TORONTO (miningweekly.com) – The Chinese government has given critical approval for a $200-million equity and debt investment in TSX- and ASX-listed Moly Mines by Hanlong Mining Investment.

Moly announced in October it had signed a subscription agreement with Hanlong for the $200-million investment, and that Hanlong had also agreed to help arrange another $500-million in debt finance for the company's Spinifex Ridge molybdenum/copper project, in Australia.

China-based Hanlong will subscribe for 207,1-million shares in Moly Mines, at A$0,747 a share, for a total of about $140-million and will provide the company with an interest-bearing $60-million, ten-year loan.

It will also receive 35,5-million unlisted three-year options, excercisable at C$1,00 a share and, assuming the transactions are completed as envisaged, Hanlong will have a fully diluted interest of about 54% in Moly Mines.

The National Development Reform Commission (NDRC), which is China's top economic planner, has formally notified Hanlong of its permission to complete the agreement, Moly reported on Friday.

“The receipt of NDRC approval is a critical step forward to achieve all necessary People's Republic of China (PRC) regulatory approvals, which is a condition precedent to the completion of Hanlong's investment,” the company said.

The NDRC's approval will support the applications to the Ministry of Commerce and the State Administration of Foreign Exchange (SAFE), from which the two remaining approvals are expected.

These approvals are to be considered in a sequential manner with the transaction currently before the Ministry of Commerce, Moly said.

The company has been advised that this approval process may take two weeks before being handed to the SAFE.

The initial agreement with Hanlong required all the conditions to have been satisfied by January 31, or another date agreed to by the parties.

However, Moly said on Friday it is considering extending the deadline.

“With NDRC approval received, the sequential manner of the approvals process and Chinese New Year in mid-February, Moly Mines is contemplating an extension to the cut-off date to accommodate the completion of the remaining PRC approvals,” the firm said.

It will advise the market if an extension is granted.

Meanwhile, the company continues to work with Hanlong and Chinese domestic banks to secure the $500-million project finance loan for the development of Spinifex Ridge.

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