Moly Mines announced that it has signed a Memorandum of Understanding with China Development Bank (CDB) to establish a strategic alliance for financing of new mining projects identified and introduced by Moly Mines.
Under the alliance CDB would consider providing financial support, including loans, for projects on terms with a similar commercial effect to CDB as those set out in the existing $US454 million syndicated facility agreement (SFA) for Moly Mines' massive Spinifex Ridge molybdenum-copper project in the Pilbara hinterland of Western Australia.
The company said it had formed the view that the continued weakness of global molybdenum prices and the strength of the Australian dollar have rendered Spinifex Ridge "sub-economic."
These factors would not correct themselves before expiry of the SFA in May 2012.
Moly Mines' chief executive Dr Derek Fisher said while "it is disappointing that the economics do not allow us to proceed with the Spinifex Ridge molybdenum-copper mine at this stage, the strategic alliance further cements the excellent rapport we have built with CDB and supports a platform for future growth."