Allow me to comment. PDG did a stage 2 feasibility study years ago when Moly was much cheaper and AUA has just twinnned and increased the size of the resource.
It's not me that isn't looking to take it into production. Larry Reaugh has stated in no uncertain terms that he intends to sell this to the Chinese preferably.
Takeover candidates? China China and China and maybe others. Chinese cannot mine anything without killing half its population in the process. Chinese Moly is also inferior and unusable in most stainless steel applications without blending it with western moly.
AUA's Ruby Creek and vicinity is very profitable at much less than half the price of Moly is now.
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"The Ruby Creek Molybdenum (RCM) Porphyry deposit, located 24 km NE of Atlin, BC, was first drilled in 1969 and has since had approximately 31,959 metres (104,826 ft) of diamond drilling carried out by the original Adanac Mining and Exploration Ltd., Kerr Addison Mines Limited (“Kerr Addison”), Climax Molybdenum Corporation and Placer Development Limited (“Placer”) up to 1981.
In addition Kerr Addison completed a program of underground development of 1,116 metres (3,660 ft) entailing adit access, cross-cutting and raising six holes to produce 9,545 tonnes of ore for on-site processing on a 100 tonnes/day pilot mill. Test work in 1970 was to determine mill head recoveries which averaged 91% and were used in subsequent feasibility studies (three) carried out by Kerr Addison in 1970, Placer in 1978 and 1979. Bulk sampling & milling by Kerr Addison reported recoveries 17% to 26% higher than diamond drill hole results, reserve figures are based on diamond drill values. The 1979 study was a stage II feasibility which was put on hold pending an investigation of the uranium content within the deposit. Content of uranium was found to be less than 20% of allowable thresholds with no more impact on the environment than the surrounding plutonic rock. At the end of the study the molybdenum price had dropped considerably to the $2.00–$3.00(US) range where it remained with the exception of two or three short lived spikes until the summer of 2003. Molybdenum prices have increased from $6.00(US) to the current price of $28.75(US) over the past 12 months.
Adanac has recently completed 9,022 metres (29,592 ft) in 36 holes for a total (including drilling by predecessors) of 40,981 metres (134,418 ft) in 248 holes.
Adanac has the following advantages over the predecessor companies:
Adanac has a 100% interest in the property, whereas the original property was burdened by a 3.5% NSR to Johns Manville. Kerr Addison could only earn a 60% interest and Placer a 70% interest.
The price of molybdenum is fifteen times the price at which Kerr Addison undertook feasibility work in 1970 and 4.8 times the price when Placer undertook its feasibility studies.
Multi-billion dollar long term contracts are being entered into by Chinese corporations for the supply of iron ore which bodes well for molybdenum due to its extensive use in stainless steel and other steel products. Indications are for a long sustained demand for molybdenum ore.
Currently surplus power is available from the Yukon Grid which would require the company to install only 100 kilometres of transmission line. Yukon power was not available in the 1970's and 1980's.
Road access to Skagway, Alaska's deep water port is now available.
To date 16 of 36 holes drilled have been assayed and released. We are pleased with the results of the reported holes, as continuity and grade within the historic pit study, are comparable to past results. The historic pit study carried out by Placer resulted in an historic estimate of 151,971,000 tonnes grading .063% Mo (.105% MoS 2 ) , however, the company has not been able to obtain enough of the original data and has not done the work necessary to verify the classification of the resource or reserve, we are not treating them as a NI 43-101 defined resource or reserve verified by a QP, and the historical estimate should not be relied upon. The Company's 36 hole program was designed by AMEC PLC to enable the Company to complete a new NI43-101 resource calculation by a qualified person which the Company would be able to use in carrying out a feasibility study.
In addition, 8 drill holes of the 36 hole program were drilled outside of the pit limit and pending assay results along with three holes reported extend existing mineralization by 270 metres.
Ten months ago we initiated an in-house economic evaluation by D.W. Philip Mining Services, to consider advancing the project through feasibility. D.W. Philip's report recommended the company should advance the project at current prices of $6.00/lb for molybdenum and to date the following steps have been taken:
Adanac in late January 2004 increased its property holdings to 4,325 hectares which now cover the proposed waste dumps, tailings pond, concentrator and construction camp as proposed in the Stage II feasibility by Placer Development Limited in 1979.
Adanac appointed David Philip P, Eng. as Project Manager.
AMEC PLC was engaged for the NI 43-101 reserve report.
AMEC PLC recommended a 9,000-10,000 metre drill program of in-fill, twin holes and exploration targets.
Klohn Crippen Consultants was retained to initiate environmental and socio-economic studies for the Ruby Creek Molybdenum Project. Field work is now completed and a draft for submission to the BC Government is under review.
We completed a soils and a geochem survey resulting in a wide area of mineralization averaging 235 ppm Mo, located 1.5 kilometers east-northeast of the current Ruby Creek Molybdenum occurrence.
Aurora Geosciences Ltd. completed an Induced Polarization Survey to assist in drilling in the Adera Fault area.
Adanac appointed Robert Pinsent PhD., P. Geo, Exploration Manager. Dr. Pinsent was the manager of the exploration drill program for Placer in 1980.
Falcon Drilling Ltd. completed 36 hole drill program, 9,022 meters (29,592 ft), with 20 drill holes awaiting assay.
Underhill Geomatics Ltd. was retained for surveying previous and present drill holes to locate co-ordinates and elevations for AMEC PLC to begin its NI 43-101 reserve study.
The company's goal is to fast track a feasibility study of the RCM project in order to (if a positive feasibility study is achieved) obtain an estimated production of 10,000,000 lbs of molybdenum a year and capitalize on the strong price and demand for molybdenum in order to achieve a fast payback of investment.
The company is currently contacting interested organizations in North America and China to initiate preliminary discussions for marketing its product as well as financing on the successful completion of its NI 43-101 reserve study and feasibility work. When AMEC PLC completes the NI 43-101 reserve report, Adanac will immediately proceed with the feasibility study.
In addition, in a move designed to augment our position as a developer of molybdenum properties, we have acquired a 100% interest in a Nevada molybdenum property, known as the Nevada BC Property, located in Nye County, 12 miles southeast of Gabbs, Nevada.
The Nevada BC Property consists of 46 unpatented lode mining claims and cover a significant part of a large flat tabular molybdenum occurrence measuring approximately 1,195 meters (3,920 feet) long X 465 meters (1,525 feet) wide X 51 meters (167 feet) thick. Prior drilling (66 diamond and RC holes) by US Smelting Refining and Mining (USS RAM) encountered molybdenum, copper and silver values over the area encompassing the tabular structures. The discovery hole located in proximity to our claims averaged .30% Mo (.50% MoS2) over 24.4 meters (80 feet). Part of the tabular structure containing the discovery hole is located on the claim which is retained by a subsidiary of USS RAM. WE have initiated discussions with the owners of the one claim in order to advance the project reported to contain 131 million tons grading .12% Mo (.20% MoS2) on page 58 and 74 of the 1985 US Bureau of Mines circular 903-5, and titled Principal Deposits of Strategic and Critical Minerals of Nevada, however , we have not been able to obtain enough of the original data and have not done the work necessary to verify the classification of the resource or reserve, we are not treating them as a NI 43-101 defined resource or reserve verified by a QP, and the historical estimate should not be relied upon.
The 100% interest is subject to a 1.25% NSR – 1% (4/5 of which of which may be purchased for $2,000,000" |
