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Top Articles - New Molybdenum Mine Hopes to Open in 2009 in the Yukon
The high price of molybdenum may finally take the Ruby Creek molybdenum deposit the final steps on its way to becoming a mine. By then, it will have been about 40 years since it was first discovered, and another 30 years since it was nearly ready to become a mine.
But, it may be more than the high price of molybdenum which could officially make Ruby Creek one of Canada’s newest molybdenum mines. Perseverance by Larry Reaugh, executive chairman of the Adanac Molybdenum Corporation, who with a bit of luck and 44 years in the mining e
But, it may be more than the high price of molybdenum which could officially make Ruby Creek one of Canada’s newest molybdenum mines. Perseverance by Larry Reaugh, executive chairman of the Adanac Molybdenum Corporation, who with a bit of luck and 44 years in the mining e
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
xperience – not to mention of few mines he’s brought home, all add up to what it takes, these days, in pushing a project through to completion.
We talked to Larry Reaugh over three telephone interviews to find out how he got this far and what steps he needs to take to bring the Yukon’s Ruby Creek to her final destination: a moly mine producing some 14 million pounds of molybdenum every year.
Project Summary
The Ruby Creek Molybdenum Deposit is a low-grade bulk type of molybdenum deposit located, at the headwaters of Ruby Creek in
We talked to Larry Reaugh over three telephone interviews to find out how he got this far and what steps he needs to take to bring the Yukon’s Ruby Creek to her final destination: a moly mine producing some 14 million pounds of molybdenum every year.
Project Summary
The Ruby Creek Molybdenum Deposit is a low-grade bulk type of molybdenum deposit located, at the headwaters of Ruby Creek in
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
the floor of an alpine cirque. It is located about 22 kilometers northeast of Atlin, British Columbia; 124 kilometers southeast of Whitehorse, Yukon Territory in the extreme north western corner of British, Columbia, Canada.
StockInterview: What’s the background on the Ruby Creek property?
Larry Reaugh: Kerr Addison, a subsidiary of the Noranda Corporation, took the property on so they could earn a 60-percent interest for bringing it into production. They had to contend with the 3.5-percent NSR, but they were also trying to do th
StockInterview: What’s the background on the Ruby Creek property?
Larry Reaugh: Kerr Addison, a subsidiary of the Noranda Corporation, took the property on so they could earn a 60-percent interest for bringing it into production. They had to contend with the 3.5-percent NSR, but they were also trying to do th
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
is when molybdenum was selling at $1.80/pound. Eventually, they dropped the property. Placer had a base metals business as well as gold mining. They took this to a stage two feasibility whereby they were in the permit stage. Molybdenum slipped back to $6/pound. Placer put it on the shelf and eventually went out of the base metals business. We restaked the property and expanded the ground.
StockInterview: Is it realistic that you can raise C$450 million and bring the Ruby Creek molybdenum project into production?
Larry Reaugh: The
StockInterview: Is it realistic that you can raise C$450 million and bring the Ruby Creek molybdenum project into production?
Larry Reaugh: The
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
ankable feasibility is saying it should go into production. The payback would be three years, based upon a sliding scale of molybdenum from US$22 dropping to $15 over the first five years. We feel that’s conservative. We have a much stronger outlook on molybdenum, and this outlook has been really reinforced in recent years. A 20-percent increase in reserves and grades would reflect in the payoff period, bringing it down to twenty months.
StockInterview: Let’s set the record straight now. How big is the Ruby Creek deposit, how much
StockInterview: Let’s set the record straight now. How big is the Ruby Creek deposit, how much
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
is it worth and does your deposit pass muster with the U.S. Securities and Exchange (SEC) definition of reserves?
Larry Reaugh: The bankable feasibility gives us reserves. It is a reserve. It’s passed muster. I can actually tell you it’s worth US$4.2 billion and, with a possible 20-percent increase in grade, it could be worth over US$5 billion. With this increase in grade, costs could drop to US$4.70/pound. There are 167 million pounds, of which at least 100 million more are under measured and indicated.
StockInterview: Tell us ab
Larry Reaugh: The bankable feasibility gives us reserves. It is a reserve. It’s passed muster. I can actually tell you it’s worth US$4.2 billion and, with a possible 20-percent increase in grade, it could be worth over US$5 billion. With this increase in grade, costs could drop to US$4.70/pound. There are 167 million pounds, of which at least 100 million more are under measured and indicated.
StockInterview: Tell us ab
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
out your recent drilling and why you are excited about this.
