Moly Mines logs 20% increase in shipments from Spinifex Ridge Iron Ore Mine

Moly Mines (TSE:MOL)(ASX:MOL) is making solid progress at the Spinifex Ridge Iron Ore Mine in Western Australia as it continues to outperform budget.

Ore tonnes shipped during the September 2011 quarter totaled 257,267 wet tonnes from the three shipments scheduled for the quarter, a 20% increase on the June 2011 quarter.

A further four shipments are scheduled for the December 2011 quarter which should result in total shipments for the calendar year in excess of 900,000 wet tonnes. The company expects the forecast production and shipping profile of the Spinifex Ridge Iron Ore Mine for the remainder of the calendar year.

With iron ore fines prices of over US$155/tonne delivered to Chinese ports and operating costs in the $55-$60/tonne range, the margins provide Moly Mines with strong cash flows.

Interestingly, Moly Mines has signalled an intention to expand its iron ore project pipeline "through near mine iron ore exploration at Spinifex Ridge and the continued assessment of acquisition opportunities."

Mining and crushing operations, which remain on single day shift, are performing above planned capacity and are delivering iron ore fines product to the company’s stockpiles, comfortably ahead of the shipping schedule.


Spinifex Ridge Molybdenum/Copper Project Financing

Meanwhile, with current low molybdenum prices and the strength of the Australian dollar against the US dollar have continued to play against an early development decision on the Molybdenum/Copper (Mo/Cu) Project.

The volatility of the world equity markets has also impacted on the company’s ability to fill the $200 to $300 million funding gap required before a final investment decision can be made.

Since signing the US$494 million debt finance facilities with China Development Bank Corporation in June 2011, the company and its major shareholder, Hanlong Mining Investment Pty Ltd, have been in discussions with various advisors and third party funding sources in an effort to close the funding shortfall.

The debt facilities with China Development Bank Corporation will expire if conditions precedent to drawdown are not satisfied or waived by 13 May 2012.

Moly Mines said it will continue to work on solutions to close the funding shortfall over the coming months whilst maintaining the Mo/Cu Project’s execution ready status.

The company is continuing to realise proceeds from the sale of equipment surplus to the 10 million tonne per annum mine development with the sale of two high pressure grinding rolls for US$17 million.

Corporate

Moly has realised $17 million from the sale of surplus equipment for the Spinifex Ridge Mo/Cu Project, which should ensure a strong working capital position for the company at the end of the 2011 calendar year.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/19549/moly-mines-logs-20-increase-in-shipments-from-spinifex-ridge-iron-ore-mine-19549.html