seeclear
14 years ago
Adanac Announces Emergence from CCAA Date : 02/28/2011 @ 5:30PM
Source : MarketWire
Stock : Adanac Molybdenum Corporation (AUA)
Quote : 0.06 0.0 (0.00%) @ 7:01AM
Adanac Announces Emergence from CCAA
Adanac Molybdenum Corp. (TSE:AUA)
Intraday Stock Chart
Today : Tuesday 1 March 2011
Adanac Molybdenum Corporation ("Adanac" or the "Company") (TSX: AUA) is pleased to announce that it has successfully implemented its plan of compromise and arrangement (the "Plan") and has emerged from creditor protection under the Companies' Creditors Arrangement Act ("CCAA"). Adanac emerges from creditor protection with limited current liabilities, no legacy liabilities, and with cash for reasonable working capital purposes. On implementation of the Plan, Adanac's outstanding common shares were consolidated on a 150 to 1 basis, with 24,698,688 post-consolidation common shares issued to creditors. Following its emergence, Adanac will have 25,462,544 issued and outstanding common shares. Adanac's common shares are listed on the Toronto Stock Exchange ("TSX") and are expected to start trading on a consolidated basis on March 3, 2011.
In connection with the Plan, Adanac has received conditional approval to list its common shares on the TSX Venture Exchange ("TSXV"). The Company expects to satisfy the listing conditions and have its common shares listed on the TSXV in the near future. The transition from trading on the TSX to the TSXV will be coordinated so that there is no gap in trading. There are no issued or outstanding options or warrants. Adanac's primary focus is on partnering with an entity interested in developing Adanac's 100% - owned and substantially permitted Ruby Creek Property.
The following sets out the name and background of the Adanac's new directors and officers:
Leonard J. Sojka
Mr. Sojka will serve as President and director and as a member of Adanac's audit committee.
Mr. Sojka has served as the Chief Restructuring Officer of Adanac since July 2010. In that capacity, he has orchestrated Adanac's emergence from creditor protection under the CCAA, including bringing Adanac into compliance with its financial filings and negotiating with equipment vendors to dispose of mining equipment and related liabilities.
Mr. Sojka also serves as the Chief Financial Officer of a TSX-V listed natural resource company. Mr. Sojka has served as a director of TSX-V listed and NYSE Amex listed natural resource companies. In both instances, Mr. Sojka served on the audit committee and was intimately involved with the mergers and acquisitions function. Mr. Sojka has more than 25 years experience in the investment management and securities industries, with more recent focus on the global metals and mining sector.
Mr. Sojka received an MBA in Finance from the University of Chicago Graduate School of Business in 1986, and a BSB in Accounting from the University of Minnesota in 1979. Mr. Sojka was also a practicing Certified Public Accountant in Minnesota.
John W. Cutler
Mr. Cutler will serve as an independent director and as a member of Adanac's audit committee.
Mr. Cutler is a director, President and CEO of a TSX-V listed natural resource company. Mr. Cutler is also an independent director of an NYSE Amex listed natural resource company. In both instances, he serves on the audit committee and is intimately involved with the mergers and acquisitions function. Previously, Mr. Cutler was an investment strategist with a multi fund manager specializing in energy and natural resource investments. Mr. Cutler has compiled more than 30 years experience in the investment management and securities industries.
Mr. Cutler received a BS in Finance from the University of Virginia - McIntire School of Commerce in 1974. He also pursued further studies at The New York Institute of Finance and The New School, NYC.
Robert H. Pinsent
Mr. Pinsent will serve as an independent director and as a member of Adanac's audit committee.
Mr. Pinsent has worked as a consulting geologist for the previous 10 years. Mr. Pinsent's experience includes serving as the chief geologist for Adanac during its most recent series of drilling campaigns at Adanac's flagship Ruby Creek Project. In the capacity of chief geologist, Mr. Pinsent was instrumental in shepherding Ruby Creek through its feasibility process and the British Columbia Environmental Assessment Review process. Mr. Pinsent's familiarity with Adanac began with initial field work in 1981. Mr. Pinsent has over 35 years experience working in the natural resource field, both for private industry and provincial agencies.
Mr. Pinsent received a B.Sc., (Honours), Geology from the University of Aberdeen, Scotland in 1968, a M.Sc., Geology from the University of Alberta, Edmonton in 1971, and a Ph.D., Geology from the University of Durham, England in 1976.
Maria L. Tejada
Ms. Tejada will serve as Adanac's Chief Financial Officer.
Ms. Tejada has served as a Senior Accountant and then as Adanac's Controller since May 2007. In that capacity, Ms. Tejada has been heavily involved in all aspects of Adanac's financial and operational history leading up to and through the CCAA process. Ms. Tejada was instrumental in helping Adanac to regain compliance with its financial filings. Previously, Ms. Tejada held accounting positions in the Philippines and in British Columbia.
Ms. Tejada received a BS in accounting from St. Louis University in Baguio City, Philippines in 1985.
Alicia D. Marshall
Ms. Marshall will serve as Adanac's Vice President - Administration.
Ms. Marshall has served in a wide variety of capacities since February 2007. Most recently, she has been instrumental in facilitating due diligence for the pending sales transaction of Adanac's major equipment items. Ms. Marshall's contributions have also been crucial in furthering Adanac's effort to emerge from CCAA protection. Ms. Marshall will continue in her multifaceted administrative role in Adanac's forthcoming effort to find partners to develop the Ruby Creek Project.
Information and documents relating to Adanac's financial filings are available on www.sedar.com. Information and documents relating to Adanac's CCAA proceedings, including the Plan, are available on the website of Adanac's Court-appointed Monitor, KPMG Inc.: www.kpmg.ca/adanac.
About Adanac Molybdenum Corporation
Adanac owns the Ruby Creek Project, which is located in northwest British Columbia. Adanac has advanced this primary molybdenum property through feasibility studies and an updated resource estimate.
Cautionary Notice: This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation and United States securities laws including the implementation of the Plan. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward looking information. Many of these assumptions are based on factors and events that are not within the control of the Company and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward looking information include risk factors discussed in the Annual Information Form for the year ended April 30, 2010 for the Company available at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking information.
These securities have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities law, and may not be offered or sold in the United States unless an exemption from such registration is available.
Contacts:
Adanac Molybdenum Corporation
Leonard J. Sojka
President
(604) 535-6834
(604) 536-8411 (FAX)
info@adanacmoly.com
www.adanacmoly.com
seeclear
16 years ago
AUA...Let the games begin: pennysleuth.com | Meet the Editors | Archives | Contact Us
Juniors Benefit from Falling Molybdenum Prices
By Jim Nelson
November 11, 2008
As expected, molybdenum prices fell sharply over the last two weeks. The metal has finally fallen in line with the rest of the commodities. For us, this is a benefit.
Molybdenum is not traded like copper, zinc, or nickel. It’s such a rare element; it is actually bought by steel and fertilizer companies straight from miners. There’s simply not enough of it to be traded on a commodities exchange like other base metals.
Because many projects have been cut and expenses are tight worldwide, demand for many metals has temporarily slipped in recent months. That’s why copper, zinc, and nickel are down 50% to 55% since July.
Since molybdenum goes months without new bids, its price hasn’t budged from its $34 rate. That’s why, when the most recent contracts came in, the negotiated price was slashed.
While that doesn’t sound like a positive for molybdenum miners, it may prove to be the best possible development for many juniors. You see, most juniors aren’t actually selling any molybdenum yet. So, they don’t have to take this price. Others, however, are taking a beating.
