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