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					  MANAGEMENT’S DISCUSSION AND ANALYSIS OF
     FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS FOR THE THREE MONTHS
          ENDED SEPTEMBER 30, 2008



Expressed in Australian dollars unless otherwise stated
                               MOLY MINES LIMITED
    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
           OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008


The following discussion and analysis of Moly Mines Limited (“Moly Mines” or the “Company”) should be read
in conjunction with the 30 June 2008 audited financial statements and notes related thereto. This information is
presented as of November 14, 2008. The financial information contained within this document is derived from
the Company’s financial statements prepared in accordance with International Financial reporting Standards
(“IFRS”). All amounts in this discussion are expressed in Australian dollars , unless identified otherwise.

The preparation of the general purpose condensed financial statements is based on accounting policies and
practices consistent with those used in the preparation of the audited annual consolidated financial
statements for the year ended June, 30 2008.

Additional information about the Company and its business activities is available on SEDAR www.sedar.com

1   OVERVIEW SUMMARY


Moly Mines is an international mineral exploration and development company listed on the ASX and TSX
(Symbol: MOL) with a focus on base and precious metals.


2   OVERALL PERFORMANCE


Details of the company’s recent exploration and development activities and overall performance are
contained in the September 2008 quarterly report released on October 31, 2008.


The key events are summarised as:-


       Drawdown of the first US$30 million of a US$150 million debt financing facility completed in September
        2008 (with the remaining US$120 million subsequently received on 31 October 2008).

       Spinifex Ridge fully permitted for construction and mining.

       Manufacture of crushers and ball mills advanced.

       Spinifex Ridge Reserves increased by 43% to 451 million tonnes, Resource doubled to over 1 billion
        tonnes.

       500,000 project man hours completed since DFS with no OH & S incidents.

       High grade, massive hematite iron discovery close to the Spinifex Ridge molybdenum deposit.




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                               MOLY MINES LIMITED
    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
           OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008



3   CASH POSITION


At 30 September 2008 the Company had cash and cash equivalents of A$45,766,000.
The Company anticipates that the cash and cash equivalents of A$45,766,000 at September 30, 2008, plus an
additional US$120 million available under the TCW interim loan facility, will be sufficient for the Company to
continue to progress the Spinifex Ridge Project whilst maintaining existing exploration prospects and meeting
all other corporate and administrative costs. In order to allow project construction to commence the
Company is anticipating the completion of the main debt and equity financing during 2009.


4    SELECTED FINANCIAL INFORMATION


The table below sets forth selected financial data relating to the Company’s three months ended September
30, 2008 and September 30, 2007. This financial data is derived from the Company’s unaudited consolidated
financial statements, which are prepared in accordance with IFRS.


All numbers in Australian dollars unless otherwise stated



                                                             Three Months Ended

EARNINGS AND DEFICIT                                   September 2008     September 2007

                                                               A$’000              A$’000

Interest revenue                                                  555                 420

Profit on sale of assets                                             -               7,134

Corporate and administration                                      984                 457

Other expenses                                                     75                   20

Impairment of investment                                          623                    -

Fair value of options held in associate                           403                    -

Share of associate losses                                          37                    -

Finance costs                                                     605                    2

Profit (Loss)                                                  (2,172)               7,075

Profit (Loss) per share – Basic (cents)                         (2.52)               11.16

Profit (Loss) per share – Diluted (cents)                       (2.52)                9.90

Weighted average number of shares (millions)                     86.2                 63.4

Diluted weighted average number of shares                        86.2                 71.5
(millions)


There were no material related party transactions during the Three Months ended September 30, 2008.




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                                 MOLY MINES LIMITED
      MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
             OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008




5      RESULTS OF OPERATIONS


Three months ended September 30, 2008 compared to three months ended September 30, 2007.
Interest income of A$555,000 (2007: A$420,000) was earned during the three months as a result of an increase
in the level of cash balances compared to the equivalent three months in 2007.
The profit on sale of assets in 2007 of A$7,134,000 resulted from the sale of a subsidiary, Big Island Mining Pty Ltd
including its NSW gold assets to Cortona Resources Limited.
Corporate and administrative costs were higher for the three months ended September 30, 2008 at A$984,000
(2007: A$457,000) due to higher costs associated with increased staffing levels and office costs.
The impairment of investment expense of A$623,000 (2007: A$nil) and fair value movement of options held in
associate of A$403,000 (2007: A$nil) resulted from a reduction in value of investments held in Cortona
Resources Limited.


