Georgia soars on Mexican moly plans (April 16, 2007)

Vancouver — News of Georgia Ventures’ (GVI-V, GGVTF-O) plans to acquire the Creston molybdenum deposit in Sonora state, Mexico, sent the junior’s stock soaring recently, as much as 200% on strong trading.

The letter of intent sees Georgia Ventures shelling out US$20 million in cash, issuing US$10 million worth of units (one share plus a half-warrant) and 600,000 stock options to shareholders of private company Creston Mining, which holds the deposit through a Mexican subsidiary.

A March 2007 report estimated an indicated resource at the Creston deposit at 92.9 million tonnes grading 0.083% molybdenum and 0.06% copper, about 170 million lbs. contained molybdenum and 123 million lbs. contained copper, using a 0.035% molybdenum cutoff grade. Additional inferred resources were calculated at 84.2 million tonnes at 0.076% molybdenum and 0.05% copper.

The engineering study factored a low strip ratio (1:1) on an open-pit model and used a US$6.50-per-lb. molybdenum price, operating costs of about US$4.25 per tonne and estimated process recoveries of 87%.

Once the deal is completed, Georgia plans a 10,000-metre drill program aimed at upgrading the inferred resources.

Past work on the project included a late-1970s drilling program by Industrias Peoles (IPOAF-O) and Amax, now part of Freeport-McMoRan Copper & Gold (FCX-N), that led to completion of a prefeasibility study and development of a pair of horizontal adits to test grade continuity and collect metallurgical samples.

Molybdenum and copper mineralization at Creston occurs primarily as disseminations within a quartz monzonite porphyry intruding an igneous-metamorphic complex.

With its price recently rising above US$30 per lb., molybdenum has emerged as a metal that is in vogue with a number of explorers.

Additionally, with a $75-million initial public offering under way, the upcoming launch of the Sprott Molybdenum Participation fund plans to invest in a portfolio of molybdenum producers and explorers, and buy physical metal.