Creston updates moly resource

Vancouver With eyes on declining production of molybdenum from traditional sources such as low-grade copper mines, Creston Moly (CMS-V) is betting on a future for primary-moly deposits.

As a sign of confidence in that future Creston has updated the historic resource estimate for its Creston Molybdenum property, 135 kilometers northeast of the city of Hermosillo in Sonora State, Mexico.

With 116 holes under its belt Creston pegs the resource at 176.9 million measured and indicated tonnes grading 0.071% moly and 0.046% copper.

Of the main resource Creston has outlined a higher-grade, near-surface measured and indicated resource: 19 million tonnes grading 0.098% moly.

Creston president and CEO Jonathan George said in a statement that the near-surface resource might make an attractive target for initial operations.

With a resource estimate in hand Creston says it is working on a prefeasibility study.

The Creston property is a boot shaped mineralized area roughly 400-metres wide and 800-metres long.

Mineralization is primarily disseminated through quartz stockworks and strong phyllically altered breccia matrices within porphyritic quartz monzonite stock. Typical minerals are pyrite, molybdenite, subordinate chalcocite and chalcopyrite.

Before Creston picked it up in 2007 the property had a number of other suitors, AMAX (now part of Freeport-McMoRan Copper & Gold (FCX-N)) chief among them. AMAX was active at the property first in 1950s and then again in a joint venture with Industrias Penoles (IPOAF-O, PENOLES-M). By the end of the 1970s AMAX had defined a resource estimate of 96 million tonnes grading 0.097% moly.

But with moly prices in the doldrums during the 1980s, AMAX put the property on care and maintenance and eventually dropped its rights to the property entirely. Little work had been done until Creston decided to re-drill the project in 2007.

The company’s moly-bullishness stems from what it says is a 10% shortfall in moly production globally, a number that it says grows by 4% each year.

Creston also calls Asian smelters “desperate” for secured supplies of concentrate and argues that the record high prices result from and molybdenum’s popularity in industrial processes and those shortfalls.

On news of the resource estimate Creston’s share price remained unchanged at 18. It has about 121 million shares issued and a 52-week trading range between 16 and 58.