RE: Very good results compare to AUAHere is the complete news release:
Adanac Ruby Creek Molybdenum Project Review
1/16/2007
VANCOUVER, BRITISH COLUMBIA, Jan 16, 2007 (MARKET WIRE via COMTEX News Network) --
Adanac Molybdenum Corporation ("Adanac") (TSX VENTURE: AUA)(PINK SHEETS: ANCGF)(FWB: A9N) reports on recent events and a historical review of the Project situated 24 kilometers Northeast of Atlin, BC.
Historical Review:
The Ruby Creek property was acquired thru staking the claims in 2000. The occurrence of molybdenum on the property was first discovered in 1905 but serious and systematic development didn't get underway until the 1960's. Major Canadian companies (Kerr Addison Mines Ltd. and Placer Developments Ltd.) explored the property extensively and each completed feasibilities but neither proceeded to production on account of low molybdenum prices.
Adanac Gold Corp. (now Adanac Molybdenum Corporation) continued exploration to provide, along with much of the earlier exploration work, a sufficient and reliable basis to establish the molybdenum resource which met the most recent tight standards demanded by regulatory authorities - the National Instrument Policy 43-101. This was achieved in April 2005. On-going exploration in 2004, 2005 and 2006 has provided additional data; the 2006 results are currently providing the most up to date basis for Golder Associates to revise their earlier resource estimate (2005) which is shown below.
Based on a 0.04% Mo cut off the reserves are:-------------------------------------------------------Proven tonnes 38.9 million at 0.077% Mo 1.2 million at 0.0.035% Mo (stockpile)-------------------------------------------------------Probable tonnes 73.5 million at 0.060% Mo 30.1 million at 0.034% Mo (stockpile)-------------------------------------------------------Total tonnes 143.7 million at 0.059% Mo-------------------------------------------------------RUBY CREEK PROJECT SUMMARY----------------------------------------------------------------------------------------------------Mine Life: 21 years--------------------------------------------------------------------------Milling Rate: 20,000 tonnes per day--------------------------------------------------------------------------Strip Ratio: 0.95 (waste) /1.0 (ore)--------------------------------------------------------------------------Proven and Probable ore is: 113.4 million tonnes @ 0.066% Mo 30.3 million tonnes @ 0.034% Mo--------------------------------------------------------------------------Ore grade first 5 years: 0.084% Mo--------------------------------------------------------------------------Mill recovery: 89%--------------------------------------------------------------------------Molybdenum in concentrate: 75.9 million kilograms (167.4 million lbs.)--------------------------------------------------------------------------Preproduction capital ($Cdn): $434.4 million--------------------------------------------------------------------------Average Operating Cost (first 5 years): $5.87 US/lb/. Mo--------------------------------------------------------------------------Base Case: IRR equals 24.42%, NPV @ 8% equals $222.2 million Payback equals 3.1 years--------------------------------------------------------------------------With incorporation of the high IRR equals 28.85% NPV @ 8% pressure grinding rolls the equals $305.1 million economics are improved: Capital Payback - 2.9 years--------------------------------------------------------------------------
Adanac has the following advantages over the predecessor companies:
- Adanac has a 100% interest in the property, whereas the original property was burdened by a 3.5% NSR to Johns Manville. Kerr Addison, could only earn a 60% interest and Placer a 70% interest.
- The price of molybdenum is 14 times the price at which Kerr Addison undertook feasibility work in 1970 and 4 times the price when Placer undertook its feasibility studies.
- Multi-billion dollar long-term contracts are being entered into by Chinese corporations for the supply of iron ore which bodes well for a long sustained demand for molybdenum due to its extensive use in stainless steel and other steel products. Indications are for a steadily increasing demand for molybdenum.
- Currently surplus power is available from the Yukon Grid which would require the company to install only 100 kilometers of transmission line. Yukon power was not available in the 1970's and 1980's.
- Road access to Skagway, Alaska's deep water port is now available.
With the resource established (April 2005) the Company moved with speed to develop a preliminary feasibility. The basis was set at 20,000 tonnes per day mill throughput and, to eliminate probable delay associated with having to permit an overland hydro line for 100 kms where none existed (in addition to permitting an upgraded line on approx 150 kms existing line). The basis includes provision for electrical power, in the first 3 - 5 years, from diesel generators.
The preliminary feasibility was completed in a five month period (April - September 2005). The recommendations to proceed with full bankable feasibility was acted on immediately and this was completed April 2006 with recommendation to study the applicability of High Pressure Grinding Rolls (HPGR) technology as an alternate to conventional Sag Mill technology. This study indicated significant benefits for the project thru more energy efficient crushing/grinding. It is now included in the updated bankable feasibility.