Moly Mines Limited
TSX : MOL
ASX : MOL

Moly Mines Limited

March 17, 2008 09:00 ET

Moly Mines Limited: Spinifex Ridge Molybdenum Project Update

TORONTO, ONTARIO--(Marketwire - March 17, 2008) -

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

Moly Mines Limited, (TSX:MOL)(ASX:MOL) reports it has been actively involved in executing key initiatives necessary for the financing, construction and operation of the Spinifex Ridge Molybdenum Project ("Project"). These workstreams have included:

- Negotiating and executing various contracts for capital and operating works;

- Progressing final permitting;

- Conducting detailed engineering and design works; and

- Corporate structuring, financial modelling and preparation of debt and equity offering documentation.

Project Contracts

The Project's construction preparation continues to proceed well with a substantial number of contracts necessary for the construction and operation of the Project being awarded, including:

- Completion of orders for long lead items of capital equipment necessary for the Project's mining and comminution circuit, including the award of the primary crusher, secondary crushers, high pressure grinding rolls and ball mills.

- Toll Treatment Agreement with Molymet signed in December 2007 for the toll roasting of 100% of the molybdenum concentrates produced at the Project.

- Award of accommodation camp construction contract in January 2008.

- Award of a A$1.1 billion mining contract to Macmahon Holdings Limited in February 2008.

A steady flow of contract awards are expected over the next several months.

Project Schedule and Financing

As previously announced, native title approvals have been received for all Project tenure on the Njamal claimant areas. Mining leases and general purpose licences required for the Project's mining areas, processing and tailings disposal facilities have been granted. However some other government processes have taken longer than allowed for in the existing Project delivery timeline and have contributed to delays in the Project financing and execution schedule.

The Company has not yet concluded energy arrangements for the Project and the schedule delay provides the opportunity to finalise these negotiations prior to the financing of the Project.

The first several months of 2008 have been marred by one of the most difficult capital markets environments for many decades. The Company has previously announced that it was targeting financial completion for the Project by the end of Quarter 1, 2008. This schedule now appears unlikely in light of the delays caused by the matters discussed above and the state of the global capital markets.

As a consequence of these matters the Board of Moly Mines advises that full Project finance may not be achieved until the second half of calendar 2008.

Resource Update

Resource diamond and RC drilling recommenced at Spinifex Ridge during December 2007. This drilling has identified substantial additional molybdenum and copper mineralization outside the limits of the current resource, including in areas that were being drilled to sterilize them for mine waste storage. A new resource study incorporating data from this drilling program is underway, It is anticipated that this will lead to a major extension in the modelled Project mine life and provide significant value enhancement to the Company.

Molybdenum Prices

Despite the unfavourable capital markets, the commodities markets remain very strong and Molybdenum oxide prices have been steadily rising over the last 12 months to approximately US$34.00/lb. Many market commentators and industry analysts believe molybdenum prices could increase further over the next 2 years as supply continues to stagnate against strong demand.

As at the end of February 2008, the Company had A$80.8 million on hand.

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 fulfil 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
    Website: www.molymines.com