Adanac aims to negotiate moly off-take agreement

Vancouver Adanac Moly (AUA-V) has authorized Traxys as its exclusive representative to arrange an off-take agreement for the advanced Ruby Creek molybdenum project near Atlin, B.C.

A feasibility study for Adanac’s Ruby Creek project is expected to be completed by the end of this year. A 20,000-tonne-per-day mining and milling operation is envisioned, capable of producing 12 million lbs. of moly per year over the next five years of a 20-year mine plan. Socio-economic and environmental studies are nearing completion and permit applications will begin in September.

Traxys is owned 50% by steel-producer Arcelor and 50% by Umicore, a value-added materials producer. An off-take agreement with Adanac would give Traxys a required source of molybdenum, while Adanac would have a guaranteed end-user for part of its production.

Traxys has until mid-December of this year to determine the feasibility of an off-take agreement with Adanac. Such agreements give potential buyers such as Traxys the ability to buy all or part of the total output of moly at pre-determined prices and conditions over a period of years. Off-take agreements also give potential producers the ability to arrange project financing.

In late June, Adanac launched a 5,000-metre drill program at Ruby Creek to upgrade existing resources. At last report, the project hosts a measured and indicated resource of 205 million tonnes grading 0.062% moly. Exploration drilling will also be carried out south and east of the existing pit, to test anomalous geochemical targets outlined by previous operators, as well by Adanac.