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Moly Mines secures fixed price contracts for Spinifex Ridge development

May 24, 2011 9:42 AM ET
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Moly Mines (ASX: MOL, TSX: MOL) and the Chinese engineering company CACS Corporation have secured a fixed price engineering, procurement and construction (EPC) contract for the Spinifex Ridge Molybdenum / Copper Project.

GR Engineering Services will act as a sub-contractor to CACS, and will be responsible for design, construction and construction management activities under the EPC.

Derek Fisher, chief executive officer for Moly Mines, said “The partnering of a respected and highly experienced Australian engineering company with the leading Chinese engineering contractor in this fixed price arrangement is a great positive for our company and the project.

"It is a structure that we strongly believe will complete the project on time and on budget.”

CACS will be responsible for procurement activities.

Moly Mines said that the EPC contract will not commence until the company has received unconditional financing for the project and the board of the subsidiary Moly Metals Australia makes a final decision to proceed with the project.

The EPC lump sum contract price is estimated at US$608 million.

Moly Mines and Hanlong Mining Investment continue to finalise the structure and documentation of the US$500 million in senior secured finance and working capital facilities that have been approved by China Development Bank for the project.

The completion of the EPC contract with CACS is one of the key project documents that are required as a condition precedent to completion and first utilisation of this financing facility.

In other Moly news, the May shipment of Spinifex Ridge iron ore fines has completed loading at Utah Point.

The ship MV Hui Hong has departed Port Hedland carrying 68,804 wet metric tonnes of iron ore with an estimated value of US$10.5 million.

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