Freeport-McMoran Copper & Gold Inc., for instance, has a few molybdenum mines in Colorado, where they are cutting production and closing up shop. This drop in prices makes these mines uneconomical to run. The company said they plan on reopening the mines when prices climb back up. But, it’ll take 12-18 months for Freeport to get them back to full capacity.
Shut downs like these should bring the price of molybdenum back up to where it was trading before and eliminate some competition. But there is a second development here…
*******************************
HOW TO SNAP UP RAW GOLD... AT JUST ONE PENNY PER OUNCE!
There’s no alchemy involved. No secret technology. And no smoke and mirrors. But a small, upstart new mining company is doing exactly that…
*******************************
Governments all over the world are tackling the current economic crisis in different ways. One approach is starting to emerge in many countries. President-elect Barack Obama has repeatedly stated that the best way to fight through a crisis like this is by implementing more building projects. Referring to the Tennessee Valley project under FDR during the Great Depression, Obama claims that infrastructure projects offer the best for both the country and its citizens.
Other world leaders are jumping on to this approach. China just unveiled a $586 billion economic stimulus plan that will invest heavily in the country’s growing infrastructure needs. When there’s infrastructure in the works, demand for molybdenum goes through the roof. Steelmakers require molybdenum for building everything from pipelines to construction equipment.
Developments like these will surely boost the price of the metal by the time juniors’ mines come online.
Unfortunately, there aren’t too many players in this field. Here’s a short list of a few that should benefit:
Quadra Mining Ltd (QUA: TSE) has a 211-million pound molybdenum mine with planned development program through mid-2009.
Roca Mines Inc (ROK: CVE) operates a 191-million pound molybdenum mine already in production with planned increases during the next several quarters.
Augusta Resource Corp (AZC: AMEX) has a 190-million pound molybdenum mine scheduled for initial production in 2011.
None of these are recommended for the faint of heart. We aren’t suggesting you purchase shares of any of these three. But as the Chinese proverb goes. “A crisis is an opportunity riding the dangerous wind.” The crisis wind may be blowing…
Sincerely,
Jim Nelson
P.S.: If you think 200 million pounds of molybdenum is enticing, you need to check out our latest find, which is sitting on 1.3 billion pounds of molybdenum and is set to begin production in 2010. That’s the largest pure play in the business, and one of the cheapest price tags. Check it out here…
Editor’s Note: As always send any questions or concerns to us at jim@pennysleuth.com.
seeclear
16 years ago
AUA:..."Gittin'closer"...A reminder why.... ADANAC MOLY CORP.
Peter Degraaf
MOLYBDENUM - MOLYMANIA!
"Little known metal now in big demand".
Molybdenum is a hard, grey, metallic element used to harden steel alloys. Its alloying versatility is unmatched, because its addition enhances strength, hardenability, welding toughness, elevated temperature strength, and corrosion resistance.
The demand for molybdenum (moly), is currently exceeding production, and the price is a reflection of this demand. Gold may be up by 300% since commodities bottomed in 2001, silver up by 350%, copper has increased 500%, nevertheless the one commodity that is well ahead of the field is molybdenum.
In just 3 years moly prices have skyrocketed from 2.00 in 2002 to 26.00 a pound in 2006, an increase of 1200%. Demand for moly comes from many segments of the economy, but primarily from the oil and gas industry, as pipelines demand incredible amounts of hardened steel. A recent US report estimates the demand for natural gas alone will require a 30% increase in pipelines.
Moly has no substitute. It is essential in the construction of drill stem steel tubing used by oil and gas drillers, and in the building of ships, bridges and skyscrapers. Nearly 62 percent of the metal comes as a bi-product from copper mining, as pure moly deposits are even scarcer than moly itself.
One of the essential features of moly is that it is anti-corrosive. If B.P. had used more moly in the construction of its Alaska pipeline, they might have been able to prevent the recent leak. Moly is also being used in the conversion of coal to hydrocarbon liquids. This application has unlimited potential, as oil and gas become scarcer, and the world turns to alternative fuels.
Moly is also vital to the booming nuclear power industry, with hundreds of new plants either under construction or on the drawing boards.
The world-wide trend towards cleaner air, despite an ever-increasing number of motor vehicles, is also adding to the need for moly as a catalyst. The rapid increase in the price of moly has created an opportunity for moly producers and explorers to cash in on this bonanza. Most of the moly that is presently being mined is coming into the marketplace from large companies that mine copper, as moly is most often found where there are copper deposits.
Miners are now frantically searching the planet for moly sources. Several junior exploration companies have moly projects in British Columbia. One of the most exciting prospects is Adanac Moly, headed by Mr. Larry W. Reaugh, who has been interested in moly for a number of years, and when he perceived that moly demand was beginning to overwhelm supply, he moved in, and acquired the 10,000 acre Ruby Creek moly deposit in B.C. The property was known, for at least 40 years, to have moly in abundance, but low prices kept the previous owners from developing the site.
Thanks to the vision of its CEO, Adanac Moly (TSX.V:AUA; Pink sheets ANCGF; Frankfurt A9N) has recently completed its final feasibility study, conducted by Wardrop Engineering, which indicates that the Ruby Creek moly deposit has the potential to earn a billion dollars or more over the next 20 years. The report estimates that at current moly prices the mine payback period is 3 years.
Adanac Moly is planning a 20,000 ton open pit mine with measured and indicated (43-101 compliant) resources of 286 million pounds of moly. The Ruby Creek molybdenite occurrence is, according to the Table of Significant Porphyry Molybdenum Resources in B.C. (contained in British Columbia Ministry of Energy and Mines geofile report #2005-23) one of the largest unexploited known moly deposits in B.C.
Production is expected to commence late 2007, or early 2008. Once in production, Ruby Creek has the potential, at current moly prices, to generate 75 to 80 million dollars (Cdn) per year. Even if the price of moly should drop to $8.00/lb, the operation is still expected to generate a profit.
On June 28th 2006, Adanac began 45 degree angle drilling. This type of drilling is required for metallurgical testing, but will also determine whether vertical fractures contain significant amounts of moly. Bulk testing of 10,000 tons surrounding 6 drill holes by Kerr Addison in 1969 resulted in a remarkable 20% increase in grade. Drill results from current drilling, are expected to substantiate the theory of mineralized vertical fracturing, thereby increasing the resource by an estimated 20%, as well as reduce the cost of production to below 5.00 a pound.
This will obviously increase the resources, and make the profit potential even greater!
seeclear
16 years ago
Adanac Updates Ruby Creek Bankable Feasibility Study Costs
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 10/22/08 -- Adanac Molybdenum Corporation ("Adanac or the Company") (TSX: AUA)(PINK SHEETS: AUAYF)(FRANKFURT: A9N) announces that it has updated capital and operating costs for its 100% owned Ruby Creek Molybdenum mine project in Northern British Columbia (the "Ruby Creek Project") to the end of the third quarter of 2008.
In addition to the Bankable Feasibility Study cost update, Adanac has examined an alternative plan of increasing the mine production rate from the December 2007 Bankable Feasibility Study throughput of 23,000 tonnes per day to 30,000 tonnes per day after production year three. The alternative plan's economic results are encouraging and are also provided in this news release.
Adanac is seeking project financing which the Company plans to be in place before the end of 2008.
The Ruby Creek Project, with a production rate of 23,000 tonnes per day, has an updated capital cost estimate of Cdn. $647 million and life of mine average annual site operating costs of US$9.75 per pound of Molybdenum (Mo), generating a Net Present Value (NPV) at an 8% discount rate of US$110 million and an Internal Rate of Return (IRR) before tax of 12.0%. The December 2007 Bankable Feasibility Study had a capital cost estimate of Cdn. $640 million and life of mine average annual site operating costs of US$7.41 per pound of Mo, generating an NPV (at an 8% discount rate) of US$295 million and an IRR of 18.9%.
