d 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 production 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 contracts.

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 case 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 supply 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

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 experience – 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 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 this 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 bankable 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 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 about 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 greater 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 drilled 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 infrastructure, 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 in 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: 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. 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 dwindling.

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, setting 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 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 production 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 contracts.

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 case 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 supply 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

project into production?

Larry Reaugh: The bankable 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 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 about 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 greater 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 drilled 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 infrastructure, 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 in 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: 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. 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 dwindling.

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, setting 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 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 production 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 contracts.

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 case 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 supply 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

er the continuity, the greater the confidence in your ore body. Out of the 283 holes drilled 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 infrastructure, 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 in 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: 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. 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 dwindling.

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, setting 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 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 production 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 contracts.

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 case 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 supply 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

to hit the ground running this summer. During the peak of construction, we’ll have up to 1000 people working for us. 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 dwindling.

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, setting 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 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 production 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 contracts.

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 case 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 supply 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

d 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 production 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 contracts.

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 case 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 supply 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.”

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