Proposed Chinese investment partner Hanlong Mining tried to buy Moly Mines on the cheap at the depths the financial downturn, Moly chief executive Dr. Derek Fisher said yesterday.
According to Fisher, the upcoming US$700 million investment between the two companies has been in the works for a while.
“This is a deal we have been working on for some time. It came and went a couple of times,” he said at a shareholder meeting.
“Hanlong went away after the share price started rising and came back at a higher price.
“That was nice because they were trying to buy the company relatively cheaply.”
March this year saw share prices in Moly Mines fell to as low as 20.5 cents before rebounding to 60 cents in June as world markets began to recover.
Under the terms of the new investment deal, Hanlong will buy a controlling stake in Moly for 74.7 cents a share and arrange debt financing for its Spinifex Ridge molybdenum project in the Pilbara.
The deal, which will ultimately see Hanlong with a stake of between 51% and 55% in Moly, remains subject to the approval of the Foreign Investment Review Board.