Compared to the updated Bankable Feasibility Study costs the alternative 30,000 tonne plan, examined by Adanac, has the same initial capital cost of Cdn. $647 million, as well as the same permitting and production rate to the end of production year three. During the life of mine an additional US$45 million of sustaining capital is required. The alternative 30,000 tonne plan life of mine average annual site operating costs of US$7.63 per pound of Mo, generates an NPV (at an 8% discount rate) of US$387 million and an IRR of 19.8%.
Peter Jones, Adanac's Chairman and CEO, said, "The alternative 30,000 tonne plan is very attractive and warrants pursuing in detail." He went on to say, "The world economic situation is challenging but we are driving ahead with the most advanced primary Moly project in the world, which is permitted and ready to start construction immediately funding is available. We are currently in discussions with several potential strategic partners to arrange off-take agreements and a possible joint venture partnership. Based on the updated capital and operating costs, which reflect pre-ordered long-lead equipment at fixed prices and the alternative 30,000 tonne per day plan, the economics are very attractive and are not reflected in our current share price especially as we have de-risked the project and have identified several upside opportunities."
NI 43-101 and Exploration
The previously reported February 22, 2007 NI 43-101 Mineral Resources were used in the December 2007 Bankable Feasibility Study, the updated feasibility costs and the alternative 30,000 tonne plan. This Mineral Resource contains Measured and Indicated mineral resources, using a 0.04% Mo cut-off grade, of 212.9 million tonnes at 0.063% Mo with Proven and Probable mineral reserves of 157.7 million tonnes at 0.058% Mo.
The February 22, 2007 Mineral Resources do not include exploration drill results from the Company's 2007 and 2008 program. This 60-hole program focussed on mineralization outside the northwest wall and below the feasibility design of the open pit. All the 2007/2008 exploration drill results are expected to be issued, and the NI 43-101 Mineral Resources are also expected to be updated, prior to the end of 2008. Exploration results to date are encouraging and Adanac expects additions to the Mineral Resources when they are updated, with a potential mine life extension.
Capital Cost Update - Feasibility Study
The capital cost estimate update is Cdn. $647 million and is accurate to +/-15%. It excludes production ramp up, interest costs and financing costs. It includes a contingency of Cdn. $51 million and long-lead equipment and other expenditures to date have not been deducted. The estimate compares to Cdn. $640 in the December 2007 Bankable Feasibility Study.
Pre-ordered long-lead delivery equipment
Adanac has ordered Cdn. $149 million of long lead equipment and has paid to date over Cdn. $48 million for this equipment. In addition, Cdn. $16 million has been expended on final design engineering by AMEC Americas and the road to site has been upgraded at a cost of Cdn. $9 million.
Project funding
Adanac is actively engaged in procuring project financing which is currently planned to be completed by the end of 2008. Bridge financing of US$80 million was obtained in May 2008. If project funding can be sourced by the end of 2008, a construction start is expected in February 2009 with construction completion by October 1, 2010 followed by a three month ramp up and with full production planned for January 1, 2011. The delivery schedule for the pre-ordered long lead equipment allows for this aggressive 20-month schedule to production.
Operating Cost Update - Feasibility Study
The following shows the estimated life of mine average annual site operating costs:
US$/ lb. Mo
-----------
Administration $0.90
Mining 1.90
Processing 6.95
-----------
Total average operating costs $9.75
-----------
Similar operating costs from the December 2007 Bankable Feasibility Study were US $7.41 per pound of Mo. The higher cost is primarily due to US$90 per barrel of crude oil and site power generation used for the life of mine.
Alternative 30,000 tonnes per day Plan
Adanac has investigated increasing the production rate at its Ruby Creek Project from the December 2007 Bankable Feasibility Study rate of 23,000 tonnes per day to 30,000 tonnes per day after production year three. This expansion has not been studied at the feasibility level of accuracy. The expansion uses the February 22, 2007 NI 43-101 Mineral Resources and the same open pit extraction plan. The rate of mining is increased and the higher production rate through the concentrator is expected to result in a lower recovery of Mo compared to the December 2007 Bankable Feasibility Study. The capital cost and operating costs through production year three are similar to the December 2007 Bankable Feasibility study.
The 30,000 tonnes per day alternative plan:
- Increases production to 30,000 tonnes after production year 3;
- Reduces Mo concentrator recovery from about 90% to about 83.5% after production year 3;
- Installs grid power, after production year 5; and
- Uses CPM Group's higher range Mo price forecast (see below).
Capital Cost - Alternative 30,000 tonnes per day Plan
The capital cost is estimated to be Cdn. $647 million, identical to the feasibility study update and other aspects of the production ramp up and schedule to production are identical to the feasibility study update. A sustainable capital cost increase, over the life of mine, of US$45 million is required for the alternative plan over the feasibility study update.
Operating Cost - Alternative 30,000 tonnes per day Plan
The following shows the estimated life of mine average annual site operating costs:
US$/ lb. Mo
-----------
Administration $0.77
Mining 1.95
Processing 4.91
-----------
Total site operating costs $7.63
-----------
CPM Group - July 2008 Price Forecast
In addition to updating its capital and operating costs, the Company has updated its molybdenum price assumptions based on a July 2008 update to CPM Group's molybdenum market research which includes a long-term price of US$16.50 per pound.
The following graph indicates the price forecasts provided by the CPM Group:
To view the graph accompanying this release please click on the following link: http://media3.marketwire.com/docs/AdanacGraph.pdf
The CPM Group is based in New York and provides commodity forecasting for a variety of commodities. Mo prices are shown in US$.
Economics Results (1)
The following table shows the key operating and investment indicators on a life of mine basis:
Feasibility Alternative
Update 30,000 tonnes Plan
----------- ------------------Selling price (US$ lb. Mo) $ 17.90 $ 20.12
Capital cost (Cdn. $ millions) $ 647 $ 647
Sustaining capital (US$ millions) $ 83 $ 128
Operating costs (US$ lb. Mo) $ 9.75 $ 7.63
EBITDA (US$ millions) $ 1,332 $ 1,970
Pre tax NPV(8) (US$ millions) $ 110 $ 387
Pre-tax IRR 12.0% 19.8%(1) Values have been translated at US$0.85 equals Cdn. $1.00 during the
20-month construction period and US$0.80 equals Cdn. $1.00 thereafter. Operating costs are annual average site costs.
Updated Reports
The December 2007 Bankable Feasibility Study was posted on SEDAR in December 2007. Adanac will post on SEDAR two reports by Wardrop Engineering Inc. entitled "Ruby Creek Feasibility Study Operating Cost Update" and "Ruby Creek Feasibility Study Capital Cost Update", which contains detailed cost update information. Wardrop did not study the alternative 30,000 tonne plan.
Qualified Person
Richard C. Alexander, B.Sc., P. Eng., who is a qualified person under NI 43-101 and is independent of the Company, has reviewed the 23,000 tonne per day Bankable Feasibility Study updated capital and operating costs but has not reviewed the alternative 30,000 tonne plan or other economic results shown on page four of this news release.
About Adanac Molybdenum Corporation
Adanac Molybdenum Corporation is listed on the TSX and Frankfurt exchanges and owns the Ruby Creek Project in northern British Columbia. The Company has advanced the project through feasibility studies, a production decision and has previously ordered long-lead equipment, completed permitting for construction, constructed a road to the site and secured US$80 million in bridge financing. The Company is sourcing construction funding and plans a site construction start in February 2009 and production in the fourth quarter of 2010.
