Moly Mines boosts Spinifex Ridge resource (April 14, 2008)

VANCOUVER–Moly Mines (MOL-T, MOL-A) has announced a resource increase of more than 100% at its Spinifex Ridge molybdenum-copper project, located in the Pilbara region of Western Australia.

Measured and indicated resources stand at 658 million tonnes grading 0.045% molybdenum, 0.08% copper and 1.3 grams silver per tonne using a 0.02% molybdenum cutoff grade. The project also hosts inferred resources of 390 million tonnes at 0.04% molybdenum, 0.07% copper and 1.2 grams silver per tonne.

Moly Mines attributes the resource boost to expansion of the mineralized zone by stepout drilling and a drop in the cutoff grade from 0.03% to 0.02% molybdenum, aided by positive price forecasts for the metal. Molybdenum grades dropped roughly 25%, with the additional tonnage mostly coming from the lower-grade halo around the periphery of the Spinifex Ridge deposit.

The company says it is revising mine plans based on the larger resource, which it expects will boost reserves and extend the mine life beyond 20 years. It is also finalizing energy procurement arrangements and is in the final stages of environmental permitting — both anticipated to wrap up by mid-year.

Late last year, Moly Mines began scoping studies on a potential 50% expansion of the proposed mining rate to the 25-million-tonne-per-year level to capitalize on a strong market outlook for molybdenum.

The company began spinning out its non-core assets last year, including its gold projects in New South Wales, Australia, to Cortona Resources (CRC-A). Moly Mines received A$5 million in cash and 12 million Cortona shares to become a major shareholder in the Aussie junior.

Shares of Moly Mines have recently slumped to a more than one-year low at around $1.70.