Junior molybdenum hopeful Blue Pearl Mining (BLE-T) has inked a memorandum of understanding with Endako Mines to build a moly milling circuit at the Endako mine, near Fraser Lake, B.C.
Plans call for Blue Pearl to fund and build a 2,000-tonne-per-day milling circuit at the mine site, some 200 road-km from its Davidson project. Endako would receive a fee for management, supplies and personnel to operate and maintain the circuit.
The plan focuses on a measured and indicated resource of 6.7 million tonnes running 0.6% MoS2 (0.39% molybdenum metal), based on a cutoff grade of 0.44% MoS2. Total measured and indicated resources at Davidson come to 75.3 million tonnes grading 0.295% MoS2, at a cutoff grade of 0.2% MoS2.
Engineering consultant Hatch is expected to deliver the results of a feasibility study of mining the high-grade portion of the deposit in the third quarter.
Blue Pearl expects to finalize a deal with Endako by the end of May, at which time it would for over US$5 million, half of which it can pay in shares. Endako will also receive a sliding-scale fee based on the market price of molybdenum, ranging from US80 to US$2 per lb., subject to a minimum monthly fee.
The agreement allows for Blue Pearl to strike its own deals for the roasting and marketing of the resulting concentrate.
Meanwhile, underground drilling on the Lower deposit at Davidson continues to return encouraging results for Blue Pearl. The latest 2 holes include 39.6 metres running 0.47% MoS2 and 36.6 metres of 0.24% MoS2.
Assay results are pending for another 4 holes; another failed to cut the deposit. The Lower deposit lies around 300 metres below the Main deposit. It was discovered by Climax Molybdenum in 1972. Two holes sunk by Climax cut 49 metres of 0.46% MoS2 and 36.5 metres of 0.37% MoS2.
The lower deposit is not included in the above resource estimate.
Endako Mines is a joint venture between Thompson Creek Mining and Sojitz Moly Resources.
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