Moly Mines cashed up at A$80 million after iron ore sale is complete
Moly Mines (TSX: MOL) says it reached an agreement today with Mineral Resources Limited to sell the company iron ore produced at Spinifex Ridge Iron Ore Mine.
After the transaction closes, the company will have A$80 million that it will put to acquiring copper and gold assets.
Regarding the type of acquisition the company would make, it will “. . . avoid high sovereign risk jurisdictions.”
Based on current estimates the purchase price will total approximately A$38 million. This price is payable in two installments, mostly by a substantial upfront payment and the remainder by a final payment once the economic life of the Spinifex Ridge Iron Ore Mine has been exhausted. The upfront payment will be payable in cash or MIN shares at MRL’s election on 12 July 2013. MRL has informed the Company that it intends to pay in cash. The final payment is subject to adjustments to reflect the quantity and qualityof iron ore mined during the term of the mine gate sale agreement.
After settlement of the Transaction, the Company will have a significant cash and liquid assets position of at least A$80 million (equivalent to approximately 21 cents per share on a fully diluted basis).
Creative Commons image by Corrie Barklimore