General Moly announced that the company has been informed by Sichuan Hanlong Group (Hanlong) that it has received formal approval from the Chinese National Development and Reform Commission (NDRC) to invest in General Moly as a component of an overall structure to fully finance General Moly's 80% owned share of the Mt Hope project.
Mr Bruce D Hansen CEO of General Moly said “The NDRC approval represents another key milestone reached in the overall finance and development plan for our world class Mt Hope molybdenum project. The NDRC approval is by far the most important Chinese approval and signifies that the transaction is in alignment with China's strategy. We anticipate the receipt of a Certificate of Overseas Investment as approval from the Ministry of Commerce and filing of that Certificate with the State Administration of Foreign Exchange to be forthcoming, within the next few days. We have agreed with Hanlong that formal approval from SAFE is not practical nor required at this time, as funds will not be required to be transferred until later in the year.”
Once completed, and following the publication of the Mt Hope project's Draft Environmental Impact Statement, the company will close on the initial 12.5% fully-diluted share sale to Hanlong for USD 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 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% on a fully diluted basis, through an additional USD 40 million equity investment, following General Moly's receipt of its Record of Decision and Hanlong's delivery of a USD 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. General Moly has already initiated discussions with several Prime Chinese Banks, including the Import Export Bank of China.