Cautionary Notice: This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation and United States securities laws. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward looking information. Many of these assumptions are based on factors and events that are not within the control of the Company and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward looking information include risk factors discussed in the Annual Information Form for the year ended April 30, 2008 for the Company available at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking information.
These securities have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities law, and may not be offered or sold in the United States unless an exemption from registration is available.
Contacts:
Adanac Molybdenum Corporation
Peter R. Jones
Chairman & CEO
(604) 535-6834
(604) 536-8411 (FAX)
Email: info@adanacmoly.com
Website: www.adanacmoly.com
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seeclear
16 years ago
Adanac Molybdenum Corporation: Ruby Creek Project-$26 Million Building Fabrication Award
Date : 08/11/2008 @ 4:40PM
Source : MarketWire
Stock : Adanac Molybdenum Corporation (AUA)
Quote : 0.415 -0.015 (-3.49%) @ 3:47PM
Adanac Molybdenum Corporation: Ruby Creek Project-$26 Million Building Fabrication Award
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 08/11/08 -- Adanac Molybdenum Corp. ("Adanac or the Company") (TSX: AUA)(PINK SHEETS: AUAYF)(FRANKFURT: A9N) announces it has awarded Supreme Steel Ltd. of Edmonton, Alberta the fabrication of the Ruby Creek Project Power Plant Building, Crusher Building, Process Building and Maintenance Building, at a total cost of approximately $26 million.
The order includes building steel frames, some interior platforms, doors and cladding, which will be fabricated at Supreme's Edmonton and Delta shops. Transportation to the Ruby Creek site is scheduled to start in June 2009.
Adanac has previously ordered long delivery mining and processing equipment to allow the project site construction to start in February 2009 and production to start in Q4 2010.
The project equipment and material orders to date total approximately $137 million.
The Company has also previously constructed a road to site as well as installed a 100 man camp and has received all necessary permits to construct the mine.
The Company has previously raised bridge financing of US$80 million and the process to source the final construction financing is underway.
Peter R. Jones, Adanac CEO, said, "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." He also said, "We plan to complete project funding this year and then start site construction in early 2009."
About Adanac Molybdenum Corporation
Adanac Molybdenum Corporation is listed on the TSX and Frankfurt exchanges and owns the Ruby Creek Molybdenum Project in Northern British Columbia. The Company has advanced the project through feasibility studies, a production decision and has previously ordered long-lead equipment, completed permitting for construction, constructed a road to the site and secured $80 million in bridge financing. The Company is sourcing final construction funding and expects a site construction start in February 2009 and production in Q4, 2010.
seeclear
16 years ago
Adanac Molybdenum Corporation: Senior Management Core Team Appointment
Date : 08/05/2008 @ 6:00AM
Source : MarketWire
Stock : Adanac Molybdenum Corporation (AUA)
Quote : 0.39 0.0 (0.00%) @ 8:00AM
Adanac Molybdenum Corporation: Senior Management Core Team Appointment
VANCOUVER, BRITISH COLUMBIA (TSX: AUA)(PINK SHEETS: AUAYF)(FRANKFURT: A9N) ("the Company") is pleased to announce, effective August 01, 2008 that the Board of Directors has approved the appointments of:
Peter R. Jones - Chairman, President and Chief Executive Officer
Christopher C. Kirby - Vice President and Chief Financial Officer
Kenneth W. Calligar - Vice President Finance
Mr. Jones P. Eng., has 38 years of extensive experience in the mining industry and has held senior operating and project positions in gold, potash, coal and base metals with Cominco Ltd., Anglo American and HudBay Minerals. Most recently, he was President and CEO of HudBay and was instrumental in establishing HudBay by raising debt and equity. For the last two years he was also Chairman of the Mining Association of Canada and in 2006 was named Prairie Region Entrepreneur of the Year by Ernst and Young. He is a mining engineer and graduate of Camborne School of Mines and the Banff School of Advanced Management.
Mr. Kirby C.A. has 25 years of senior financial and business experience and for the last 14 years was employed with INCO and was an Officer and Assistant Comptroller. With INCO he played a key role in acquisitions including Voisey's Bay, in Newfoundland and the Goro Project in New Caledonia. He was also responsible for disclosure and compliance with US and Canadian Security regulators. Additionally, he participated in numerous debt and equity issues of more than $3 billion on the NYSE and TSX. Mr. Kirby, prior to INCO, was Senior Manager with KPMG in Toronto and holds an Honours B.A. and Honours M.A. from Cambridge University, UK.
Mr. Calligar was most recently Managing Director of Jefferies & Company, a New York based investment bank, where he specialized in raising capital for both public and private companies, and where he was instrumental in the placement of Adanac's recent bridge notes financing. He has been credited with creating unique financing structures including one recognized by Euromoney magazine and Ernst & Young as the "Equity Deal of the Year" in 2007 for renewable energy companies. During his 25 year Wall Street career, he has successfully represented dozens of companies in raising more than $10 billion in institutional capital. Mr. Calligar was formerly head of Convertible Capital Markets at Chase/H&Q and a founding partner of Forum Capital Markets. He is a graduate of Brown University with degrees in history and political science.
Peter Jones, Chairman, President and CEO said, "I am very pleased with the vision, skills and in-depth experience that the new Senior Management Core Team brings to address the significant opportunities available to our Company to quickly move through final project funding, construction and production." He also said, "Adanac is indebted to Mr. Roger Taylor and Mr. Paul Nelson, Directors of the Company, who committed extraordinary time and effort to establish the new Senior Core Management Team."
Ms. Gayle Dalli, Vice President Finance has left Adanac to pursue other interests. The Board thanks Ms. Dalli for her efforts, particularly associated with the Company's recent bridge financing.
Adanac Molybdenum Corporation owns the Ruby Creek Molybdenum deposit in Northern British Columbia and has advanced the project through feasibility studies and a production decision. The project has previously ordered long-lead equipment, completed permitting for construction, constructed a road to the site and secured bridge financing. The Company is currently sourcing construction final funding and plans a construction start in February 2009 with production expected in Q4, 2010.
seeclear
16 years ago
Adanac Molybdenum Corp.: Management Reorganization
Date : 07/14/2008 @ 1:03PM
Source : MarketWire
Stock : Adanac Molybdenum Corporation (AUA)
Quote : 0.39 0.0 (0.00%) @ 3:35PM
Adanac Molybdenum Corp.: Management Reorganization
VANCOUVER, BRITISH COLUMBIA (TSX: AUA)(PINK SHEETS: AUAYF)(FRANKFURT: A9N) ("the Company") is pleased to report that Mr. Paul F. Nelson, C.A., has been appointed to the position of President and CEO of the Company. Mr. Nelson, who has been a director of the Company since 2006, is a Chartered Accountant with extensive senior experience in the areas of corporate finance, strategic planning, controllership, treasury and restructuring. For over 20 years Mr. Nelson held a number of senior positions in finance at Telus Corporation and since 2001 has been engaged in consulting in corporate finance issues.
Dr. David Stone (President, Chief Executive Officer and Director) is leaving to pursue other interests. The Board would like to thank Dr. Stone for his services as director and interim CEO and wishes him well in his future endeavours.
