Molybdenum News Center

The Group Purchased Equity of the World’s Biggest Molybdenum Company in US, Becoming Its Largest Shareholder

The Package Cooperation Agreements on Investment, Financing and Product Offtake is officially signed by and between the Group and General Moly Inc. (hereinafter referred to as “GMO”) on March 5, 2010, which is a tremendous achievement newly made by the Group for its continuous expansion of overseas resources in global molybdenum field.

Under the agreements, the Group will subscribe 25% of GMO’s common stock at twice with total investment of 80 million dollars via Hanlong (USA) Mining Investment Inc. which is its subsidiary in US, to become the single largest shareholder of GMO and to arrange and guarantee the bank loans of about 665 million dollars required by development and construction of Mt Hope molybdenum. Hanlong Group also undertakes to provide bridge loan of 20 million dollars for GMO. As an important part of the cooperation, an offtake agreement was signed by and between Hanlong Group and GMO, under which Hanlong Group will own the offtake right of products equivalent to 40%-55% of its capacity, which is approximately 16 million pounds to 22 million pounds of product molybdenum concentrate every year, within the whole project operation period after completion of development and construction of GMO Mt Hope Project (mine development life of about 44 years).

The cooperation still needs the approval of meeting of stockholders of GMO, as well as examination and approval of related domestic government departments. Both parties are to conduct related application and approval work immediately.

GMO is a mining company with its headquarter located in Denver, Colorado, US, with its stock listed and traded on both American Stock Exchange and Toronto Stock Exchange.GMO holds 80% of equity of Mt Hope in Eureka County, Nevada, USA. The partner holding the other 20% is POSCO. Mt Hope is one of the known undeveloped molybdenum projects with highest grade and largest reserves in the world. Its explored proven and credible economic reserves total 1.3 billion pounds, with an average grade of 0.068%, and with a mining grade of 0.103% in the first five years. GMO also holds 100% of equity of Mt Liberty in central Nevada, USA, which has resource reserves of about 500 million pounds at present. Estimated on the basis of the current market price of molybdenum oxide of $19/lb, the NPV of GMO is about 3 billion dollars.

GMO completed the conclusive feasibility study of Mt Hope Project in August, 2007, and updated it in September, 2008. It was estimated that total budget investment is 1.144 billion dollars, annual production capacity of 40 million pounds molybdenum concentrate can be achieved after two years’ construction and production, and it will become one of the biggest mines of primary molybdenum in the world.

Besides open-pit mining, Mt Hope Project also involves beneficiation (flotation), roasting and other processes, with MoO3 as final product. The expected minable life of the mine is 32 years, and the project operation life is 44 years.

At present, most of the various certificates and licenses required for construction, mining and operation of the mine are in place, and some large equipment with long production cycles have been ordered. Once the fund required by project development is in place, development and construction can be started soon.

In November, 2007, additional 8.26 million shares were issued at 8.5 dollars per share to Arcelor Mittel, the world's largest steel company, raising a fund of about 70 million dollars. Arcelor Mittel is now the second largest shareholder of GMO.

In December, 2007, the Group set up a joint venture with POSCO. It raised a fund of 156 million dollars by transferring 20% of project equity, and POSCO undertook to provide 20% of funds required for the project and funds for future mine operation. The cooperation is equivalent to evaluation of GMO at 8.11 dollars per share.

In addition to announcing the cooperation with GMO, the Group also announced the confirmation of POSCO for maintaining 20% of equity in Mt Hope Project and its corresponding investment commitment.

This investment is another major investment of Hanlong Group in international molybdenum metal industry after the Group purchased 55.49% of shares of Moly Mines Ltd. with equity investment of 140 million dollars and shareholders’ loan of 60 million dollars, which is also so far a project portfolio of the largest investment scale of oversea resources by Chinese private enterprises. Molybdenum reserves involved in the two investments total 2.8 billion pounds, ranking top in the world’s primary molybdenum resources. After reaching the commercialized production stage, total capacity of above projects will be 60 million pounds, being 15% of the total capacity of 400 million pounds in the world. The Group is expected to become a leading enterprise in the world's molybdenum metal industry at that time.

More molybdenum product: http://www.molybdenum.com.cn
Tel: 0592-5129696 Fax：0592-5129797
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

• < Prev
• Next >