Adanac Molybdenum

Holy molyThis junior mining company is plowing ahead with the first major new molybdenum mine in almost 30 years. With steadily accelerating global demand for alloying elements to make steel, and a worldwide shortage of molybdenum (moly), Vancouver, British Columbia-based Adanac Molybdenum is constructing an open pit mine in northern British Columbia at Ruby Creek, near the town of Atlin, about 75 miles southeast of Whitehorse, Yukon.   Molybdenum is a soft, lustrous silver grey flaky metal (easily confused with graphite) commonly associated in porphyry copper deposits as a by-product. Molybdenite (MoS2) is the natural mineral sulfide form of the metal. With a very high melting point, moly is primarily used as an alloy agent in steel; in fact, 75 percent of the moly consumed globally is used in steel production in one form or another, such as stainless steel and high strength, low alloy steel. ItÔÇÖs also used as a catalyst to remove sulfur from hydrocarbon streams, such as oil, gas or coal liquids. The commodity price of molybdenum has risen from $25 in early 2007 to $33 per pound today, and Ruby Creek boasts an NI43-101 resource calculation of over 212,000,000 tonnes. AdanacÔÇÖs state-of-the-art concentrator has a capacity for throughput of 20,000 tonnes per day, and is expected to produce 12ÔÇô14 million pounds of molybdenum per year during the initial four years of operation. The mine is expected to have a life of at least 20 years.Adanac received its environmental assessment certificate from the government of British Columbia in September 2007. The BC Mines Act Permit followed in June this year allowing work to begin on site preparation, earthworks, steel erection, mill construction and assembly, and open pit development. Adanac had previously ordered long delivery mining and processing equipment to allow site construction to start in February 2009 and production to start in Q4 2010. ÔÇ£Our project is the most advanced large scale open pit primary molybdenum mine in the world today and we are on track for a Q4 2010 production start,ÔÇØ said Peter Jones, Adanac President and CEO. ÔÇ£We plan to complete project funding this year and then start site construction in early 2009.ÔÇØ Supreme Steel Ltd. of Edmonton, Alberta has been contracted for the fabrication of the power plant building, crusher building, process building and maintenance building, for approximately $26 million. The order includes building steel frames, interior platforms, doors and cladding, which will be fabricated at SupremeÔÇÖs Edmonton and Delta shops. Transportation to the Ruby Creek site is scheduled to start in June 2009. Project equipment and material orders to date total approximately $137 million. On May 30, 2008, the company announced the completion of an $80 million bridge financing. Ruby Creek will be an open pit mine using conventional equipment and processesÔÇödrill and blast the rock to it break up, load it using a front-end shovel into haul trucks with a 150-200 ton capacity, take the waste to the dump, take the ore to a crusher, then through a secondary crusher, then through high pressure grinder rolls, then into a ball mill to produce sand-size particles which are sent to a froth flotation circuit, which bubbles air through a slurry. The moly particle, which is hydrophobic (Greek for water-fearing) globs onto the air bubble and floats to the surface where itÔÇÖs skimmed off and collected. The processed product is dewatered, dried, packaged, and shipped for roasting, to produce technical grade or ferro-moly, for industrial uses. AMEC Americas Limited has been contracted for the detail engineering and procurement aspects of the project and Klohn Crippen Berger Limited has prepared the detailed design for the tailing storage facility and site water management. Since Ruby Creek lies in the traditional territory of the Taku Tlingit First Nation, Adanac held careful, critical talks with them to build a mutually beneficial working relationship for the long term. The relationship between the mining industry and native peoples has been a sore point in the past. Some companies assumed that offering them jobs at a decent wage and a fair share of the revenue stream was enough, but today mining entities realize they have to be more sensitive to social and environmental issues. That can mean restrictions on particular activities at certain times of the year, and restoring the acreage as closely as possible to its original condition once the mining operation is complete and the company moves on. Adanac has gone to extensive lengths to convince local communities they are sensitive to their social and environmental concerns.The award of the Mining Permit underlines this. ÔÇ£Ruby Creek is an example of the vibrant mining sector at work in British Columbia,ÔÇØ said Minister of State for Mining Kevin Krueger. ÔÇ£The road is already in excellent working condition, and the operators are displaying that they are environmentally responsible in their actions to protect the fish habitat in Surprise Lake.ÔÇØ A fish habitat reserve has been created as part of the tailings impoundment permitting process to provide safe fish habitat and beneficial spawning, rearing and foraging areas in the Surprise Lake watershed, which is home to significant fish populations. The Government tailings impoundment review is expected to complete in 2009.Adanac also has three molybdenum (and/or copper/molybdenum) deposits in the US state of Nevada. The B & C Springs copper/ molybdenum deposit is located approximately 125 miles kilometers south east of Reno in an area that was extensively explored in the 1960s, 1970s, and 1980s by USSRAM sister companies and others. The Pine Nut molybdenum deposit is located approximately 50 miles south of Reno near the California border where a tungsten mine was operated in the 1940s and Climax Moly explored for molybdenum in the 1970s. The Cucomungo molybdenum deposit is located approximately 110 miles south-south-east of Reno.┬á