| We interviewed Adanac Molybdenum executive | | | | will cost you up to C$15 million. So, now you |
| chairman Larry Reaugh about the dozens of | | | | move it through the environmental stage. That |
| junior resource companies, which now proclaim | | | | can take up to 3.5 years. |
| they are part of the Molybdenum Bull Market. | | | | |
| His company appears as a potential molybdenum | | | | StockInterview: Many mining projects around |
| producer on the horizon. | | | | the world get stalled because of bad |
| | | | relationships with the native inhabitants. |
| Since the beginning of this year, Reaugh's | | | | Please tell us about Adanac's relationship |
| company has been riding the 'moly wave.' | | | | with the First Nation of Canada. |
| Institutions and investors are climbing | | | | |
| aboard as greater interest emerges in the | | | | Larry Reaugh: If you don't have a good |
| silvery-white metal, which adds both hardness | | | | transparent relationship with the natives and |
| and anti-corrosive properties to everything | | | | the locals, and you don't include them all |
| from energy pipelines and nuclear power plant | | | | the way through, you are not going to have |
| condensers to desalination plants, automotive | | | | ease of getting your social, economic and |
| parts and air pollution systems for | | | | environmental permits done. When we got |
| coal-fired power plants. | | | | involved up there, the first thing that we |
| | | | did was contact the local band in the area. |
| We posed five questions to Larry Reaugh to | | | | We met with the consul, basically gave them |
| help separate the hype from the reality of | | | | our plans. They brought in their consultants, |
| the current molybdenum mania. | | | | and as each problem came up, we worked our |
| | | | way through it. They became a big part of |
| StockInterview: Of all the molybdenum | | | | working through to the solution. They know |
| companies out there, how do you know which | | | | that there's an impact benefits agreement |
| are going to become economic? | | | | that we will be negotiating over the next |
| | | | couple of months. Socially, this is a big |
| Larry Reaugh: You can really only tell once | | | | economic boost for everybody in the area. If |
| the bankable feasibility is done. The | | | | you can help them to raise their industry |
| bankable really narrows down the resource | | | | awareness in having off-spins from that mine |
| itself into a reserve and that can change. | | | | - other industries that they can develop, |
| It's the only thing that can tell you with | | | | then you are doing a good job of being a good |
| any assurance that a project can move ahead | | | | corporate citizen, not just to the native |
| and make money. You should be able to take it | | | | groups but also to the entire area. If you |
| to the bank, and they should finance you to | | | | don't think that way, then you are going to |
| go into production. | | | | have problems before you get going. |
| | | | |
| StockInterview: Please explain the timeline | | | | StockInterview: What steps will you have to |
| and the process to move a moly project from | | | | take to begin production after you get your |
| the resource stage all the way through the | | | | mining permits? |
| bankable feasibility and permitting stages. | | | | |
| | | | Larry Reaugh: Once the environmental permits |
| Larry Reaugh: By the time you get to the | | | | are in, it'll be construction. That will take |
| resource stage, you should already have your | | | | about 18 months. That will be right from the |
| baseline study and your environmental | | | | ground up - from breaking the soil to laying |
| permitting started. You should have already | | | | the foundations to pre-stripping the pit to |
| made contact with all the various levels of | | | | laying down the tailings pond and the waste |
| government and stakeholders in the area to | | | | dump site. |
| hire a qualified engineering firm - one that | | | | |
| has impeccable credentials to do the | | | | StockInterview: The molybdenum mining market |
| pre-feasibility. And also apply for your | | | | is robust right now. Why should investors |
| mining lease at that time. Once the | | | | consider Adanac as opposed to other moly |
| pre-feasibility is done, that gives you 30 to | | | | companies? |
| 40 percent certainty on the project. You take | | | | |
| the results from those and then decide to | | | | Larry Reaugh: If you go to our site, you will |
| move right into the feasibility of those if | | | | see that the bankable feasibility is calling |
| it's at all positive. Eventually when you get | | | | for a three-year payback on a C$450 million |
| into the bankable feasibility, then you have | | | | investment. We believe that that is |
| another 10 to 20 percent assurance that the | | | | obtainable. The project is way ahead of its |
| project will bear fruit at the end of the | | | | peers. I don't think there's anybody else |
| day. A bankable feasibility gives you | | | | that's breaking ground this summer on a |
| reserves. Once you get reserves, you can | | | | project of this size. Here's a company that's |
| actually put a dollar number value to it. | | | | trading at a very low market cap, which |
| That gives you enough of a grounding to it in | | | | leaves a very great entry point for a mine |
| which to do the detailed mining That includes | | | | that could be producing by the last quarter |
| the mining plans for your piping, your water, | | | | of 2008 and certainly full production by the |
| your foundation layouts, your site plans. | | | | first quarter of 2009. |
| Every Nth degree of construction that's going | | | | |
| to take place in that plant has to be put on | | | | COPYRIGHT© 2007 by StockInterview, Inc. |
| paper. That's about a 13-month project and | | | | ALL RIGHTS RESERVED. |