RE:Question Bailey2,
Based on previous public statements made past year in interviews, Stuhini wants to get a scoping study, or PEA, completed.
My understanding is the company's plan is to first spin off the molybdenum deposit and nearby land into a separate company, with the remainder of the Ruby Creek Project and all the company's other exploration projects placed into a new company. That will require getting 100% ownership of Ruby Creek, and advancing the final option payment due in December 2023 by issuing 1,750,000 shares and paying $640,000 cash. Presently, the company has the funds available to make the $640,000 cash payment and still have about $900,000 cash left over based on information provided in the Q3 Nov 2022 financials and recently completed $1.3 million private placement .
A new PEA would require about $360,000 according to the company's March 2022 Mineral Resource Estimate (see below) .
There is the old Adanac Moly Corp Ruby Creek 2007 Feasibility Study which provided old CAPEX numbers of about CDN$640 million for a processing plant and tailings facillity. With inflation it would see that number being much higher today,pobably closer to double the price. Operating costs for the first 5 years were estiimated at CDN$13.08 / tonne and for the remaining life of mine after five years was CDN$8.11 / tonne. .
https://secure.kaiserresearch.com/i/jk/tr16/TRAUA20071201.pdf See Cost Tables on Pages 6 - 8
There's roughly 1.2 lb of moly per tonne of ore at Ruby Creek
What may be a good indication of the costs of a processing plant and tailings facilities for Ruby Creek ..... is a more recent 2022 Feasibility Study completed for Greenland Resources' Malmbjerg moly deposit which provides CAPEX and operating costs
https://greenlandresources.ca/data/pdfs/Malmbjerg-FS-Report-1.pdf The Malmbjerg study provided a US$820 million price tag for a processing plant, infrastructure and tailings facilities with an additional US$218 million sustaining CAPEX cost for a total of US$1.038 Billion. Operating costs estimates are US$12.82 / tonne (Table on page 1-16)
In the Greenland Resources Feasibility Study there are a few infrastructure expenses that shouldn't be required for any potential development at Stuhini's Ruby Creek project.
Malmbjerg needs to build an air strip for a mine support, whereas Atlin already has an airfield within 15 km of Ruby Creek. Malmbjerg is 33 km from the nearest airstip and 185 km from the nearest town.
"The nearest sources of logistical support are in Iceland, and currently supplies must either be shipped or flown to Mestersvig and then airlifted by helicopter to the site." (Page 1-4)
Malmbjerg requires road construction, Ruby Creek already has good road access. I drove out to the property this past summer. Pretty much the same as driving on well maintained rural roads. The previous operator of Ruby Creek, Adanac Moly Corp, spent $22 million upgrading the road from the bridge above Surprise Lake at the entrance to the Ruby Creek Project up to and over the moly deposit.
Seems a bit ludicrous that Stuhini Exploration's current market cap, at $19 million, is less than the $22 million price tag of the road Adanac Moly constructed in 2007-08 . How much would that road cost today ?
Malmbjerg will also require a 26 km RopeCon Conveyor system to transport ore from the mine site
to the proposed mill location. Malmbjerg will also require a port site facillity to be constructed for transportation of supplies, container storage, manpower transport, etc, as well as the road access construction. Ruby Creek terrain is much more accessible, with trucks being able to haul directly from a pit to a processing plant within a kilometer or two distance.
The Ruby Creek moly desposit has easy road access from the town of Atlin B.C. Atlin is
about 90 km south of the TransAlaskan Hiway which runs through southern Yukon. The hiway
south to Atlin is paved. Whitehorse, Yukon is about a 1 hour 45 minute drive from Atlin B.C .
The Ruby Creek deposit is also 275 km by road from the sea port of Skagway, Alaska.
I am assuming that operating costs and CAPEX for Ruby Creek would be somewhat lower that Malmbjerg. Probably still close to $1 Billion. The Malmbjerg Feasibility Study is relatively recent so should better reflect today's CAPEX and operating costs.
Eg. Stuhini's MRE provided operating costs of about US$10 / tonne whereas Greenland Reosurces operating costs are estimated at US$12.82 / tonne. The Ruby Creek resource estimate also used a moly price of US$15.00 / lb whereas Greenland Resources Malmbjerg used $18.00 / lb for their calculations.
With current spot moly prices at US$40.82 / lb, giving Ruby Creek an in situ value of US$19.5 Billion or C$26 Billion, it would appear that the deposit is quite economical anywhere down to about US$20 / lb .
