The Chinese are continuing to pour money into raw materials and of particular interest is that they are doing so at the late exploration/early development stages of some prjects.

(CP) – 4 hours ago

TORONTO — China's Sichuan Hanlong Group has agreed to arrange up to US$500 million in debt funding and pay US$140-million for 54 per cent of Moly Mines Ltd. (TSX:MOL), which is developing an Australian molybdenum and copper project.

The funding will allow Moly Mines to repay all amounts it has outstanding on the Trust Company of the West's financing facility by February 2010 and will allow further development of the Spinifex project to begin in mid 2010.

"This agreement represents a wonderful opportunity for Moly Mines to clear the company's existing debt and build the Spinifex Ridge molybdenum/copper project significantly ahead of the point at which funding from the traditional debt and equity markets becomes available," said Derek Fisher, Moly Mines' chief executive officer, in a statement Monday.

Hanlong's executive team said it looked forward to working on the Spinifex project.

"This agreement represents a major step in the international expansion of Hanlong Group and Moly Mines is the ideal partner for that expansion," said Hui Xiao, Hanlong's managing director.

Once the agreement is complete, Hanlong will subscribe for 2.7 million shares in Moly Mines for US$140 million and provide a 10-year interest bearing loan of US$60 million.

As well, Hanlong will commit to procuring debt financing of US$500 million by the end of June 2010 for the Spinifex project and will receive 35.5 million unlisted three year options exercisable at C$1 per share.

Moly Mines shares closed Friday at $1.21 on the Toronto Stock Exchange.

If the agreement goes to plan, Hanlong will come out with a 54 per cent interest in Moly Mines.

The two companies also said they plan to agree for Hanlong to off-take a proportion of production from the Spinifex project, although no formal agreement has yet been reached.

Hanlong has investments in mining, electricity production, infrastructure development, pharmaceuticals, real estate, tourism and environmental technology.

The group has more than 12,000 employees and overseas interests solely in the mining sector.

The financing is expected to close around Oct. 27.

Moly mines shareholders have until the end of January 2010 to approve the transaction.

The company's shares rose 16 cents to $1.37, a gain of more than 13.2 cent, in early Monday trading on the Toronto Stock Exchange.