6      DISCUSSION OF CASH FLOWS


                                                             Three Months Ended

    Cash Flows from:                                 September 30,          September 30,
                                                          2008                   2007

    Operating activities                                      (844,000)             (405,000)

    Investing activities                                   (31,676,000)           (8,960,000)

    Financing activities                                    29,693,000                353,000


Cash outflow from operating activities was A$844,000 (2007: A$405,000) with the majority of expenditure for
both periods being related to corporate administration expenses.
Cash outflow from investing activities was A$31,676,000 (2007: A$8,960,000) with expenditure being mainly
related to payments for the development of the Spinifex Ridge Project including property plant & equipment
and security deposits.
Cash inflow from financing activities was A$29,693,000 (2007 cash inflow: A$353,000) mainly related to the
drawdown of the first tranche of US$30 million on the TCW loan facility, less applicable expenses. The 2007 net
inflow mainly related to the exercise of options.




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                               MOLY MINES LIMITED
    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
           OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008



7   DISCUSSION OF FINANCIAL POSITION AND LIQUIDITY


                                                                 September 30,                  June 30,
                                                                         2008                      2008
                                                                       A$’000                    A$’000

       Assets
       Cash and cash equivalents                                          45,766                  48,593
       Receivables                                                         3,561                   3,373
       Prepaid borrowing costs                                             6,331                       -
       Investment in associates                                            1,568                   2,631
       Plant and equipment                                                72,394                  43,443
       Development Expenditure                                           115,274                  91,099
       Exploration and evaluation                                            674                     640


       Total assets                                                      245,568                 189,779


       Liabilities
       Payables                                                           53,817                  32,433
       Interest bearing debt                                              36,204                     343
       Employee future benefits                                              565                     390

       Total liabilities                                                  90,586                  33,166

       Shareholder’s equity                                              154,982                 156,613

       Outstanding number of shares                                       86,192                  64,022



CASH AND CASH EQUIVALENTS

Cash and cash equivalents increased to A$45,766,000 at September 30, 2008 (June 30, 2007: A$48,593,000)
primarily due to the receipt of US$30 million of debt funding, being the first tranche of the TCW US$150 million
facility, offset by expenditure on the advancement of the Spinifex Ridge project including detailed design
work and progress payments on long lead time equipment.


NON CURRENT ASSETS – PLANT AND EQUIPMENT; DEVELOPMENT EXPENDITURE

The increase in plant and equipment at September 30, 2008 to A$72,394,000 (June 30, 2008: A$43,443,000)
was mainly related to progress payments on long lead time equipment. The increase in capitalised
development expenditure at September 30, 2008 to A$115,274,000 (June 30, 2008: A$91.099.000) resulted
costs incurred in the advancement of the Spinifex Ridge project.


PAYABLES

With the acceleration of development work in relation to the Spinifex Ridge Project during the three months
ended September 30, 2008 payables increase to A$53,817,000 (June 30, 2008: A$32,433,000) due to an
increase in creditors and accruals associated with the Spinifex Ridge Project. Current liabilities for both
periods include progress payments due on long lead time equipment.


INTEREST BEARING DEBT

As at September 30, 2008 the Moly Mines had A$36,204,000 (June 30, 2008: A$343,000) of interest bearing
liabilities which mostly related to the initial drawdown on September 26, 2008 of US$30 million under the TCW
facility less borrowing costs. Borrowing costs related to the second tranche are shown under current assets as
prepaid borrowing costs. The amount of interest bearing debt at June 30, 2008 related to plant and
equipment under finance agreements.


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                                 MOLY MINES LIMITED
      MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
             OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008




CONTRACTUAL OBLIGATIONS

Contractual obligations are as follows:-

                                                  Payments Due by Period – As at

                                                         September 30, 2008

    Contractual Obligations – A$’000           Total         Less than 1       1-5 years
                                                                year


    Interest Bearing Debt                         36,204           36,113                  91

    Operating Leases                               1,891               622           1,269

    Spinifex Ridge Project Capital
    Commitments                                  179,739          101,777           77,962

    Employee Entitlements                              565             565                  -

    Total Contractual Obligations                218,399          139,077           79,322


Moly Mines has signed major contracts for the following capital items with the following suppliers:

     With the ThyssenKrupp subsidiary, Polysius, for the supply of €47.5 million of long lead time items for the
      processing plant/concentrator, which include one Primary crusher, three High Pressure Grinding Roll
      (“HPGR”) units, and two Ball Mills.

