20 Oct 2009 08:56

Hanlong to acquire stake in Aussie molybdenum miner

Shanghai. October 20. INTERFAX-CHINA - Hanlong Mining Investment Pty Ltd., a subsidiary of privately-held Sichuan Province-based Hanlong Group Co. Ltd., has entered into a share subscription agreement with dual Australian Securities Exchange and Toronto Stock Exchange-listed Moly Mines Ltd., the Australian miner announced on Oct. 19.

According to the agreement, Hanlong will acquire 207.1 million shares in Moly Mines for $140 million, and provide Moly Mines with a 10-year loan of $60 million.

Hanlong has committed to arrange $500 million of debt funding by June 30, 2010 for Moly Mines' 10 million-ton Spinifex Ridge molybdenum and copper project, and in return will receive 35.5 million unlisted 3-year exercisable options. The funds will be used to repay Moly Mines' debt, and will allow the Spinifex project to commence production as early as mid 2010.

Once the transaction is completed, Hanlong will own an approximate 54 percent stake in Moly Mines.

The transaction is still subject to Moly Mines' shareholder approval, as well as a green light from the Australian Foreign Investment Review Board (FIRB) and Chinese regulatory approvals, by no later than Jan. 31, 2010.

"Hanlong's ample funds and mining experience made it stand out in the bidding process. And we are confident that the FIRB will give the go-ahead, as Hanlong is not a state-owned company and the board of Moly Mines has recommended the deal to its shareholders," a company employee surnamed Cao, with Hanlong's investment department, told Interfax.

Hanlong Group is a private investment company with businesses in industries such as mining, electricity, infrastructure, pharmaceutical, food and beverage, real estate, environmental technology, tourism, and high-tech. Its overseas projects focus on the mining sector, including several base metal mining projects in Africa and Canada.

Moly Mines is engaged in the development of base metals projects including the world-class Spinifex project, located in Western Australia. -GD