Moly Mines in ore sales talks with China

Moly Mines Ltd is in talks with small-to-medium size Chinese steel mills regarding iron ore sales from its Spinifex Ridge project near Marble Bar in Western Australia where molybdenum remains the main prize.

"We've got a lot of interest," chief executive Derek Fisher told AAP on Tuesday.

"We've had a number of trading companies approach us and we have proposals in front of us.

"We're in discussions with Chinese parties and things will move rapidly on that front."

Moly Mines also announced on Tuesday it had secured port capacity for its planned iron ore output at the common-user Utah Point export facility being constructed at Port Hedland.

The company, which is restructuring substantial debt, on Monday revealed it sought to achieve early cashflow by mining iron ore before molybdenum at Spinifex Ridge.

Moly Mines has been allocated an initial 800,000 tonnes of capacity at Utah Point for 20 months, commencing in July next year.

Mr Fisher said port access was the only remaining major logistical barrier for the development of the iron ore project, which would be small scale, starting at one million tonnes per annum (Mtpa).

He said output could rise to 2 Mtpa "if we get additional capacity", possibly at Fortescue Metals Group Ltd's port facilities at Port Hedland.

Mr Fisher said cashflow from the iron ore project could support Moly Mines for five years,"assuming a successful capital raising which we will be launching shortly".

"The iron ore supports the company until financing for Spinifex Ridge molybdenum comes through, and that's obviously dependent on the revitalisation of the world debt markets."

Shares in Moly Mines were up two cents at $1.36 on Tuesday