TORONTO, ONTARIO -- Moly Mines Limited (TSX:MOL)(ASX:MOL) is...

TORONTO, ONTARIO -- Moly Mines Limited (TSX:MOL)(ASX:MOL) is pleased to announce that it has today signed various project debt agreements with China Development Bank Corporation (CDB) totaling US$494 million for the construction of the Spinifex Ridge Molybdenum / Copper mine (Spinifex Ridge).

The facilities consist of a US$454 million Syndicated Facility Agreement (SFA) and a US$40 million working capital facility with CDB. Hanlong Mining Investment Pty Ltd (Hanlong) will also provide a US$6 million junior subordinated loan on terms consistent with the SFA over the coming months to fulfill Hanlong's US$500 million commitment to Moly Mines.

Moly Mines Chief Executive Officer and Managing Director Dr Derek Fisher stated "we are extremely proud to have completed these arrangements with CDB which are the culmination of outstanding but difficult work from the Moly Mines and Hanlong teams. Our partnership with CDB and Hanlong provides a major piece of non-dilutionary capital on terms that are unachievable and unavailable from western banks. It provides a foundation for substantial growth for the Company and I thank the Hanlong team for their continued support of Moly Mines and Mr Liu Han, the principal of Sichuan Hanlong Group, for his strong personal commitment to the growth of the Company".

Hanlong Managing Director Dr Steven Xiao commented: "We're extremely pleased that 12 months of continuous effort with the Moly Mines team has culminated in the execution of the finance facilities with CDB. We congratulate Moly Mines and all parties involved on achieving this critical milestone and look forward in time to the development of Spinifex Ridge. Hanlong will continue its support for Moly Mines and the team led by Derek Fisher as we jointly pursue a number of growth opportunities".

SFA Key Commercial Terms
?The SFA is a senior secured 12 year finance facility with a two year availability period for drawdown, due for repayment in full by 30 June 2023.
?Interest will be charged at 3.8% over the six month US$ LIBOR rate (currently 0.39%).
?The facility will expire if conditions precedent to drawdown are not satisfied or waived by 13 May 2012.
?Commitment fee of 1% per annum on undrawn amounts, commencing upon first utilization.
?The security package required by CDB includes: ◦Fixed and floating charges granted by Moly Mines and its subsidiaries over its respective assets;
◦A mortgage to be provided by Hanlong over its shares in Moly Mines;
◦Project and corporate guarantees provided by Moly Mines and its subsidiaries and to be provided by Sichuan Hanlong Group Co Ltd and certain of its subsidiaries;
◦Project completion undertakings and capital cost overrun support to be provided by Sichuan Hanlong Group Co Ltd; and
◦Personal guarantees to be provided by Mr Liu Han.

?A customary package of corporate and project related covenants.



Working Capital Facility Key Commercial Terms

?Available one year from the date of practical completion of the Spinifex Ridge plant and repayable within 12 months of practical completion.
?Interest will be charged at 2.9% above the six month US$ LIBOR rate.
?Commitment fee of 1% per annum on undrawn amounts, commencing upon practical completion.

Conditions to Initial Drawdown

There are a number of conditions which need to be met before Moly Mines can draw down the funds under the SFA, including verification from Moly Mines that the mine is fully funded through to positive cashflow. As the Company disclosed in January 2011, the appreciation in the Australian dollar against the US dollar is impacting on the project financial model and has lowered forecast returns.

Total capital and owners costs, based on the EPC contract awarded in May 2011, are estimated at US$720 million, excluding working capital and debt service during construction. The total financing facilities of US$500 million, existing cash on hand and forecast net iron ore revenues will contribute to the total funding required however, there will be additional funds required to ensure the project is fully funded.

The Company and Hanlong are in discussions on how additional funds may be secured and a final investment decision leading to construction at Spinifex Ridge awaits the outcome of these discussions.

Advisors

Moly Mines is being advised by Azure Capital as corporate and financial advisor and Freehills as legal advisor. Norton Rose Hong Kong and Perth act as CDB's legal advisors. Bank of China in Australia has been appointed facility agent and security trustee under the SFA.

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