December 20, 2007 -- Dual listed aspiring molybdenum producer Moly Mines Ltd (ASX:MOL) has entered into an alliance with the world's largest producer of molybdenum finished products, Chile's Molibdenos y Metales S.A. (Molymet).

The companies have entered into a tolling agreement for all molybdenum concentrates produced at Moly Mines' Spinifex Ridge molybdenum project in the Pilbara region of Western Australia.

The project has a 470 million tonne molybdenum and copper resource, and is expected to produce, on average, 24 million pounds (about 10,800 tonnes) per annum of molybdenum in concentrate for more than 20 years.

According to Moly Mines' definitive feasibility study, financial close for the Spinifex Ridge project is expected in the first quarter of next year, with plant start up scheduled for July 2009.

The capital cost is estimated to be $A1,071 million ($US917.79 million).

Under the tolling agreement, molybdenum concentrates from the project will be converted to technical grade molybdenum oxide, both in powder and briquettes form and ferro-molybdenum.

Both of these products are direct feed into the furnaces of the specialty steel industry.

Moly Mines chief executive and managing director Dr Derek Fisher said the Molymet alliance was a strong endorsement of Moly's development strategy, and provided a platform for growth and expansion within the molybdenum industry.

Santiago Stock Exchange-listed Molymet has processed molybdenum concentrates since 1975, treating about 35 per cent of world molybdenum consumption.

Discovered more than 35 years ago, the Spinifex Ridge area was explored by several companies through to 1991, then lay idle until Moly Mines picked it up in 2004.

Shares in Moly Mines were five cents, or 1.54 per cent, softer to $3.20 at 1233 AEDT.

Source: Asia Pulse