Larry Reaugh: Recent drilling is telling us there actually another deposit west. First off, we needed the sample to get a molybdenum concentrate to go to other companies that are off-taking our material. They have to know the specs, and we had to produce a concentrate. We had to drill for it, send down a ton of core and run it through the laboratory, G&T Metallurgical Services (Kamloops, British Columbia). We got a 92.5 percent recovery doing that, which is 3.5 percent gr
Larry Reaugh: Recent drilling is telling us there actually another deposit west. First off, we needed the sample to get a molybdenum concentrate to go to other companies that are off-taking our material. They have to know the specs, and we had to produce a concentrate. We had to drill for it, send down a ton of core and run it through the laboratory, G&T Metallurgical Services (Kamloops, British Columbia). We got a 92.5 percent recovery doing that, which is 3.5 percent gr
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
ater than the bankable feasibility at 89 percent. This is a huge plus for us – greater recovery and a coarser grind.
StockInterview: What else did you discover during the angle drilling?
Larry Reaugh: Going at an angle into the ground, drilling is not only cutting the flat line veins, it’s cutting the vertical. What we found now was that we got stock works – something like a spider web. It gives you greater continuity in the project. The greater the continuity, the greater the confidence in your ore body. Out of the 283 holes dril
StockInterview: What else did you discover during the angle drilling?
Larry Reaugh: Going at an angle into the ground, drilling is not only cutting the flat line veins, it’s cutting the vertical. What we found now was that we got stock works – something like a spider web. It gives you greater continuity in the project. The greater the continuity, the greater the confidence in your ore body. Out of the 283 holes dril
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
led in this project, 270 of them have been vertical. We weren’t getting a good picture of what the vertical veins looked like. From these 13 angle holes that we drilled, the results were a staggering 75 percent higher at 0.139 percent. Previously, we got 0.079 percent from the high grade pit area. We are looking somewhere between ten and twenty percent increase in the total reserve volume. It would mean the cost per pound of moly (being mined) dropping from $5.87 to $4.60/pound.
StockInterview: But critics point to your lack of inf
StockInterview: But critics point to your lack of inf
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
rastructure, specifically the lack of power lines. Will you be using diesel?
Larry Reaugh: It is expensive and probably adds somewhere close to $1.50 to $2/pound to our cost. That hurts, but in order to make this project happen. There’s actually power within 90 kilometers of this property, We discussed bringing it down, but power companies in Canada and especially in the Yukon have been bit before. They bring in power lines, and then the project doesn’t go ahead. The territory is stuck with the cost. So, they want to see concrete i
Larry Reaugh: It is expensive and probably adds somewhere close to $1.50 to $2/pound to our cost. That hurts, but in order to make this project happen. There’s actually power within 90 kilometers of this property, We discussed bringing it down, but power companies in Canada and especially in the Yukon have been bit before. They bring in power lines, and then the project doesn’t go ahead. The territory is stuck with the cost. So, they want to see concrete i
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
the ground. They want to see you turning the mill over. And then, they would seriously consider bringing the power down. We will be running with diesel for three or four years. Hopefully, we will be able to get the power lines permitted and have the provinces in the territory bring it down to the site. There is actually a hydroelectric dam, within a few kilometers from our site, the native group is putting in. That would allow them to expand from two megawatts to ten. They could tie it into a grid and sell it to us.
StockInterview
StockInterview
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
: What is the status of your permit?
Larry Reaugh: We are about 60 percent of the way through our permits. We are still shooting for the end of this quarter to have them. We want to be in construction in June of this year. We put together the operating team. There will be more announcements on who we’ve hired: well-known mining specialists in the industry, operators, builders and so on. We are preparing this company to hit the ground running this summer. During the peak of construction, we’ll have up to 1000 people working for us.
Larry Reaugh: We are about 60 percent of the way through our permits. We are still shooting for the end of this quarter to have them. We want to be in construction in June of this year. We put together the operating team. There will be more announcements on who we’ve hired: well-known mining specialists in the industry, operators, builders and so on. We are preparing this company to hit the ground running this summer. During the peak of construction, we’ll have up to 1000 people working for us.
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
We will have to pull from all over the province.
StockInterview: You have this much confidence in this project?
Larry Reaugh: This is a project that’s never been glamorous. It’s a work horse that you can use to build a company, or it can be the start of a company builder. I think the cash flow will always be predictable. You would be able to predict recoveries, to predict your grade. It’s not erratic to put it simply. It will employ about 225 people full time. It’s a project that’s needed in an area in which the population is dwin
StockInterview: You have this much confidence in this project?
Larry Reaugh: This is a project that’s never been glamorous. It’s a work horse that you can use to build a company, or it can be the start of a company builder. I think the cash flow will always be predictable. You would be able to predict recoveries, to predict your grade. It’s not erratic to put it simply. It will employ about 225 people full time. It’s a project that’s needed in an area in which the population is dwin
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
dling.
StockInterview: Run us step by step through the construction process. What are you first constructing?
Larry Reaugh: The concentrator itself – that’s the major thing – get the foundations for the concentrator. We’d start pre-stripping although that wouldn’t be something that has to be done immediately. Clearing the site, building out the site, drilling and blasting the foundations and then setting up the cladding of the building so that we can work on this year around. Of course, setting up camp, moving into the camp, setti
StockInterview: Run us step by step through the construction process. What are you first constructing?