Adanac is pleased to announce the engagement of Mr. Peter R. Jones, P. Eng., as a consultant to the Company, to provide strategic experience in the mining industry and recently retired as Director of HudBay Minerals Inc. where he was instrumental in raising funds for the purchase of Hudson Bay Mining and Smelting Co., Limited and for HudBay's IPO and subsequently in 2006 achieved one of the highest share price and capitalization gains on the TSX. Peter has extensive project experience and mine operational experience. For the past two years he was also Chairman of the Mining Association of Canada and in 2006 was named prairie region, Entrepreneur of the Year by Ernst and Young.
The Company is pleased to announce that Mr. Dan Koyich is rejoining the Adanac Board of Directors. Mr. Koyich has been a director of public companies since 1997. He was previously a director of Adanac and is currently Vice-President Corporate Development for Adanac. Mr. Koyich has provided consulting services regarding investor relations, business administration and financing for publicly listed companies. Mr. Koyich will be a valuable addition to the board.
The Company has been conducting interviews with the assistance of C.J. Stafford and Associates to identify high quality senior management candidates to effectively move the Ruby Creek project forward through the final stages of financing and into production.
Adanac Molybdenum Corporation is engaged in the exploration and development of mines to produce molybdenum and other ferro-alloy metals. Its flagship property is the Ruby Creek molybdenum project located near Atlin, BC. The property contains an open pit reserve of 157.7 million tonnes grading 0.058% Mo using a 0.040% cut-off grade.
On Behalf of Management
ADANAC MOLYBDENUM CORPORATION
Paul Nelson, President & Chief Executive Officer
seeclear
16 years ago
Adanac Molybdenum Corp.: Drilling Encounters More Mineralization Adjacent to the Permitted Open Pit
Date : 07/10/2008 @ 6:00AM
Source : MarketWire
Stock : Adanac Molybdenum Corporation (AUA)
Quote : 0.39 0.0 (0.00%) @ 3:35PM
Adanac Molybdenum Corp.: Drilling Encounters More Mineralization Adjacent to the Permitted Open Pit
VANCOUVER, BRITISH COLUMBIA (TSX: AUA)(PINK SHEETS: AUAYF)(FRANKFURT: A9N) ("the Company") is pleased to announce updated results from its ongoing exploration program adjacent the permitted open pit on the Ruby Creek molybdenum property, located near Atlin, British Columbia.
The 2007 diamond drill program consisted of 40 NQ holes (A-07-372 to A-08-411) totaling 14,019 meters (45,982 feet) that included exploration and condemnation drilling. Of these, 30 exploration holes (A-07-372 to A-07-383 and A-08-394 to A-08-411) were drilled to test for mineralization north of the Adera fault. Another 10 condemnation holes (A-07-384 to A-08-393) were located at the Company's mill-site and tailings impoundment area to confirm the absence of significant mineralization. Drill hole map is available at the company website at www.adanacmoly.com.
The exploration drilling was used to test an initial strike length of over 400 meters and identified a continuous zone of mineralization within a 250 meter-wide drop block between the Adera fault and a sub parallel structure named the Molly Lake fault. This zone is outside, but adjacent to, the currently permitted open pit. This new zone extends to the northeast and is open to the southwest and to depth.
The eight holes listed below were drilled from pads arranged in two fences across the slope of the hill north of the Adera fault. In most cases, two holes were drilled from each pad; one vertical and one at a moderate angle to the northwest. Three drill-holes (A-07-372 to A-07-374) were described in a previous news release dated September 13, 2007.
--------------------------------------------------------------------------
Drill Hole # Azimuth Dip Depth (m) From (m) To (m) Length (m) %Mo
--------------------------------------------------------------------------
A-07-375 30 -65 529.44 276.14 364.54 88.4 0.039--------------------------------------------------------------------------
A-07-376 330 -60 529.74 133.5 352.96 219.46 0.062
includes 203.61 261.52 57.91 0.09
215.8 218.85 3.05 0.294
398.68 450.49 51.81 0.068
410.87 413.92 3.05 0.297--------------------------------------------------------------------------
A-07-378 0 0 399.29 108.2 111.25 3.05 0.274
281.94 284.99 3.05 0.472
312.42 367.28 54.86 0.057
includes 330.71 333.76 3.05 0.218--------------------------------------------------------------------------
A-07-379 0 0 416.66 66.14 99.67 33.53 0.064
includes 87.48 90.53 3.05 0.239--------------------------------------------------------------------------
A-07-380 330 -60 343.2 56.69 99.36 42.67 0.15
includes 84.12 87.17 3.05 0.689
87.17 90.22 3.05 0.977
175.56 343.2 167.64 0.062
includes 212.14 215.19 3.05 0.251
294.44 297.49 3.05 0.65
334.06 377.11 3.05 0.341--------------------------------------------------------------------------
A-07-381 330 -50 364.24 77.72 80.77 3.05 0.313
242.32 364.24 121.92 0.107
includes 242.32 245.37 3.05 0.329
312.42 315.47 3.05 0.366
315.47 318.52 3.05 0.267
333.75 336.8 3.05 0.275
348.99 352.04 3.05 1.036--------------------------------------------------------------------------
A-07-382 0 0 395.63 81.69 157.89 76.2 0.11
99.97 103.02 3.05 0.856
103.02 106.07 3.05 0.51
142.34 145.39 3.05 0.479--------------------------------------------------------------------------
A-07-383 0 0 74.07 47.24 74.07 26.83 0.146
includes 53.34 56.39 3.05 0.728--------------------------------------------------------------------------
(This is a stockwork Deposit and true widths are unknown at this time)
The Company is waiting for assays for a further eighteen holes and results will be released as they come available. Core assays are being carried out by Acme Analytical Laboratories Ltd. of Vancouver, BC.
A systematic program of condemnation drilling throughout the proposed mill-site and tailings impoundment area started in November and was completed over the winter. The drill holes show that the rocks underlying the area are essentially barren. It would appear the infrastructure will not impinge on any significant mineralization. The assays have not been released, but a report has been filed with the British Columbia Ministry of Energy, Mines and Petroleum Resources.
The drilling is contracted to Foraco Drilling Ltd. of Kamloops, B.C. and exploration is continuing. Adanac expects to complete an updated resource estimate sometime after the completion of the current drill program.
Adanac Molybdenum Corporation is engaged in the exploration and development of mines to produce molybdenum and other ferro-alloy metals. Its flagship property is the Ruby Creek molybdenum project located near Atlin, B.C. The property contains an open pit proven+probable reserve of 157.7 million tonnes grading 0.058% Mo using a 0.040% Mo cut-off grade.
This news release was reviewed by Dr. Robert Pinsent, Ph.D., P.Geo., a qualified person recognized under National Instrument 43-101.
On Behalf of Management
ADANAC MOLYBDENUM CORPORATION
David Stone, President & Chief Executive Officer
Golden Cross
16 years ago
CPM says global molybdenum supply deficits will grow in 2009 and 2010
In its latest molybdenum market study, CPM says tight credit market s and other developments have caused molybdenum’s forward supply curve to shift over the past year.
Author: Dorothy Kosich
Posted: Thursday , 10 Jul 2008
RENO, NV -
Commodities research firm CPM Group says financing for molybdenum mining projects "has become an uphill battle for some of the new primary and by-product producers."
Meanwhile, the delays in bring new primary moly or copper/moly mining projects on line have exacerbated the moly supply deficits forecast for 2009 and 2010, according to CPM's study, The Sustainability of Recent Molybdenum Prices, 2008.
The report asserts that supply deficits are expected to be larger over the next two years, followed by slightly larger surpluses from 2011 through 2014.
Meanwhile, CPM says the price outlook for molybdenum going forward "has become moderately more bullish than previously projected. The upward revision in the expected prices for molybdenum is partially supported by climbing capital expenditures, the sharp increase in diesel prices, higher electricity prices in China, and loftier freight charges."