     With the ThyssenKrupp subsidiary, Polysius, for the value of €10.3 million for a semi mobile crusher being a
      long lead item required for the start of operations.

     With Metso Minerals (Australia) Limited for the supply of the long lead time secondary crusher for the value
      of A$13 million.

     With Ausco for the supply of construction camp infrastructure for the value of A$46 million.

     With WorleyParsons for an Engineering, Procurement, and Construction Management “(EPCM”) contract
      for the construction of the Spinifex Ridge 20 million tonne per annum treatment plant and related
      infrastructure. The estimated value of the contract is A$100 million and is based on the project proceeding
      as currently planned. The EPCM contract includes an incentive based compensation scheme that will
      reward WorleyParsons for meeting key project milestones.

     With MacMahon Holdings Limited (“MacMahon’s) for a seven year mining and earthmoving contract
      valued at A$ 1.1 billion. The contract was awarded in February 2008 to ensure that the equipment
      required to develop the mine will be available in time for a 32 million tonne waste pre-strip to be
      completed prior to the commissioning of the processing facilities at Spinifex Ridge. The contract requires
      Moly Mines to advise MacMahon’s the commencement date for the beginning of the contract. The
      contract has not commenced.

On 8 October 2008, Moly Mines announced the completion of a gas supply agreement with Santos (BOL) Pty
Ltd (Santos) for the provision of gas for power generation for the Spinifex Ridge Molybdenum Project (Project).
Santos (BOL) Pty Ltd is a wholly owned subsidiary of Santos Ltd. Under the agreement Santos will supply
approximately 15 terajoules per day of gas to the Project for 6 years commencing mid 2010 at a price linked
to international traded crude oil.


The Company has the option to terminate these contracts at any time at its convenience provided that the
Company pays all costs incurred by the supplier up to the date of termination.




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                               MOLY MINES LIMITED
    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
           OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008


Moly Mines has additional minimum commitments related to mineral tenement leases of A$517,000 per
annum. Under the terms and conditions of the Moly Mine’s title to its various mining tenements, it has an
obligation to meet rentals and minimum levels of exploration expenditure per annum as gazetted by the
Department of Industry and Resources of Western Australia, as well as local Government rates and taxes.



SHAREHOLDER’S EQUITY

Shareholder’s equity decreased to A$154,982,000 as at September 30, 2008 (June 30, 2008: A$156,613,000)
mainly due to the operating loss for the period.


8   OUTLOOK


Moly Mines is progressing the Spinifex Ridge Project towards development. The Company has all major
environmental approvals in place and major engineering work has reached a stage where work can be
slowed down pending full project funding. Preliminary site based construction activities commenced during
the third three months of 2008.


9   CRITICAL ACCOUNTING ESTIMATES


The accounting policies that involve significant management judgement and estimates are discussed in this
section. For a complete list of the significant accounting policies, reference should be made to note 2 of the
June 30, 2008 audited financial statements.


10 CORPORATE RESPONSIBILITY FOR FINANCIAL REPORTS

Internal Controls

The Company’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO) are responsible for
establishing and maintaining the Company’s disclosure controls and procedures. Access to material
information with respect to the Company is facilitated by the small size of the Company’s senior management
team. The CEO and CFO, after evaluating the effectiveness of the Company’s disclosure controls and
procedures as of September 30, 2008 have concluded that the Company’s disclosure controls and
procedures were adequate and effective to ensure that material information relating to the Company and its
subsidiaries would have been known to them.
CEO and CFO Sign-offs

In accordance with the Corporations Act 2001, ASX Corporate Governance Principle 4 (Safeguard Integrity in
Financial Reporting) and Canadian Securities Law, relevant declarations, statements and certifications have
been provided by the Chief Executive Officer and the Chief Financial Officer in relation to the Company’s
September 30, 2008 Three Monthly Report.
Disclosure Controls

The Company is committed to ensuring that shareholders and the market are provided with full and timely
information and that all stakeholders have equal and timely access to material information concerning the
Company.
The Company understands and respects that timely disclosure of price sensitive information is central to the
efficient operation of the Australian Securities Exchange’s and Toronto Stock Exchange’s securities market
and has adopted underlying procedures covering public announcements, the prevention of selective or
inadvertent disclosure, conduct of investor and analysts briefings, and media communications. This policy
reflects the commitment of the Directors and management to promoting consistent disclosure practices
aimed at accurate, timely and broadly disseminated disclosure of material information to the market.




