Moly Mines Ltd. doesn’t expect to continue its Spinifex Ridge molybdenum and copper project in Western Australia because of low metals prices.
Weak global molybdenum prices and a strong Australian currency have rendered the project “sub-economic”, the Perth-based company said in a statement today.
“It is disappointing that the economics do not allow us to proceed with the Spinifex Ridge molybdenum/copper mine at this stage,” Chief Executive Officer Derek Fisher said in the statement.
China Development Bank Corp. agreed to provide a $454 million loan to help finance the project, Moly Mines said in June. The loan facility expires in May and Moly Mines doesn’t believe the project’s financial situation will improve before then. The companies have formed a strategic alliance under which China Development Bank may finance new Moly Mines projects.
The Chinese bank has asked Moly Mines to make a $210 million drawdown, which will be repaid within one week, reducing the facility to $244 million, according to today’s statement.
Moly fell 4.5 percent to close at C$0.32 in Toronto.