"These higher production costs-combined with robust demand in the energy industry, narrow inventory levels, and expectations that molybdenum supplies will not exceed demand on a sustained basis are expected to boost the floor prices of molybdenum," according to a news release issued by CPM Wednesday.
"The deeper deficit in 2008 and 2010 should help underpin molybdenum prices at higher levels over that period. However, prices are expected to decline in 2011 as the market transitions back into a surplus," the news release said. "Demand for molybdenum, during the recovery in global economic growth, may be amplified by molybdenum's price correction. "
In the release, CPM noted that moly demand has increased at a "robust rate" over the past five years.
"Demand is not only growing in the principal end uses of molybdenum, but in newer industries that are seeking to utilize molybdenum's significant alloying properties," according to CPM.
Although Mineweb requested a copy of the full study, CPM is not distributing the report to members of the news media due to proprietary and confidentiality reasons. For further information about purchasing a copy of the report, go to www.cpmgroup.com
seeclear
17 years ago
And the 'Beat goes On'
Molybdenum’s diversity keeps demand firm
http://metalsplace.com/news/?a=12761
James Finch submits: If one believes the forecasts recently made by Terry Adams of UK-based Adams Metals and the Albemarle Corporation (ALB), then the escalating demand for molybdenum products could impact the stainless steel business of POSCO (PKX). The Korean-based steelmaker, with about 6.5 percent of sales coming from stainless steel, is the world’s fourth or fifth largest, depending upon production or market capitalization.
According to the company’s 2006 annual report, POSCO exports more than 70 percent of its steel products across Asia, mainly to China, Japan and southeastern Asia. In response to record high nickel prices, the steelmaker announced it would begin manufacturing nickel-free stainless steels. So did European steelmakers ThyssenKrupp and Outokumpu, which has heavily relied on its austenitic products.
Would a sustained rally in the moly price result in the same backlash nickel recently suffered? Unfortunately for steelmakers, molybdenum has a broader range of applications than nickel.
At a recent industry conference, Terry Adams shocked his audience by warning of potential supply/demand imbalances commencing as early as 2011. He believes by 2015, the molybdenum price could get ‘interesting.’
But, this wasn’t the first sign of brewing trouble for molybdenum buyers. In early May, one trader told American Metal Market magazine, “We just don’t have any supply available.” He lamented that primary moly producers, also known as swing producers, have ‘nothing to sell right now.’
On June 18th, China is expected to announce the export quotas for molybdenum products it has assigned to a limited number of exporters. Potential labor disputes at copper mines in Mexico and Chile could further reduce available molybdenum supply later in June. A Chilean labor spokesman warned of a ‘hard and prolonged strike.’ Molybdenum mined as a byproduct of copper production accounts for about 60 percent of the global supply.
At this pace, molybdenum pricing could be severely impacted as early as this summer. By next year, if primary molybdenum production doesn’t quickly rise to meet the demand, the pricing climate could worsen for end-users. Some traders believe moly prices could soon creep above previous price peaks two years ago. “Things are going to get a lot firmer because there’s a lack of material,” one trader reported earlier this week. “There’s not a lot on the ground.”
According to different down-the-road forecasts, the magic demand number is 460 million pounds of molybdenum. Adams predicts that projected western world demand could reach this consumption by 2015. Others believe strong moly demand could bring this target consumption a few years earlier.
Another concern is one we highlighted in a previous article when USGS molybdenum commodity specialist Michael Magyar warned of a bottleneck, “… we can’t roast much more moly right now. No one is actively permitting for more roasting capacity in North America.
Additional roasting capacity is, however, coming online this year or next, courtesy of Molymet. Adams points out, “With the growth in demand a new roaster, the size of the new Molymet roaster is needed every two years.” Adams further explained, “Without further investment a roaster bottleneck could occur in 2011. Molymet plans another roaster about this time, but this would only allow another two years growth.”
In his presentation, Adams glimpsed in the future. While western world demand should continue to annually increase by three percent, demand in China and the C.I.S. could increase by more than 10 percent every year. “The combined global effect would be an annual growth rate of about 4.5 percent,” he predicted. “Western mines will have to increase production !
by at least 6 percent per annum.”
As we and others have concluded, Adams forecast, “Increased output at primary (moly) mines will be needed to fill the gap beyond 2009.”
We presume delegates from the junior molybdenum mining attendees mentally began popping champagne corks after Adams announced this point. But it was his next two points which investors should digest:
• New or shuttered primary mines will have to open by 2011
• By 2013, current primary mines and Climax could be at capacity
High-Level Growth in the Molybdenum Chemical Market
Having researched molybdenum for more than one year, only recently did a couple of technical experts help us understand how much molybdenum is utilized in the condenser tubes of nuclear and desalination plants. Because of the diversified applications for this metal, there is less reliable information about the molybdenum sector than in others we’ve explored, e.g. uranium.
We continue to gather data for our next publication, Investing in the Great Molybdenum Bull Market, and will present our detailed research in late August.
We have discovered two strong-growth areas for molybdenum applications.
It’s not just the steel market which uses molybdenum. Although the stainless and low alloy markets represent about two-thirds of molybdenum usage, the fastest growing market appears to be catalysts in the moly chemical market.
According to a spokesman for the Albemarle Corporation, moly consumption in the catalyst section could grow by more than 30 percent by 2011. The chemical sector could consume as much as 30 million more pounds in the 2006 to 2011 time period.
The global catalyst market is expected to reach US$13 billion in sales this year. Of this the petroleum refining sector should consume about 35 million pounds of molybdenum. The moly is used as a hydroprocessing [HPC] catalyst.
Growing global demand for crude oil, changing fuel specifications and strength in demand for aviation and diesel fuel should contribute to molybdenum demand.
Because the overall quality of crude oil has significantly deteriorated, over the past 25 years, more molybdenum could be consumed as a catalyst during the refinery process. Sulfur content in U.S.-imported oil has doubled over this same time period. Molybdenum-based catalysts are utilized to remove sulfur from petroleum, petrochemicals and coal-derived liquids.
Tighter specs over the past 15 years have demanded a higher performing catalyst and more contained molybdenum in those catalysts. Over this time frame, catalyst demand per barrel of crude oil has doubled – an average growth rate of five percent per year.
One industry expert expects global HPC catalyst growth to annually increase by eight percent between 2006 and 2010. Molybdenum consumption for this use could increase by 46 percent through 2010. Annual consumption could rise to more than 60 million pounds of molybdenum.
Lack of New Primary Mining Supply
The typical molybdenum concentrates being sold by the copper producers, as byproduct mining, contain 40 – 45 percent Mo. Concentrates from primary producers often average 50 – 55 percent.
As a result, primary molybdenum mining operations offer a more desirable concentrate. Technical moly, also known Mo03 (molybdenum trioxide) specifies 57 percent Mo and contains less than 0.05 percent copper and 0.1 percent sulfur. Primary molybdenum producers provide concentrates with lesser amounts of deleterious elements.
Because the concentrate is ‘cleaner,’ less roasting is required to upgrade the material to tech oxide spec. Less electricity is expended to power the multi-hearth furnaces during the roasting process. The cleaner primary moly concentrate offers the roaster more flexibility. The higher spec concentrates can be blended with lower spec concentrates to upgrade the overall product, or the roaster can refine the higher spec material separately if the end-user requires it.
The less roasting to bring material up to spec could also help avoid the bottlenecks a few years from now.
Although byproduct molybdenum producers are expected to bear the brunt of increased demand, the copper producers aren’t cooperating. Codelco’s molybdenum production dropped by 25 percent in 2006 to 60 million pounds this past year. Moly production could drop another 15 percent or more this year.
