Adanac Molybdenum Corporation AUAYF

RE: molybdenum?

[guesshoo]

Just found this. A e-mail: [e-mail] [phone] pril 5, 2004 Adanac Gold Corp. (AUA-V: $0.43: 25M shs f.d.) is not just another gold company; in fact it is not a gold company at all. Adanac is developing their Molybdenum property located 24 kilometres northeast of Atlin, BC. Adanac is making ready to start a program which will confirm pilot plant recoveries of 91% will also immediately initiate an independent reserve study to confirm Placer Development Ltd.’s open pit resource of 152 million tonnes grading .063% Mo at a cut off grade of .04% Mo and a strip ratio of 1.5/1. A feasibility study completed by Placer Development Ltd. in 1981, forecasted a 14,000 tonne/day milling rate for 17 years with an average grade of 0.115% molybdenum sulphide. Based on $6.00 (US)/lb price of roasted molybdenum, the study defined a 16% (after tax) Internal Rate of Return. Estimated capital cost was $131 million with a three year payback. This is a timely program with molybdenum prices reaching a ten year high with the incredible surge in steel production and the resulting need for moly as an essential alloy. The posted Western price of fero moly hit $43.00 per kg on Friday. MoO3 is at $15.50 per lb. I'm very confident that these prices are sustainable with the long-term growth prospects in China and the resulting heightened demand for steel in Asia generally. Adanac is to my knowledge the only pure molybdenum project that has had a positive feasibility study performed courtesy of Placer Dome, which mothballed the project when the moly price slid and eventually sold off all their base metal assets. A gross valuation of this resource quickly establishes just how undervalued Adanac’s shares appear to be at current prices. The resource of 190 million lbs of contained moly translates into $0.06 of market cap of per lb of moly - 0.4% of the reserve value. In other words, Adanac’s share price is a fraction of the value of the ore in the ground - $11.3 million market cap. vs. $3.7 billion in-ground value. In comparison, gold stocks (non-producers) trade at a market cap of $20 to $120 per ounce of reserves (avg US$42/oz) - 5% to 20% of their reserve value. If Adanac traded at 5% of its reserves, that would be $7.50/sh. This comparison illustrates the unrealized value in Adanac’s moly asset that the market has yet to discover. This summer’s exploration by Adanac Gold will include drilling near hole #6W-8N where with 0.132% MOS2 over 1500 (200'-1700') feet. This hole was not included in the resource estimate. In addition, prospecting trenching and soil sampling will take place on the polymetalic, tungsten gold, copper gold and gold occurrences along a 3000 meter zone. Adanac is, in my opinion, a strong speculative Buy. guesshoo