NMC doubles resource at moly mine

Vancouver – South Korea-focused NMC Resource (NRC-V) has substantially increased contained resources at its high-grade Moland molybdenum mine.

The underground mine is now estimated to contain 1.67 million indicated tonnes grading 0.35% molybdenum disulphide plus 2.09 million inferred tonnes grading 0.32% molybdenum disulphide.

The update more than doubles the previous 2009 estimate of 1.7 million inferred tonnes grading 0.36% molybdenum disulphide, despite increasing the cut-off grade from 0.1% to 0.14%.

The company added tonnes to the resource after drilling some 88 holes and incorporating deeper sections of the mine, while it is still working to further extend mineralization.

NMC, a subsidiary of publicly traded South Korean company Dong Won Corp., started production at the mine in April 2010. In Q3 2011 the company produced 202.3 tonnes of molybdenum concentrate from a head grade of 0.31% molybdenum disulphide. With sales of 207,000 lbs. of molybdenum, the company realized revenue of US$2.8 million.

The Moland mine, sitting about 170 km southeast of Seoul and 32 km from Pyeongchang, has been designed to minimize its impact in this populous country. To reduce noise and dust, the company installed the main crushing circuit underground, while the putting the crusher in the mine also means it can transport ore efficiently to surface on a conveyor. Tailings are trucked to a nearby cement plant to be used as raw material, eliminating the need for a tailings pond.

The Moland property is made up of three claims totaling 8.2 sq. km. In addition, it purchased 6.2 hectares of land to act as a buffer between the mine property and surrounding agricultural land. Molybdenum mineralization has been known to exist on the property since 1966, and the first two adits were driven in 1973. Production from these two adits occurred in the late 1970s and early 1980s and amounted to 1,688 tonnes of molybdenum disulphide.

Moland contains a molybdenum-bearing skarn zone hosted in Ordovician carbonate sediments. The skarn is about 800 metres long with molybdenite occurring in fracture zones within the skarn and in disseminated form.

The mine is currently only run 12 hours a day, and the company has not entered into long-term offtake agreements as it bides its time until molybdenum prices recover. Molybdenum is currently selling for about US$12.80 per lb. after trading at over US$17.50 per lb. at the end of last year. In late 2008 the price plunged from a high of about US$35 per lb.

Dong Won controls roughly 64% of NMC’s 45.6 million fully diluted shares and KTB controls another 22%, leaving only roughly 4.5 million issued shares in the public float.

NMC also controls the historic Boss Mountain molybdenum mine in central British Columbia, 85 km east of Williams Lake.  Noranda operated the mine from the 1960s to 1983, when it closed the mine due to low metal prices.

On news of the resource NMC’s share price climbed 7¢ or 11.7% to 67¢ on 13,000 shares traded. The company has a 52-week share price range between 40¢ and $1.25.