Mount Hope high-grade confirmed (June 29, 2007)

Five diamond drill holes to test the continuity of the high-grade core of the Mt. Hope molybdenum deposit in Eureka Cty., Nev., have confirmed grades modelled in earlier resource estimates and feasibility work by Idaho General Mines (GMO-X).

The longest and richest intersection was a 276-metre interval that averaged 0.145% molybdenum. Other intersections ranged from 194 to 253 metres with grades between 0.12% and 0.14%. All the holes were stopped about 15 metres beyond the planned 10-year pit, representing a starter pit plus one push-back.

The high-grade zone would be part of the starter pit with the intention that it provide cash flow during the first five years of production and allow early payback of capital.

Pre-feasibility studies on the Mt. Hope deposit identified a reserve of 920 million tonnes grading 0.067% molybdenum, which would be mined over 53 years. The starter pit would contain 73 million tonnes grading 0.118% molybdenum, with a stripping ratio of 3.3; life-of-mine, the pit would have a strip of 1.7.

Capital costs have been estimated at between US$600 million and US$700 million and operating costs around US$4.50 per lb. for the first ten years of operation. Preliminary cash flow calculations, based on US$15 per lb. for molybdenum oxide and a 10% discount rate, show a net present value of US$840 million and an internal rate of return around 27%.