TORONTO, ONTARIO--(Marketwire - June 25, 2012) - Moly Mines Limited (TSX:MOL)(ASX:MOL) is pleased to provide the following Company update.
- Resource increase to increase mine life at Spinifex Ridge Iron Ore Mine
- Corporate growth strategy update
- Board appointments
- Chief Executive Officer arrangements
Spinifex Ridge Iron Ore Mine
Mineral Resource Increase
A revised Mineral Resource estimate has been completed which, net of mining depletion, has resulted in a 27% increase in the Indicated Resource tonnes as at 31 March 2012.
The revised Indicated Mineral Resource compares to the Indicated Mineral Resource estimate compiled in March 2010 as set out below.
|Date of Estimate||JORC||Tonnes||Fe %||Al 2 0 3 %||SiO 2 %||P%|
|June 2012 (1)||Indicated||4,548||60.0||1.1||8.7||0.133|
|2010, net of mining depletion through 31 March||Indicated||3,569||58.8||1.2||9.4||0.152|
|(1) The Mineral Resource estimate was based on information and mining depletion as at 31 March 2012.|
The increase in Indicated Mineral Resource has been achieved through a combination of additional infill drilling and a review of the In Situ Bulk Density (ISBD) used in the 2010 resource estimate.
The additional infill drilling has upgraded portions of the Gallifrey, Auton and Dalek resources previously classified as Inferred to the Indicated category. A positive increase in the ISBD used in the resource model has been brought about by a review of the operations data including actual load, haul and crushing statistics from the first 12 months of operations at Spinifex Ridge.
Optimization studies based on the new resource are currently underway and a revised Ore Reserve estimate and mine plan are due for completion in July 2012. NI43-101 Technical Reports will be filed in accordance with Canadian regulatory requirements. The Company anticipates that the resource increase will extend the mine life at Spinifex Ridge into the second half of calendar year 2016, subject to port access.
The Company has recently entered into iron ore price and currency hedging arrangements with a major global financial institution and has commenced placing orders under this facility. If fully utilized the program would provide price and foreign exchange protection for approximately 50% of forecast iron ore production over an 18 month period.
The hedging facility is for up to 900,000 tonnes of iron ore with a matching foreign exchange facility of up to US$108 million. The program is designed to reduce risks associated with significant fluctuations in iron ore prices and A$:US$ foreign exchange rates. The facility expires in April 2014.
A summary of the hedge book will be provided in each quarterly report.
As outlined previously the Board's primary corporate focus is to grow the Company through merger and acquisition, recognizing the relatively short mine life at the Spinifex Ridge Iron Ore Mine and the need to replace the Spinifex Ridge Molybdenum / Copper Project, the development of which is currently on hold pending an improvement in the project's economics.
The Company is reviewing a wide variety of near term producer opportunities, focusing on those that can be financed through the Chinese commercial banking process, drawing upon the relationship with the Company's major shareholder, the Hanlong Group, and the Strategic Alliance between Moly Mines and China Development Bank.
The Board welcomes the appointment of Mr. Kang Huan Jun as a non-executive director. Mr. Kang is the executive director and the acting Chief Executive Officer of Hanlong Resources Limited and Vice President of Sichuan Hanlong Group Company Limited. Mr. Kang oversees foreign investments and operations of the Sichuan Hanlong Group and will provide strong assistance to Moly Mines as it seeks funding from Chinese financial institutions to develop projects that might arise from merger and acquisition activities.
Mr. Kang has held lecturing positions at Hebei University and gained his PhD at the China University of Social Sciences. Since leaving academia and prior to joining the Sichuan Hanlong Group, Mr. Kang held positions with the China Securities Committee, China Zhongqi Investments and was the Chief Executive Officer of Hong Kong Fengshou Investment Company.
Experienced company director Mr. Peter Mansell has been appointed an alternate director to Mr. Kang. Mr. Mansell is a director of a number of Sichuan Hanlong group companies and is currently a director of ASX listed Ampella Mining Ltd and Bullabulling Gold Ltd and a director of the responsible entity of BWP Trust and Nyrstar NV (a company listed on Euronext in Belgium).
Until he retired as partner, Mr. Mansell practiced as a corporate resources lawyer at Freehills and at various times was Managing Partner and Chairman of the National firm.
Moly Mines Chairman, Mr Michael Braham, commented "I welcome Mr. Kang and Mr. Mansell to the Board and look forward to a strong contribution by them to the Company."
Chief Executive Officer Arrangements
The Board has elected not to pursue a formal executive search for a new Chief Executive Officer for the time being. Acting Chief Executive Officer Mr Collis Thorp (FAICD) will continue to serve in this capacity.
|Spinifex Ridge Iron Ore Mine|
|Mineral Resource Estimate - 31 March 2012|
|JORC Category||Tonnes||Fe %||Al 2 0 3 %||SiO 2 %||P%||LOI%||S PPM|
"The information in this report that relates to Mineral Resources is based on information compiled by Clay Gordon, who is a Member of The Australasian Institute of Mining and Metallurgy and AIG. Mr Gordon is employed by Advance Geological Consulting Pty Ltd.
Mr Gordon has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Gordon consents to the inclusion in the report of the matters based on his information in the form and context in which it appears".
This news release includes "forward-looking statements" as that term within the meaning of securities laws of applicable jurisdictions. Forward-looking statements involve known and unknown risks, uncertainties and other factors that are in some cases beyond Moly Mines' control. These forward- looking statements include, but are not limited to, all statements other than statements of historical facts contained in this news release, including, without limitation, those regarding Moly Mines' future expectations. Readers can identify forward-looking statements by terminology such as "aim," "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "forecast," "intend," "may," "plan," "potential," "predict," "project," "risk," "should," "will" or "would" and other similar expressions. Risks, uncertainties and other factors may cause Moly Mines' actual results, performance, production or achievements to differ materially from those expressed or implied by the forward-looking statements (and from past results, performance or achievements). These factors include the failure to complete and commission the mine facilities, processing plant and related infrastructure in the time frame and within estimated costs currently planned; variations in global demand and price for molybdenum and copper; fluctuations in exchange rates between the U.S. dollar and the Australian dollar; failure to recover the resource and reserve estimates of the Project; the failure of Moly Mines' suppliers and service providers to fulfill their obligations under construction, supply and tolling agreements; unforeseen geological, physical or meteorological conditions, natural disasters or cyclones; changes in the regulatory environment, industrial disputes, labor shortages, political and other factors; the inability to obtain additional financing, if required, on commercially suitable terms; and global and regional economic conditions. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information.