Feasbility study for Ashdown moly mine

Although molybdenum production is already underway at the Ashdown mine near Denio, Nevada, joint venture partners Golden Phoenix Minerals and Win-Eldrich Mines (WEX-V) have released a technical report, feasibility study and reserve estimate.

Current reserves total nearly 117,000 tons grading 1.65% molybdenum for 3.8 million lbs. molybdenum while resources are 182,000 tons grading 1.51% for 5.5 million lbs. moly.

A cut-off grade of 0.65% molybdenum was used and is based on a projected price of US$30 per lb. in 2008, declining to US$22.50 per lb. in 2011.

The mine life is currently estimated at 3.3 years with production expected to total 3.8 million lbs. over that time by milling at a rate of 100 tons per day achieving a 90% recovery rate.

Operating costs are estimated at US$300 per ton while the life-of-mine average cost of producing a lb. of molybdenum is estimated at US$10.10. Capital investment required this period was pegged at US5.35 million and the net present value of the project is thought to be US$35.3 million at an 8% discount rate.

In 2007, about 396,000 lbs. of molybdenum was produced from the mine and soldeat an average price of US$31 per lb.

The companies say that the deposit has exploration potential in three ways.

One would be to convert vacant reserve blocks in the current model into reserves. Some reserve blocks were not included in the reserve estimate because there were large gaps in drilling between the mineralized blocks or there wasn’t enough drilling done.

Another area with potential is the down dip and strike extensions of the Sylvia and Main veins below 450 feet, north and south of the 1,800 feet strike length.

Finally, potential exists regionally as anomalous molybdenite geochemistry has been has been demonstrated wide-spaced drilling, rock-chip samples and in soil samples over a three-mile length, which lies along the projected strike of current reserves. Also, a few drill holes have intercepted vein mineralization similar to the Sylvia vein but the relationship is still unknown due to lack of drilling.