Reading through todays announcement again my gut feeling is this.
Hanlong are stalling and the real reason for the delay is are they going to ba able to raise the finance.
MOL must be aware of this and so is TCW, if Hanlong can be certain of finance before signing the deal. They know that they are picking up a first class molybdenum mine at a very cheap price. On the other hand MOL know that a partner with the cash to build the mine is in the best intersts of all shareholders. So its fair to say that the board have put the pressure on Hanlong and the Chinese Govt to meet all approvals within two weeks. This is of course only my speculation, but by the 15th of this month we should know if we have SAFE approval.
This still does'nt mean that Hanlong have to sign the deal and pay up. TCW have put the pressure on by saying pay us by the 24th March or incur a further US$38.5 mil in interest payments. Hanlong have until the 30th April to meet the deal deadline but it will cost them $38.5mil to delay signing the deal and paying up. If Hanlong are serious they will sign the deal in the next two weeks.
Finance for this project should be a given, first class resource and management. All approvals in place with the vast majority of the planning work already done. Perhaps Hanlong want their cake and eat it to, it will be interesting to know if I am right.
MOL Price at posting:
85.0¢ Sentiment: LT Buy Disclosure: Held
