More moly next to Adanac’s proposed pit

Vancouver – Adanac Molybdenum‘s (AUA-T) scored additional low-grade moly next to its permitted Ruby Creek open-pit project 22 km from Atlin in the extreme northwestern corner of B.C.

Adanac drilled 40 holes as part of its 2007 and 2008 exploration and condemnation programs, and on news of the results its share price rose 2.2% to 47 at presstime.

Of note were 27 metres in hole 383 grading 0.15% molybdenum starting 47 metres down-hole, 76 metres in hole 382 grading 0.11% moly starting 82 metres down-hole and 43 metres in hole 380 grading 0.15% moly starting 57 metres below surface.

Adanac has so far released results for eight exploration holes. The rest are pending.The new mineralized area lies just beyond the northwestern outline of Adanac’s proposed open-pit and in between two faults, the Adera and Moly Lake faults. So far the company says the new zone is open at depth and to the southwest.

The Ruby Creek project contains 158 million proven and probable tonnes grading 0.06% moly and has been known about for decades.

Adanac Mining and Exploration (not related to Adanac Molybdenum) first staked the property in 1967 and completed a feasibility study for the Ruby Creek showing in 1971. Then in 1972 Climax Molybdenum optioned the property, only to drop it three years later.

Placer Development was next in line and, along with Adanac, Kerr-Addison and Climax, the company initiated a program, drilling 32,000 metres of core.

But the mine wasn’t to be. By 1982 work on Ruby Creek fizzled out and claims on it lapsed. Almost two decades later Adanac Gold (formerly Stirrup Creek Gold and now Adanac Molybdenum) re-staked the property.

Since then Adanac has completed a feasibility study on the project, ordered long-lead time mining equipment, secured $80 million for bridge financing and, perhaps most importantly, on June 20 received a provincial permit to operate a 20,000 tonne per day mine.

The feasibility study estimates that Adanac will produce a 54% moly concentrate with an 89% recovery rate. The pit plan included in the study optimizes ore removal during the first five years of a 21-year mine life to take advantage of high molybdenum prices and to lessen the payback period.

As with many other projects in the north, one of the major issues Adanac faced is what to do for its power supply. Although Adanac hopes it will gain access to the Yukon power grid by year five, the company has opted to use on-site diesel power generation. Although expensive, especially given today’s rising fuel costs, it means the mine can go forward faster and take advantage of healthy moly prices.