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Market: TSX / ASX
Sector: General Mining
EPIC: MOL
Latest Price: 0.17  (4.69% Ascending)
52-week High: 1.06
52-week Low: 0.16
Market Cap: 63.51M
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Moly Mines
www.molymines.com
Moly Mines Limited, through its 100% owned subsidiary Moly Metals Australia Pty Ltd, is the 100% owner of the Spinifex Ridge Molybdenum\Copper Project – the world’s most advanced new primary molybdenum development project.
Full Moly Mines profile here
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Moly Mines reports initial JORC iron ore resource at Spinifex Ridge

4th Jun 2009, 8:30 am by Andrew McCrea
Moly Mines reports initial JORC iron ore resource at Spinifex Ridge

TSX and ASX listed Moly Mines Ltd (ASX/TSX: MOL) has inked an initial JORC resource for the iron ore deposits that are on the same tenements as its molybdenum deposits at the Spinifex Ridge Project in Western Australia.

Total iron ore resource is 7.3 million tonnes at 59% Fe.  Indicated resource is 6.1 million tonnes at 59% Fe.  This resource is likely to be expanded from additional iron ore drilling.  Geological mapping has also identified further occurrences of iron on the Project tenements.

The iron ore resource has the ability to generate cash flow from iron ore production (given costs of A$40-50 per tonne) and will considerably ease project pressure due to the fall in the price of molybdenum.  It is also likely to provide Moly Mines with on-going options that cash inflows provide a project. 

Moly Mines has commenced feasibility studies to consider mining and processing options including key parameters:

- a minimum 5 year Direct Shipping Ore (DSO) operation
- production rate of at least 1 million tonnes of DSO hematite ore per annum.
- low cost capital start up of approximately $12-15 million
- open pit mining, crushing and screening process techniques
- producing lump and fines product

The project is well situated in terms of infrastructure between the site and export facilities at Port Hedland.

Internal studies have shown that first production from the iron ore project could be achieved within 3-6 months of a decison to mine - not least because permits and approvals have already been received for the Spinifex Ridge Molybdenum project.  Metallurgical test programs and mine design and optimisation studies have commenced.

Given the fall in the molybdenum price over the past year (with a small recovery to US$10.50 per pound), the company is in negotiations with its main lender Trust Company of the West (TCW) over its US$150 million facility for a restructure of the facility.  Alternatives canvassed include:

- Joint Venture of the Spinifex Ridge Molybdenum Project
- Divest assets outside of the Molybdenum Project to raise funds
- Development options for the iron ore project
- Reviewing and short-listing of a potential mining project acquisition that would generate near term cashflows

For Moly Mines shareholders, the maiden iron ore resource and future cash flows from production of the ore provides some welcome good news.  It is also likely to open up opportunities to exploit the resource or generate cash from its sale. With a nod from TCW, Moly Mines could be back in the pink before too long.

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