Larry Reaugh: The concentrator itself – that’s the major thing – get the foundations for the concentrator. We’d start pre-stripping although that wouldn’t be something that has to be done immediately. Clearing the site, building out the site, drilling and blasting the foundations and then setting up the cladding of the building so that we can work on this year around. Of course, setting up camp, moving into the camp, setti
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
g up the sewer and water systems and all those little things that you never think about that costs a lot of money and have to be done.
StockInterview: When do you actually getting around to building out the mining operation?
Larry Reaugh: Well, we construct all winter. Then we would begin the build-out on the tailings pond, and we would start pre-stripping. We’ve got about 10 million tons to pre-strip. By the way, on our five-year plan, once that’s done, there would be no strip ratio. There would just be ore to haul so our costs
StockInterview: When do you actually getting around to building out the mining operation?
Larry Reaugh: Well, we construct all winter. Then we would begin the build-out on the tailings pond, and we would start pre-stripping. We’ve got about 10 million tons to pre-strip. By the way, on our five-year plan, once that’s done, there would be no strip ratio. There would just be ore to haul so our costs
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
would be down considerably on that. The pre-strip would cost $15 to $18 million. All of this comes with a 20,000-ton concentrator.
StockInterview: When will Ruby Creek commence production?
Larry Reaugh: We will be in production with the commissioning, which is sort of production. It will be low grade material at that time in order to get your recoveries up, your grind rate and everything like that. There are always a few things that have to be worked out that you don’t want to do with the better grade material. We’d be in full pro
StockInterview: When will Ruby Creek commence production?
Larry Reaugh: We will be in production with the commissioning, which is sort of production. It will be low grade material at that time in order to get your recoveries up, your grind rate and everything like that. There are always a few things that have to be worked out that you don’t want to do with the better grade material. We’d be in full pro
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
duction in the beginning of the first quarter 2009, probably commissioning through the last quarter of 2008.
StockInterview: Won’t you need more than one company involved in writing Adanac a check for C$450 million?
Larry Reaugh: We are talking to refineries and steel companies. I am sure there is going to be sort of mix of some steel companies that will be involved in the strategic partnership on this. It will be two or more because their needs are individual. They don’t need a full-fledged operation. Some also have long-term con
StockInterview: Won’t you need more than one company involved in writing Adanac a check for C$450 million?
Larry Reaugh: We are talking to refineries and steel companies. I am sure there is going to be sort of mix of some steel companies that will be involved in the strategic partnership on this. It will be two or more because their needs are individual. They don’t need a full-fledged operation. Some also have long-term con
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
racts.
Second Opinions
We solicited comments from two industry experts about the Adanac Molybdenum Corporation: Otto Spork and David Michaud. One of Canada’s top investment funds in 2006, Otto Spork’s Strategic Opportunities Hedge Fund was an earlier investor in Adanac. David Michaud is our consulting metallurgical engineer. He neither holds an equity position in Adanac nor was he paid to render his technical opinion on the metallurgy of this deposit.
According to metallurgist, David Michaud, “Adanac Molybdenum Corp has a rare ca
Second Opinions
We solicited comments from two industry experts about the Adanac Molybdenum Corporation: Otto Spork and David Michaud. One of Canada’s top investment funds in 2006, Otto Spork’s Strategic Opportunities Hedge Fund was an earlier investor in Adanac. David Michaud is our consulting metallurgical engineer. He neither holds an equity position in Adanac nor was he paid to render his technical opinion on the metallurgy of this deposit.
According to metallurgist, David Michaud, “Adanac Molybdenum Corp has a rare ca
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
se of Text Book Molybdenum Metallurgy 101. It has a super coarse Endako Mines-like primary grind, flash rougher flotation and relatively strong regrind requirements. This makes for a nice clean Moly concentrate. An asset like this, once licensed in Canada, could attract attention from several mid-tier mining companies looking for metal reserves in politically safe countries.”
In a brief telephone interview with Sextant Capital Management’s Otto Spork, he said, “We are still very bullish on moly because demand is far exceeding suppl
In a brief telephone interview with Sextant Capital Management’s Otto Spork, he said, “We are still very bullish on moly because demand is far exceeding suppl
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
y and industry is finding more uses for the metal. We believe the price is going to slowly creep up. We like and are very bullish about Adanac. Larry Reaugh is very astute and has put properties into production. He’s been in mining for nearly 40 years. We consider Adanac very undervalued. It has recently gone off the radar screen because of Blue Pearl Mining. Adanac’s properties can be very profitable and are well on their way to getting permits to go into production.”
COPYRIGHT © 2007 by StockInterview.com, Inc. ALL RIGHTS RESERVE
COPYRIGHT © 2007 by StockInterview.com, Inc. ALL RIGHTS RESERVE
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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