Further reference :
Operating cost estimates for Ruby Creek provided in the March 2022 MIneral Resource Estimate completed by Mine Development Associates,
https://static1.squarespace.com/static/5a5e6f708a02c7259a0a2606/t/62674984b45ca03bd1346557/1650936231139/43-101_Ruby_Creek_Resource_v21.pdf Pages 115 - 116
" ..... To determine the “reasonable prospects for eventual economic extraction” the authors had a series of optimized pits run using variable molybdenum prices (from $3.5/lb to $30/lb), mining costs, flotation processing costs, and anticipated metallurgical recoveries. These resources are reported at a cutoff of 0.02% Mo which approximates anticipated internal economic cutoff grades based on operating-cost estimates for an envisioned open-pit mining and flotation processing scenario. The authors chose to report the resource considering mining costs of $2.00 per tonne and G&A costs of $1.00 per tonne. Flotation costs were $5.00 per tonne and recoveries were assumed to be 92%. The price of molybdenum used for the resource pit was $15/lb Mo. In addition, the optimization applies a roasting charge of $1.77/kg of molybdenum. The metal price was chosen because it is similar to but lower than metal prices at the time of this Report’s publication but higher than the long-term average. The price of molybdenum was ~$19.85 per pound of molybdenum at the time of completion of this report...... " Regarding a PEA study and further expansion and exploration drilling recommendations
Page 136 - 138
"...... 26.1 Phase I Preliminary Economic Assessment:
The project deserves to be evaluated again from an economic standpoint with a PEA. It is recommended to update those studies and the costs to determine current economics. Also, studies should compare the economics of the Ruby Creek Deposit based on Measured and Indicated material alone versus Measured, Indicated, plus Inferred material, the results of which would guide the drilling in Phase II. The cost of the PEA is expected to be approximately C$360,000 including the cost of reporting and a 10% contingency.
The total recommended Phase I program totals C$360,000 as shown in Table 26-1.
26.2 Phase II
Regardless of the outcome of the results of Phase I, drilling is justified. However, the results of Phase I will guide the objective and location of drilling in Phase II. If the economics of the Ruby Creek Deposit based on Measured and Indicated material alone is sufficiently favorable, then expansion and exploration drilling should be done as described below. The project is after all open to the east, south and southwest, and at depth down dip along the Adera fault zone. If the economics based on Measured, Indicated, and Inferred material is more attractive, then the drilling should concentrate on converting Inferred to Measured or Indicated.
Drilling: All core drilling should be no smaller than HQ size, and optimizing sample handling and processing should be emphasized to ensure the capture of most representative samples possible.
For expansion and exploration, drilling should be done on Thor Ridge, located about a kilometer east and southeast of the center of the deposit, where there is potential to define small volumes of mineralization that could be easily accessible to early mining. About 500m of drilling is proposed in this area but in 10 shallow drill holes. Farther south along Thor Ridge, the potential pits approach the top of the ridge therefore if the resource can be expanded to the south the strip ratio will incrementally decrease. Three holes for 1,550m of drilling is proposed in this area.
Drilling into the Adera fault zone from the northwest will give invaluable information as to the style and controls of mineralization along the fault zone as it would be drilling into and sub-perpendicular to the fault zone as opposed to parallel to it. These holes may not expand mineralization but would certainly add to understanding of the deposit and potentially open new opportunities and for potential underground minable resources.
The deposit is open to the southwest thus offsetting open-ended known mineralization in that direction could add incrementally to the resource. Some of the grades in this area are high. Five drill holes are recommended for this area totaling 2,700m. Upon completion of the 3DIP geophysics analysis and report, modification to the drilling in this area may be supported.
Alternatively, if infill drilling is determined to be more appropriate, the holes will be located within the resource limits and be dictated by appropriate pit shells and the location of the Inferred material within the pit shells.
Reporting:
As with any drill program, follow up interpretations, compilation and validation of data, and reporting is required. It is assumed that this task could cost C$38,000.
Update Resource Estimate:
It is assumed that much of the proposed drilling will encounter mineralization so the resource estimate should be updated. This work would require updating the database and the existing model and estimate, evaluating the QA/QCand reporting.
The total recommended Phase I program totals C$2,600,000 as shown in Table 26-2. " Once the moly deposit is 100% owned and spun off into a separate entity, I think It would be great if Stuhini could bring in a strategic partner to help advance the Ruby Creek moly deposit to a new PEA and Feasibilty Study prior to a decision to move forward to a construction decision. Adanac Moly Corp did procure an $800 million credit facility based on their 2007 Feasibilty study ... and the moly is still sitting in the ground .
I recall CEO Dave O'Brien mentioning in an interview or two last year about bringing in a strategic partner. As the above recommendations in the 2022 MRE state, there is a very good chance that the Ruby Creek moly deposit is much larger, and potentially higher overall grade if more drilling was done. All costs money .... bring in a big mining company as a partner, or sell the deposit outright . Get the ownership cleaned up first ...
GLTA !