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                               MOLY MINES LIMITED
    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
           OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008




11 SUMMARY OF THREE MONTHLY RESULTS (UNAUDITED)

The table below shows selected financial data for each of the eight three month periods ended September
30, 2008. The financial data is derived from the Company’s interim unaudited financial statements, which are
prepared in accordance with IFRS.

Financial Data – Last Eight Three
Months Periods

Three Months Ended                   Sep 08    Jun 08    Mar 08     Dec 07    Sep 07     Jun 07    Mar 07     Dec 06

Interest and other income A$(‘000)      555      1,321     1,491       351      7,604       441        230        216

Income/(Loss) A$(‘000)               (2,172)     (926)    (1,522)     (362)     7,075       (88)     (331)      (107)

Income/(Loss) per share (cents)       (2.52)    (9.36)     (1.77)    (0.54)     10.86     (0.15)     (0.64)    (0.23)

Weighted average number of
                                       86.2       86.2      86.0       66.7      63.4       57.4      51.8        46.8
shares – Millions




12 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements”, which are subject to various risks and uncertainties
that could cause actual results and future events to differ materially from those expressed or implied by such
statements. Investors are cautioned that such statements are not guarantees of future performance and
results. Risks and uncertainties about the Company’s business are more fully discussed in the Company’s
disclosure documents filed from time to time with the Canadian and Australian securities authorities. Readers
are cautioned not to rely solely on the summary of such information contained in this release, but should read
the Moly Mines Limited financial statements for the three months ended September 30, 2008 and the year
ended June 30, 2008, the Moly Mines Limited final prospectus dated October 20, 2006 and related technical
reports posted on Moly Mines website (www.molymines.com) and filed on SEDAR (www.sedar.com) and any
future amendments to such reports. Readers are also directed to the cautionary notices and disclaimers
contained herein. All currency in this release is Australian dollars unless otherwise stated.


13 RISK FACTORS

The Company’s operations and results are subject to a number of different risks at any given time. These risk
factors include but are not limited to: exploration and mining involves a high degree of risk and uncertainty;
mineral resources and reserves are estimates only; there is no certainty that further exploration will result in the
upgrade of inferred mineral resources to proven and probable mineral reserves; Moly Mines may be adversely
affected by fluctuations in metal prices. Moly Mines has no history of mining operations; Moly Mines currently
depends heavily on the Spinifex Ridge Project; Moly Mines’ will require further capital from external sources to
fund its operating costs and develop Spinifex Ridge; Moly Mines ability to complete project financing through
debt and equity; Moly Mines does not insure against all risks; Moly Mines’ operations and activities are subject
to environmental risks; government regulation may adversely affect Moly Mines; Moly Mines is subject to
international operations risks; Moly Mines does not at present hedge metal or currency futures; Moly Mines’
title to its properties may be subject to challenge and the existence of possible undetected defects in respect
of which title insurance is generally not available; carrying values of Moly Mines’ assets may be adversely
affected by fluctuations in the molybdenum, copper, and gold markets and changes in operation and
production factors; Moly Mines is dependant upon key personnel. Risks specific to Australian operations
include the risk that Moly Mines ownership of mining tenements are subject to uncertainty under the Native
Title Act (Australia); and exploration and mining tenements may be subject to forfeiture. The Company’s risk
factors are discussed in detail in the Company’s prospectus dated October 20, 2006 which is available on
SEDAR (www.sedar.com) and should be reviewed in conjunction with this document.




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                              MOLY MINES LIMITED
   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
          OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008



14 OUTSTANDING SHARE DATA

The only class of securities of the Company outstanding as at November 14, 2008 is ordinary (common) shares.
As at November 14, 2008 the Company had 86,191,677 ordinary shares outstanding and 15,425,000 options to
acquire 15,425,000 shares at various option exercise prices.

Ends




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Description: Expressed in Australian dollars unless otherwise stated