Many picks here off to a great start this year. Congrats !
In case people have not noticed, the molybdenum price has basically doubled in the past 8 months, and from 2019 lows of US$7.50 /lb, moly is currently trading above US$31.00/lb
lme.com
A few recent articles on the current state of the moly market. Could be supply deficits for the next decade with demand growing in environmentally friendly businesses (eg. wing turbines). Freeport-McMoRan ore at their Climax Mine in Colorado will probably be depleted in the next 3 years, Codelco in South America has seen lower moly output from their base metals mining operations. China is accumulating (some say hoarding) numerous strategic metals including moly.
argusmedia.com
mining.com
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My pick for this stock picking contest (Stuhini Exploration) is mentioned in this recent article from mining.com
mining.com
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Chinese mining major Zijin Mining closed their acquisition of the world's largest pure molybdenum deposit (Shapinggou) back in October 2022. The deal worked out to roughly US$0.16/lb or C$0.215/lb in the ground value.
nsenergybusiness.com
www1.hkexnews.hk
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For anyone interested in a moly play, have a look Stuhini Exploration (STU.v). The company also has gold and silver, zinc, nickel and copper/gold exploration properties.
Subject 60183
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Stuhini is the current operator of the Climax-type Ruby Creek pure moly deposit. 477 million lbs in a "pit constrained" measured, indicated and inferred molybdenum resource. This updated Mineral Resource Estimate was completed by Mine Development Associates in March 2022. The resource is open to depth and to the southwest. Stuhini has 38.4 million shares outstanding, with approximately 5 million warrants issued at $0.60 and $0.35. Current market cap with a $0.47 share price is only C$18 million.
The previous operator at Ruby Creek was Adanac Moly Corp, who had advanced the Ruby Creek project through to a 2007 feasibility study and made a decision to move forward on construction in 2008. Adanac secured an $800 million credit facility to build a mill and facilities. A $22 million road was completed through to the deposit prior to the 2008-09 credit crisis and collapse in the moly price, which put Adanac into creditor protection and eventual bankruptcy. Adanac had a peak market cap of roughly C$300 million when moly prices were last at these current levels in 2008.
The Ruby Creek moly deposit is road accessible with local infrastructure in place, located about 15 km from Atlin B.C. A British Columbia mine permit is still in effect for Ruby Creek. Eric Sprott has participated in all, but one, small financings over the past 4 years and is the second largest shareholder. The CEO Dave O'Brien has participated in every financing and is the third largest shareholder. Most of the money raised in each of the small financings has gone into the ground, not executives salaries, with the CEO only drawing $2000 per month in salary.
If the price paid by Zijin Mining for Shapinggou's in ground moly resource at US$0.16/lb or C$0.215/lb were applied to Ruby Creek, it would equate to the moly deposit selling for C$102.5 million. On a diluted basis with all warrants exercised, (43.5 million shares), the price tag would work out to roughly $2.40 per share for Stuhini.
GLTA ! |
