Moly Mines Limited
TSX : MOL
ASX : MOL

Moly Mines Limited

July 13, 2007 08:15 ET

Moly Mines Reports Spinifex Ridge Feasibility Study Almost Ready

Scoping Studies Begin for 50% Bigger Mine

TORONTO, ONTARIO--(Marketwire - July 13, 2007) - Moly Mines Limited, (TSX:MOL)(ASX:MOL) is pleased to announce that the final feasibility study on its Spinifex Ridge moly-copper project in Western Australia is expected to be released shortly following a minor delay caused by continuing capital and operating cost optimization studies. Moly Mines also notes that scoping studies have begun for the possible 50% expansion of the mine from the initial base case 15 million tonnes per annum to a possible 25 million tonnes per annum.

In the end-June quarterly, filed on SEDAR (www.SEDAR.com) and on the Company website (www.molymines.com) Moly Mines reports that such an expansion "reflects the ongoing strong fundamentals" of the molybdenum market and the benefits associated with the large resource at Spinifex Ridge. "With Measured and Indicated resources of 469 million tonnes, the opportunities for expanding throughput and production are real and not constrained by land tenure, access or availability of equipment and utilities."

With end-quarter cash resources of A$28.7 million, and a further A$5 million received since then from the sale of its New South Wales gold assets, the Company has sufficient resources to move directly from completing the feasibility study into project implementation, including undertaking certain construction activities, whilst progressing the total project to financial close. The broad objective of the financing framework is to achieve a structure that brings minimum dilution for shareholders whilst maintaining a sensible risk profile for the project.

Other highlights of the quarterly include the placing of A$51 million of orders for long lead time items of equipment (mostly for crushing and grinding) with Germany's ThyssenKrupp/Polysius for delivery in early 2009. The equipment maintains the conventional plant design concepts outlined in the pre-feasibility study.

The ball mills and primary crusher selected are industry-standard and widely used, whilst identical high pressure grinding rolls (HPGR) tertiary crushers have recently been installed at the Cerro Verde copper mine in Peru and have also been selected for the Boddington gold project in Western Australia. ThyssenKrupp currently holds the largest market share for hard ore applications of HPRGs.

Perth-based Azure Capital has been appointed corporate advisors to assist the company with organizing and structuring the financing of Spinifex Ridge. Several major international and national banks have been short-listed for a competitive tender for the project finance, with a project briefing document being distributed by Azure. In addition, expressions of interest have been received from a number of the world's leading project financing institutions.

The assessment of potential aquifers in the Canning Basin of Western Australia began in April, and two full-scale production boreholes have been completed, together with a number of exploration and monitoring bores. The final results are outstanding, confirming the presence of an abundant water resource - a high-quality aquifer whose hydrological performance is two to four times that predicted.

Discussions have progressed with a number of potential power providers, with two companies short-listed. The Company's preferred option for Spinifex Ridge is for gas-fired power generation because diesel-fuelled power stations have become extremely expensive and can only be considered as short-term emergency units. The company has therefore joined the DomGas Alliance, a group of major gas users, prospective users and infrastructure investors in Western Australia, established to ensure long-term availability and competitiveness of gas to meet the requirements of local industry.

With little in the way of major new Western World supply anticipated in the near future, market observers remain optimistic on moly prices and generally expect them to remain well-supported at near current spot levels over the next 2-3 years. Both molybdenum and copper prices have remained firm, with molybdenum oxide and ferro-molybdenum prices moving to near US$34/lb and US$36/lb respectively at the end of the report period.

In June, the anticipated export restrictions on Chinese domestic moly producers were announced which suggest that exports from that country could fall by 50% to around 24,000 tonnes per year.

Moly Mines completed a private placement of Special Warrants on the Toronto Stock Exchange in April, raising C$22.5 million. During the quarter, 3 million Moly Mines options were exercised, bringing a further A$600,000 into the Company's treasury.

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