worlds largest producer by 2013

Blog from stockhouse canada 21st March 2011

"Mines on track for worlds largest most adv new pri moly proj, production by 2013

"From www.molymines.com
Dr Derek Fisher CEO

Moly Mines (TSX: MOL), developer of the Spinifex Ridge Molybdenum/Copper Project in Western Australia, is on track to becomingthe world�s newest producer of molybdenum. While the overall progresstoward completing the financing for the mines construction has been slower than it hoped, Moly Mines Managing Director and CEO Derek Fisheris confident the company will meet its goal of starting production byearly 2013. The mines target production is 10 million tonnes per annum,which will produce on average 11 million lbs of molybdenum inconcentrate and 13.5 million lbs of copper in concentrate per annum forthe first 10 years. Dr Fisher discusses Moly Mines� first-moveradvantage.


Resource Intelligence: YourSpinifex Ridge Molybdenum project in Australia is ready for immediateconstruction pending the completion of financing, but in January yourbiggest shareholder, Chinas Hanlong Mining Investment, advised the loanfacility would not be ready when expected. Could you update us on that?

Derek Fisher: The financing fromHanlong is just taking time and its been a longer process than anyone anticipated. We are negotiating with two Chinese banks, the ChinaDevelopment Bank (CDB) and the China Export and Import Bank (EXIM) for a $468-million facility. The CDB gave us a commitment letter for their portion of the financing, 50%, while EXIM have told us we will get a commitment letter from them IN THE NEXT COUPLE OF WEEKS. Getting these commitment letters is a major step forward.

RI: So you expect the full financing document to be finalized within the next few months. When will mine construction start?

DF: At the moment we are anticipating starting construction sometime mid-year. We are already planning advanced work so that we can be in a position to move onto site as soon as drawdown is available.

RI: Does the delay in financing affect your timetable?

DF: Our engineers are giving us a 20-month construction period, which gives us first production in Q1/2013. We would have liked to have been in production a little bitearlier but were comfortable because were getting financial terms from the Chinese banks that we never would have achieved from Western banks. This style of financing isnt available in the West and the Chinesebanks are stepping up to the plate. The bank syndicate are chargingaround 4.3% interest, which is extraordinary, with a term of 12 years.With Western banks youre lucky to get 7% and usually with a term of five years. Hanlong is providing some of their assets as additional security.

RI: Youve cautioned that the strong Australian dollar would hurt this projects revenue. What do you tell investors concerned about the foreign-exchange issue?

DF: Firstly, the analysts are saying we can expect a significant increase in molybdenum prices over the next few years. Secondly, the Australian dollar is being strongly impacted by strong coal and iron-ore demand. There is a relative shortage of iron ore in the world at the moment and prices are very high but analysts are predicting that prices will come back down significantly over the next couple of years, which will see the Australian dollar coming off its highs probably in 2013. On that basis I think shareholders shouldnt look at circumstances today, they have tolook at when were in production.

RI: So youre on track towards production in early 2013. Is it important for you to beat your competitors to the market?

DF: Yes it is. The molybdenum market is not that large. Being first in terms of new projects affects the ability of other companies to finance their projects. Being first isa significant advantage. What we dont want to do is see too much production coming out because it would force molybdenum prices down. If you force the prices down, projects become un-financeable and the pricewill come back up. The banks will be looking closely at who gets away and who doesnt. If we get away first, it will be more difficult for the next guy to get away and when they do, it makes it even harder for thesubsequent companies.

RI: Are you in a more advanced stage than other moly explorers?

DF: Yes we are. The other onesout there are the old Climax mine that Freeport is redeveloping at aslow pace and the other one is Mount Hope in Nevada, owned by GeneralMoly, which is still probably nine months away from receiving environmental approval. Id say they are at least 12 months behind us.

RI: If I were an investor could you give me at least three reasons why I should take a look at Moly Mines?

DF: We are the most advanced ofthe new projects out there. We are anticipating higher molybdenum prices in 2013 and 2014 so well be able to take advantage of those prices. Wealso have an iron-ore mine, which is small but highly profitable.

RI: Is there anything else you think investors should know?

DF: We are looking at other iron-ore projects around the world. Hanlong would like to build Moly Mines into a major international mining company. They certainly have thebacking of the Chinese banks and have a $5-billion line of creditavailable to them. We�re very actively looking at other projects both inAustralia and elsewhere.

Investor Highlights:
Moly Mines has first-mover advantage among new moly developers; production by 2013
Small but profitable iron-ore mine as upside
Proven management"