Creston Moly boosts El Creston resource

Vancouver – Creston Moly (CMS-V) has significantly increased the total molybdenum and copper resource at its El Creston project in Mexico’s Sonora State.

The increase comes thanks to almost 8,000 metres of drilling since the 2009 pre-feasibility study that established the last resource. The new drilling gave a better understanding of the Main zone and allowed the inclusion of the Red Hill zone to the southwest.

El Creston now has a measured and indicated resource of 215.4 million tonnes grading 0.071% molybdenum and 0.059% copper for 335.5 million contained lbs. of molybdenum and 280.5 million lbs. of copper.

The resource is contained within a conceptual open pit and represents a 34% increase in contained molybdenum and a 77% increase in contained copper. The strip ratio was also improved from 1.23:1 to 0.94:1.

The 2009 pre-feasibility study envisioned a 40,000-tonne-per-day operation but the company believes that with the new pit design it could increase that to 50,000 tonnes per day.

The earlier study also set an after-tax net present value of US$306 million with an 8% discount, an internal rate of return of 20.2% and capital costs of US$576.2 million.

Bruce McLeod, president and CEO of Creston stated that “With the increase in resources, and a significant reduction in the strip ratio using lower molybdenum and copper prices than were used in the previous Pre Feasibility Study we are confident that we can significantly increase the asset value of this project going forward.”

Shortly before releasing the updated resource, the company announced the results of several holes not included in the resource.

Hole EC10-113 hit 33.6 metres carrying 0.243% Mo from 61 metres depth, close to the northern edge of the resource. Hole EC10-110, drilled on the southwest corner of the Main zone, cut 48.8 metres averaging 0.46% copper from 98 metres and an overlapping 33.6 metres grading 0.032% Mo from 107 metres depth. Hole EC10-109, close to the centre of the resource, hit 100.7 metres grading 0.07% Mo.

Commenting on the drill results, McLeod stated “with hole EC10-113 intersecting 0.243 per cent molybdenum midway between holes that intersected sections grading as high as 0.107% and 0.113% Mo it is apparent that there may be several areas which could be modelled as higher-grade starter pits in the upcoming technical studies.”

The latest drill results are part of the phase 3 drill program, while the company has already started work on phase 4 as it works towards a prefeasibility study for late this year. The company expects to complete a definitive feasibility study by the second quarter of 2011.

The project is located roughly 175 km south of the United States border and 145 km northeast of the city of Hermosillo.

Sulphides at El Creston consist of granite-hosted molybdenite and pyrite along with subordinate chalcocite and chalcopyrite. They occur as disseminations in the host, in quartz vein stockwork and in breccia zones.

Creston’s stock price climbed 19¢ or 90% to 40¢ between Oct. 14 and Oct. 26, when the resource update was released. The stock price was up 3¢ on 4 million shares traded on the day of the release.

In July the company closed a 20.5-million-share private placement at 18¢ for $3.7 million in gross proceeds. Creston has roughly 256 million shares outstanding or 297 million fully diluted.