Colorado, US-based mining company General Moly has announced that China's Sichuan Hanlong Group (Hanlong) has received formal approval from the Chinese National Development and Reform Commission (NDRC) to invest in General Moly in order to fully finance the joint venture Mt. Hope molybdenum project of General Moly (80 percent) and South Korean steelmaker POSCO (20 percent) in Nevada, US, which is one of the largest molybdenum projects in the world.
According to a General Moly release, once completed, and following the publication of the Mt. Hope project's Draft Environmental Impact Statement (DEIS), the company will close on the initial 12.5 percent fully-diluted share sale to Hanlong for $40 million. General Moly continues to anticipate both publication of the DEIS and Hanlong's equity investment to occur prior to year end. The company will resume engineering and procurement upon receipt of these funds. The DEIS publication in the US Federal Register will begin the public review period and signifies the final stages of federal permitting.
Under the agreement with Hanlong, Hanlong will increase its interest in General Moly to 25 percent on a fully-diluted basis, through an additional $40 million equity investment, following General Moly's receipt of its Record of Decision (ROD) and Hanlong's delivery of a $665 million Hanlong-guaranteed loan to be sourced from a prime Chinese bank. General Moly currently anticipates ROD receipt by mid-2011 and anticipates loan availability and initiation of construction within three months of permit receipt.
Mt. Hope, with 589,670 mt of proven and probable reserves will produce approximately 18,144 mt of molybdenum annually over its first five years of operations and has a 44-year mine life.