Because of the recent molybdenum price revival, dozens of exploration companies have ‘suddenly’ become molybdenum companies. There are scarce few with a potentially viable project.
Those primary molybdenum producers and future producers we’ve been monitoring appear to be moving their projects forward.
Thompson Creek is Thompson Creek. This has emerged as the ‘primary’ primary player in North America while the world waits for Climax to come online again. Some believe the company’s Davidson moly deposit in British Columbia may not arrive on the company’s timetable. If so, then this could further pressure the moly price.
Roca Mines (ROCAF.PK) should become a producer during July. But, this company also hopes to expand its operations deeper and should also commence those exploration efforts this summer. In the interim, the high-grade molybdenum found at the company’s MAX mine should become a cash cow in the third and fourth quarters of this year. And for several years forward. Although the company is not yet in production, there appears to be no scarcity of molybdenum traders clamoring for the company’s future production. Another indication of a tight market.
Last month, Adanac Molybdenum Corp (AUAYF.PK) ordered its long-lead time equipment for the construction of its mining and milling complex at Ruby Creek. Expenditures totaled nearly C$40 million, for which the company has made its down payments. Also, some time this summer, Adanac should finally receive its permits and commence construction. While the company boasts of 220 million pounds of molybdenum, a recent chat with Adanac consultant Ken Reser suggests Ruby Creek have more pounds than was previously thought. Ongoing drilling results could later confirm this speculation.
We continue to watch United Bolero (UBDVF.PK) as a promising development company in Montana. We were told drilling at Bald Butte began over the weekend to upgrade the resource category. Hopefully, the drilling program will also move to its nearby Cannivan Gulch property. Historically, but not technically documented, major miners, who worked these properties in the previous moly cycle, estimated the company’s properties could host more than 400 million pounds of molybdenum.
Primary producers, such as these and possibly others, is what molybdenum end-users are depending upon to meet their needs as we approach 2009, 2010 and beyond.
SC.
seeclear
17 years ago
Perhaps...CHICAGO (ResourceInvestor.com) -- Shares in Adanac Moly [TSX:AUA; OTCPK:AUAYF] fell almost 13% today to a new 52-week low after the company said it had yet to secure satisfactory financing for its Ruby Creek mine development and four builders have filed liens on the project totalling about $3 million.
This recent development is just one in several setbacks that have hit Adanac since the company disclosed late January that it was essentially not immune to the systemic credit crunch.
Back in January, Adanac called its trouble securing a key $80 million bridge loan a “minor schedule disruption” and said that it would “slow down” construction activities on its massive $650 million Ruby Creek mine while it worked to secure financing continued through February. Yesterday, the company characterized the situation a bit more frankly, disclosing that the firm had be unable to date to secure the financing on satisfactory terms, and that all construction activities at the project had been suspended.
The sudden turnabout in the characterization of the “slow down” and the fact that the four builders have now filed $3 million in liens against the company didn’t inspire tremendous confidence in the project by investors, who now value Adanac’s shares at just C$0.57, about 80% less than the C$2.50-plus they traded at in July.
The costs of Ruby Creek are nothing if not massive, and given current market conditions it’s unclear when the project will get built. While the project’s base-case economics are reasonably strong, with an IRR of 18.9%, these take into account an elevated molybdenum price of $28 through 2010 and $15 through 2015.
Even if the company is able to secure the bridge loan in the near term, Adanac’s problems will unfortunately not simply disappear. The project requires $600 million in debt financing after the bridge financing has run out. Even if the bridge loan is arranged, it’s unclear if this is anywhere close to being finalized – and so investors have no certainty when the stars will align for Adanac given current market conditions.
It’s unclear how much cash Adanac has on hand to date, but the company could also be forced to freeze ongoing exploration at the Ruby Creek if funds run tight. As of the end of October 2007, the company had about C$11 million in cash. Additionally, if it receives its final construction permit shortly, the company will be required to post a $3 million bond, which would likely have the effect of restricting usage of an additional sum of cash. Finally the company cannot call on significant equity financing to help out, especially given that the C$65 million market cap company just completed a C$15 million equity deal at the end of December.
In short, without cash – and a significant improvement in the credits market soon – Ruby Creek could be dead in the water.
Given the project’s base case NPV of C$300 million, there is of course a chance that a larger, better financed firm may try to scoop up Adanac at a bargain price. While there is a shot at this happening, the mine’s construction bill is not insignificant even to a larger player – so it’s unclear who might want to take on the risk at this point. Additionally, Adanac would owe a break fee to the investment bank it’s engaged for its debt financing of up to $12 million if it is taken out – so this amount must be effectively tacked onto the purchase price.
Given the level of uncertainty that exists with the project’s development at this stage – and the level of leverage to molybdenum at the project (average costs are the $7/lb range) – it’s uncertain which firms might step up to the plate, and if Adanac’s longer-term shareholders/management would approve such a deal.
The Ruby Creek Molybdenum Deposit is a low-grade bulk type of molybdenum deposit, containing 143.7 million tonnes at 0.059% Mo proven and probable reserves and 206.4 million tonnes at 0.63% Mo measured and indicated resources.
SC.
seeclear
17 years ago
Recent Update...Not lookin' pretty... Credit Crunch Hits Molybdenum Miner
By Ben Abelson
20 Mar 2008 at 08:23 PM GMT-04:00
http://www.resourceinvestor.com/pebble.asp?relid=41363
CHICAGO (ResourceInvestor.com) -- Shares in Adanac Moly [TSX:AUA; OTCPK:AUAYF] fell almost 13% today to a new 52-week low after the company said it had yet to secure satisfactory financing for its Ruby Creek mine development and four builders have filed liens on the project totalling about $3 million.
This recent development is just one in several setbacks that have hit Adanac since the company disclosed late January that it was essentially not immune to the systemic credit crunch.
Back in January, Adanac called its trouble securing a key $80 million bridge loan a “minor schedule disruption” and said that it would “slow down” construction activities on its massive $650 million Ruby Creek mine while it worked to secure financing continued through February. Yesterday, the company characterized the situation a bit more frankly, disclosing that the firm had be unable to date to secure the financing on satisfactory terms, and that all construction activities at the project had been suspended.
The sudden turnabout in the characterization of the “slow down” and the fact that the four builders have now filed $3 million in liens against the company didn’t inspire tremendous confidence in the project by investors, who now value Adanac’s shares at just C$0.57, about 80% less than the C$2.50-plus they traded at in July.
The costs of Ruby Creek are nothing if not massive, and given current market conditions it’s unclear when the project will get built. While the project’s base-case economics are reasonably strong, with an IRR of 18.9%, these take into account an elevated molybdenum price of $28 through 2010 and $15 through 2015.
Even if the company is able to secure the bridge loan in the near term, Adanac’s problems will unfortunately not simply disappear. The project requires $600 million in debt financing after the bridge financing has run out. Even if the bridge loan is arranged, it’s unclear if this is anywhere close to being finalized – and so investors have no certainty when the stars will align for Adanac given current market conditions.
It’s unclear how much cash Adanac has on hand to date, but the company could also be forced to freeze ongoing exploration at the Ruby Creek if funds run tight. As of the end of October 2007, the company had about C$11 million in cash. Additionally, if it receives its final construction permit shortly, the company will be required to post a $3 million bond, which would likely have the effect of restricting usage of an additional sum of cash. Finally the company cannot call on significant equity financing to help out, especially given that the C$65 million market cap company just completed a C$15 million equity deal at the end of December.
