Moly rally spurs Adanac

Vancouver — Adanac Moly (AUA-V) has arranged financing to explore the Ruby Creek molybdenum property, near Atlin in northwestern British Columbia.

The company, previously known as Adanac Gold, initially announced a $1.2-million short-form offering (SFO), through Canaccord Capital (CCI-T), for up to 2.4 million units priced at 50 apiece. A unit consists of a share and a non-transferable warrant, which can be exercised to buy an additional share at 55.

Subsequent to the SFO, Adanac arranged a $750,000 non-brokered private placement, which almost immediately increased to $1.1 million as a result of oversubscription. The financing consists of 2.3 million units priced at 50 apiece. A unit comprises one share and a non-transferable warrant exercisable at 60 for one year.

AMEC is overseeing an ongoing prefeasibility study, the first phase of which is aimed at redefining the historical resource of 152 million tonnes grading 0.063% molybdenum. That estimate was provided by Placer Development, a predecessor to Placer Dome (PDG-T), and is based on a cutoff grade of 0.04% moly and a stripping ratio of 1.43:1.

Placer and other past operators have subjected Ruby Creek to a total of 32,000 metres of drilling (212 holes) since 1969. Adanac has drilled 9,000 additional metres (36 holes) since acquiring the project in 2001.

The surge in moly prices is attributed to supply shortages and soaring Chinese demand. Molybdenum is used primarily in the steel industry as a hardening alloy. Much of the world’s supply is produced as byproduct of copper production.

Adanac has 23.2 million shares outstanding and recently traded at 67.