Adanac extends hunt for moly (September 13, 2004)

Vancouver — Buoyant molybdenum prices have spurred Adanac Gold (AUA-V) to expand its drill program on the Ruby Creek project, northeast of Atlin in northern British Columbia.

Adanac has been exploring the project since mid-2001, and activity has intensified as a result of the high moly prices. The price of molybdenum oxide has surged to the present US$18 per lb. from US$2.40 in early 2002.

The company is considering expanding drilling south and west, across the Adera fault, where a previous hole encountered significant moly mineralization.

Drill hole 9, which encountered significant mineralization through the fault zone, is 300 metres northeast of a hole sunk in 1973-74 by a previous explorer. That hole intersected 452 metres (from 60 metres) grading 0.132 MoS2 (0.079% Mo).

Adanac is drilling holes 19 and 20. About 18 holes (4,500 metres) have been completed so far.

Earlier this year, the company commissioned AMEC to conduct a prefeasibility study.

Ruby Creek has a historic resource estimate (not compliant with National Instrument 43-101) of 152 million tonnes grading 0.063% moly.

In 1970, then-owner Kerr Addison Mines (now part of Noranda) carried out underground bulk sampling and a pilot milling operation en route to a feasibility study outlining a proposed open pit operation. Climax Molybdenum worked the property from 1972 to 1975.

In 1978, Placer Development, a predecessor to Placer Dome, optioned the ground from owner Adanac Mining & Exploration and completed a preliminary economic evaluation. Through to 1981, Placer submitted development studies and proposals to the provincial government to advance the project toward development. However, in 1982 the claims were allowed to lapse.

The recent surge in moly prices is attributed to supply shortages and soaring demand in China, one of the world’s top producers of the metal. Molybdenum is primarily used in the steel industry as a hardening alloy. Much of the moly produced as byproduct from copper production has been affected by the shut-downs and closures of major copper mines over the last few years. The shift toward lower-cost solvent extraction-electrowinning has also had an impact on moly production, as the byproduct metal is not recovered through the process.

Adanac has 22.2 million shares outstanding and has recently traded in the rabge if 65-70.