Many molybdenum mining companies have released Second Quarter results, as well as updates for ongoing projects. Results for the companies are mixed as some have benefited from rising moly prices, while others have struggled to get new projects online.
By Michael Montgomery—Exclusive to Moly Investing News
The slow summer session drags on as molybdenum prices for contracts and on the London Metals Exchange remain relatively stagnant. Demand for steel, the largest use of molybdenum, remains rather weak in China. Because of high iron ore costs, steel mills in the country have decided to shut down and perform maintenance, hoping for a price break for ore. These factors have made for a flat molybdenum market, however, mining companies are still benefiting from the higher prices for moly since the $8 dollar lows of 2008.
Many moly mining companies have released second quarter results, as well as updates for ongoing projects and operations. Results are mixed. Many companies find themselves investing significantly in projects that have yet to produce. This is the case with General Moly, which continues working on permitting and planning for their Mt. Hope project billed to be the largest molybdenum mine in the world. The following is a rundown of market activity for some of the world’s molybdenum mining operations.
General Moly is currently working to start production at their Mt. Hope project in Nevada. The project slated to be the largest molybdenum mine in the world has received heavy funding from China. The company stated it expects the $40 million of equity financing from the Hanlong Group by the year-end. Permitting for the project is still in process, but seems to be moving along after a water usage dispute held up the process.
“Net loss for the three month period ended June 30, 2010 was approximately $3.2 million ($0.04 per share), compared to a loss of $2.8 million ($0.04 per share) for the year ago period. Net loss for the six month period ended June 30, 2010 was approximately $6.0Million ($0.08 per share),” stated the press release.
Grupo Mexico [PINK:GMBXF]
Grupo Mexico, mining and transportation giant, posted a $310 million profit for Q2. “A jump from a year earlier helped by improved metals prices and production from its recently recovered U.S. mining arm Asarco. Last year, the company’s second quarter profit was almost $239 million,” reported Mica Rosenberg, for Reuters.
The company is also hoping to merge the two railway companies Ferromex and Ferrosur. Initially, anti-trust regulators denied the deal; however, a court ruling overturned the decision. There could still be another appeals process, however the company hopes the merger will take place in the first quarter of 2011. The company has also proposed a merger between its Southern Copper and U.S. copper mining operations, Asarco, which is valued at $6 billion.
Teck Resources announced quarterly earnings of $260 million, or $0.44 per share for Q2 2010 the company state in a press release. The company assets vary from moly to coal.
Teck also acquired 50 per cent of Brazilian mining company Horizonte Minerals. “In the swap deal, Horizonte Minerals will acquire total ownership of the Araguaia project in the country’s north from the Canadian firm while in exchange; the Canadian firm will obtain a 50% stake in the now larger Horizonte Minerals,” stated the report on Invest in Brazil. The deal will create on of the largest nickel projects in the country.
Creston Moly Corp. [CVE:CMS]
Creston Moly announced drill results on its El Creston deposit located in the state of Sonora, Mexico, and a proven and probable resource base of over 249,000 lbs. of moly and over 158,000 lbs. of copper. The drilling is part of the companies feasibility study.
“Using a base case scenario of $15/lb Mo and $1.75/lb Cu M3 determined that the El Creston molybdenum deposit has an after-tax Net Present Value at an 8% discount rate of USD$306 million and an Internal Rate of Return of 20.2%,” state the press release.