TORONTO (miningweekly.com) – TSX- and ASX-listed Moly Mines has come up with a plan to repay its existing debt and could be developing its flagship Spinifex Ridge molybdenum/copper mine, in Australia, as early as mid-2010, the firm announced on Monday.

Chinese firm Hanlong Mining Investment will provide $200-million in equity and debt funding for  Moly Mines, and has agreed to arrange another $500-million in debt finance for the Spinifex Ridge project.

Hanlong Mining Investment is a subsidiary of the privately owned Sichuan Hanlong Group.

The funding will enable Moly Mines to repay all the money owed on an interim financing facility with the Trust Company of the West.

“This agreement represents a wonderful opportunity for Moly Mines to clear the company's existing debt and build the Spinifex Ridge molybdenum/copper project significantly ahead of the point at which funding from the traditional debt and equity markets becomes available,” CEO Derek Fisher commented.

“The company could be in the envious position of having constructed the molybdenum/copper mine at the beginning of the next metals cycle, benefiting from higher metal prices in the mine's early production years," he said.

Hanlong will subscribe for 207,1-million shares in Moly Mines, at A$0,747 a share, for a total of about $140-million.

It will also provide Moly Mines with an interest-bearing $60-million, ten-year loan and will commit to procuring debt financing of $500-million by June 30, 2010, for the Spinifex Ridge project.

Hanlong will also receive 35,5-million unlisted three-year options, excercisable at C$1,00 a share.

Assuming the transactions are completed as envisaged, Hanlong will have a fully diluted interest of approximately 54% in Moly Mines.

The two companies also plan to agree on terms for Hanlong to off-take a proportion of production from the Spinifex Ridge project, although nothing has been finalised yet, the firms said.

The Spinifex Ridge project is essentially "development ready" - Moly Mines has already taken delivery of most of the long-lead time items and is working on final feasibility work and detailed engineering for the ten-million ton a year project.

The operation was previously planned at 20-million tons a year.

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