, the Company intends to:

- Bring the Spinifex Ridge Iron Ore Project into production; and

- Complete final engineering and design work for the 10Mt/a project whilst pursuing full project financing.

The Company will also continue to divest the long lead items of equipment that are surplus to a 10Mt/a Spinifex Ridge Molybdenum Project start-up (as described in the June 2009 Quarterly Activities Report), with proceeds from any divestment being applied to the repayment of the 18 month notes listed above.

The strengthening molybdenum market, reflecting continued growth from China, is expected to be further supported by demand from Western Europe and North America as these economies recover from the impacts of the global financial crisis.

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