NMC doubles resource at moly mine

South Korea-focused NMC Resource (NRC-V) has substantially increased contained resources at its high-grade Moland molybdenum mine.

The underground mine is estimated to contain 1.67 million indicated tonnes grading 0.35% molybdenum disulphide, plus 2.09 million inferred tonnes grading 0.32% molybdenum disulphide.

The update more than doubles the 2009 estimate of 1.7 million inferred tonnes grading 0.36% molybdenum disulphide, despite increasing the cut-off grade from 0.1% to 0.14%.

The company added tonnes to the resource after drilling 88 holes and incorporating deeper sections of the mine while it works to extend mineralization.

NMC, a subsidiary of publicly traded South Korean company Dong Won, started production at the mine in April 2010. This third quarter the company produced 202.3 tonnes of molybdenum concentrate from a head grade of 0.31% molybdenum disulphide. With sales of 207,000 lbs. of molybdenum, the company realized revenue of US$2.8 million.

The Moland mine, located 170 km southeast of Seoul and 32 km from Pyeongchang, has been designed to minimize its impact in this populous country. To reduce noise and dust, the company installed the main crushing circuit underground. Putting the crusher in the mine also means it can transport ore to surface on a conveyor. Tailings are trucked to a nearby cement plant to be used as raw material, eliminating the need for a tailings pond.

The Moland property is made up of three claims totalling 8.2 sq. km. In addition, it purchased 6.2 hectares of land to act as a buffer between the mine property and surrounding agricultural land. Molybdenum mineralization has been known to exist on the property since 1966, and the first two adits were driven in 1973. Production from these two adits occurred in the late 1970s and early 1980s, and amounted to 1,688 tonnes of molybdenum disulphide.

Moland contains a molybdenum-bearing skarn zone hosted in Ordovician carbonate sediments. The skarn is 800 metres long with molybdenite occurring in fracture zones and in disseminated form.

The mine runs 12 hours a day and the company has not entered into long-term offtake agreements, biding its time until molybdenum prices recover. Molybdenum is selling for US$12.80 per lb. after trading at over US$17.50 per lb. last year. In late 2008, the price plunged from a high of about US$35 per lb.

Dong Won controls 64% of NMC’s 45.6 million fully diluted shares and KTB controls another 22%, leaving only 4.5 million issued shares in the public float.

NMC also controls the historic Boss Mountain molybdenum mine in central B.C. 85 km east of Williams Lake. Noranda operated the mine from the 1960s to 1983, when it closed the mine admist low metal prices.

On news of the resource NMC’s share price climbed 7¢, or 11.7%, to 67¢ on 13,000 shares traded. The company has a 52-week share price range between 40¢ and $1.25.