CARLSBAD, Calif. General Moly Inc. is considering financing alternatives for its Mount Hope project after negotiations with China Development Bank (CDB) and Sichuan Hanlong (Group) Co. Ltd. over a $665-million loan were suspended following the reported detention of Sichuan Hanlong chairman Liu Han.
Liu is being detained in Beijing for undisclosed reasons while his family is said to be in police custody in Sichuan province, according to reports from Chinese and Australian news outlets.
The suspension of negotiations with CDB over the loan, earmarked for development of General Molys Mount Hope project, are related to the reports of Hans detention, as "Hanlong or an affiliate is obligated to arrange and guarantee the term loan, throughout its life," the company said March 21.
"We have been making good progress negotiating the term loan and are disappointed that this work has been suspended until further clarification is received from Hanlong. We hope to re-establish term loan negotiations with Hanlong and CDB in the near term, but will concurrently assess other financing alternatives," General Moly chief executive officer Bruce Hansen said in a statement.
Perth, Australia-based Moly Mines Ltd. also said March 20 that it was "seeking clarification" from Hanlong as to whether it would be affected by Hans detention (amm.com, March 20). Hanlong holds a 56.8-percent stake in Moly Mines.
Lakewood, Colo.-based General Moly said Feb. 19 that it was aiming to have the $665-million loan completed and approved by mid-2013 (amm.com, Feb. 19), with preliminary construction activities at Mount Hope having commenced in January (amm.com, Jan. 9).
The $1.28-billion Mount Hope project is expected to produce 40 million pounds of molybdenum annually.