In short, without cash – and a significant improvement in the credits market soon – Ruby Creek could be dead in the water.
Given the project’s base case NPV of C$300 million, there is of course a chance that a larger, better financed firm may try to scoop up Adanac at a bargain price. While there is a shot at this happening, the mine’s construction bill is not insignificant even to a larger player – so it’s unclear who might want to take on the risk at this point. Additionally, Adanac would owe a break fee to the investment bank it’s engaged for its debt financing of up to $12 million if it is taken out – so this amount must be effectively tacked onto the purchase price.
Given the level of uncertainty that exists with the project’s development at this stage – and the level of leverage to molybdenum at the project (average costs are the $7/lb range) – it’s uncertain which firms might step up to the plate, and if Adanac’s longer-term shareholders/management would approve such a deal.
The Ruby Creek Molybdenum Deposit is a low-grade bulk type of molybdenum deposit, containing 143.7 million tonnes at 0.059% Mo proven and probable reserves and 206.4 million tonnes at 0.63% Mo measured and indicated resources.
SC.
seeclear
17 years ago
Update...OTTAWA — Investors are taking a shine to a rare, silvery-white metal called molybdenum, but the durability of a market rally may hinge on looming export controls from China.
A surge in prices could benefit producers and the Toronto Stock Exchange, home to the world's largest publicly traded, pure-play molybdenum producer, Blue Pearl Mining, and a host of explorers.
Stocks related to the base metal, valued for its anti-corrosive and strengthening properties, have been soaring for weeks, underpinned by sturdy prices and buzz about a new fund that will invest in molybdenum and the companies that produce it.
The recent strength of molybdenum mining operations —- such as this U.S. one in Montana -- could be affected by impending export controls from China.
The recent strength of molybdenum mining operations —- such as this U.S. one in Montana -- could be affected by impending export controls from China.
Now, anticipation is building for news on a quota system from China, which could soon release a list of the molybdenum producers it will allow to export. Fewer than 30 names are expected, a Chinese industry group said, and exports could fall by 10%.
"It comes down to the Chinese," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier. "They could make or break the market."
About 400 million pounds of molybdenum were produced last year, with tight supplies making the market sensitive to supply disruptions and contributing to price pressures.
China is a major supplier of the metal, used primarily as a hardening agent in the production of stainless steel. It contributed about 17% of the world supply in 2006 and topped the world in reserves, UBS said in a report.
Other key suppliers are the United States and South America, where molybdenum is a byproduct of copper mining.
The tough-to-pronounce metal moved into the mainstream amid a meteoric rise for shares in Toronto-based Blue Pearl.
Producers of the extremely hard metal make up only a small portion of the TSX materials sector, which is down about 1.4% over the past month. In contrast, Toronto-based Blue Pearl has climbed 37%.
Other producers and developers of what is being called a new mining "mega-star" have seen similar gains.
Moly Mines Ltd., which has an Australian project that could contribute 20 million pounds annually in 2008-2009, has seen its stock surge more than 125% over the month.
Strapping stock jumps have also touched miners close to production. Roca Mines shares popped 100% this month and Adanac Molybdenum Corp. is up 74%.
Interest in molybdenum is also being piqued by resource guru Eric Sprott's planned Sprott Molybdenum Participation Corp. The fund, preparing for an IPO, will invest in miners and up to 50% of its capital directly in molybdenum.
Two weeks ago, tight supplies and uncertainty over China lifted molybdenum prices to 16-month highs of $79 a kilogram. Since then, it has slipped to about $75 per kilogram, 25% above the start of the year.
Investor interest has sparked an exploration revival among juniors and has senior miners revisiting old plans.
"You're seeing lots of companies coming out of the woodwork with historical molybdenum deposits that they're starting to promote," said Wellington West mining analyst Greg Huffman.
Still, he doesn't expect much new production over the next two years, though new deposits could be developed by 2010, or 2011, depending on prices.
Ten companies produce about 66% of global output, UBS said. Leaders Codelco of Chile and U.S.-based Phelps Dodge, recently acquired by Freeport-McMoRan, account for 33%. Other notable producers include Blue Pearl, Rio Tinto, Grupo Mexico, Jinduichenge and Antofagasta.
Trading firm Shangxiang Minmetals predicted in late 2006 that the world molybdenum market will move from deficit to balance in 2007 with supply estimated at 445 million to 450 million pounds and demand at 445 million pounds.
Some analysts see it differently. "Commodities are here to stay for a while. [I see] sustainability for quite some time," said Nakamoto
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seeclear
17 years ago
Update...AUA...VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 19, 2008) - Adanac Molybdenum Corporation (TSX: AUA.TO)(PINK SHEETS: AUAYF.PK)(FRANKFURT:A9N) -
On January 28, 2008 Michael MacLeod, Chief Executive Officer of the Company, announced that the Company has temporarily suspended its field construction activities at its Ruby Creek Project (the "Project") near Atlin, British Columbia, pending the putting into place of a bridge financing (the "financing") which is being negotiated by its financial agents. The Company's US financial agents have been working diligently on securing up to $80 million in bridge financing which forms part of the $650 million capital expenditures to fund the 23,000 TPD mine and mill construction at Ruby Creek. The US agents have received a term sheet from an interested major institution but the terms are not in line with Adanac's ability to move the project forward on its existing obligations. The US agent is attempting to restructure the terms on a more positive basis while continuing discussions with other interested parties. Adanac has positioned itself to be one of the few mining projects capable of proceeding to production over the next eighteen months. The Company has received notice that four of its suppliers have filed builders' liens on the Project totaling approximately $3,000,000. These claims are not in dispute and will be paid by the Company in the ordinary course of business from its expected financing.
Adanac's salient features are:
- Long lead items have been ordered and are scheduled to be delivered throughout 2008 and early 2009 (If ordered today, lead times for several of the items have increased to between 36 and 48 months).
- Updated technical report has been completed (see news release dated December 6, 2007) and confirms positive economics of the Ruby Creek Project. The Ruby Creek Project is projected at 23,000 TPD for a 21 year mine life with pay back from the 5 year high grade starter pit in 3.2 years.
- Detailed engineering by Amec PLC is about 60% complete.
- Adanac received its permit approving its pre-construction work program at Ruby Creek on December 24, 2007. The permit to construct is imminent and requires a $3 million bond.
- Adanac is currently working with the responsible agencies to complete the Federal comprehensive review by the 4th quarter 2008.
- Adanac received its Environmental Assessment Certificate from the British Columbia Government on September 10, 2007. A major milestone for the Company.
- Exploration diamond drilling outside the pit area to the north, south and west has identified significant molybdenum mineralization up to 256 meters grading .08% Mo in the north wall of the pit. Once resources are established on these mineralized areas years could be added to the life of the mine.
- The Company continues to negotiate an Impact Benefits Agreement with the Taku-River Tlingit whom have been very supportive of the Ruby Creek Project.
- Supply and demand factors continue to influence the price of molybdenum positively as the price per pound of molybdenum remains in the $33 to $34 per pound range.
The capital markets have been undergoing significant turbulence and uncertainty. The resulting instability in the financial markets has made it much more difficult to obtain financing for major projects. Although the backlash has been disruptive, projects like Ruby Creek are gaining significant attention as a result of the advanced state of the project.
On Behalf of Management
ADANAC MOLYBDENUM CORPORATION
Michael MacLeod, President & Chief Executive Officer
Visit our website to watch Larry Reaugh, Executive Chairman of Adanac Molybdenum Corporation interview with SmartStox Online TV Talk Show. www.smartstox.com/interviews/aua.php
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