The Ups and Downs of Moly Mining

By Michael Montgomery—Exclusive to Moly Investing News

Molybdenum miner, Roca Mines (CVE:ROK) has had to shut down operations on their ‘Max Molybdenum’ mine in British Columbia again due to safety concerns. Mining operations are complex and dangerous, as the recent events in Chile and others like it around the globe continue to show. This is the second shutdown of the mine in two months for the same “sloughing” walls issue. This is basically when the walls of the mine give way. The continuing safety concerns have left employees uneasy, some have even quit.

The collapsed wall causes damage to other equipment in the mine, as the air pressure shoots through the mine leaving havoc in its wake. “That air blast caused ladders, ventilation doorways and other equipment to be damaged. He [Roca CEO, Scott Broughton] figures it will be about another week before that portion gets fixed,” reported Sam Smith, for Arrow Lake News.

According to a statement released from the company, the mine will take at least a month from the time this article was written to be fully operational. The shutdown will most likely affect earnings.

Ivanhoe Australia Ltd. (ASX:IVA) announced the completion of the acquisition of Osborne Copper and Gold project, purchasing the company from its parent company, Canada’s Barrick Gold Corporation. Ivanhoe agreed to buy the project for $17.5 million on top of a small royalty.

“Ivanhoe Australia said the Osborne acquisition enabled production to start at its Little Wizard molybdenum and rhenium deposit by 2001 and at the nearby Merlin deposit by 2012,” stated the article from the Australian Associated Press.

The purchase will help Ivanhoe to start production on its Merlin project because of the savings of sharing equipment for the two projects. The concentrator alone is valued at $300 million. In all, the company states,  it saved $100 million in upfront costs through the purchase.

Taseko Mines (TSE:TKO; AMEX:TGB) released third quarter production results from its Gibraltar mine. The mine produced 25.7 million pounds of copper and 265 thousand pounds of molybdenum. A 5.6 million pound improvement over the previous quarter. “This new production level is a result of the capital we started investing in 2006… The result is a modern, low cost, efficient copper mine which will generate significant cash flow for 25+ years and allow us to further grow our Company,” stated Taseko CEO Russell Hallbauer. The mine is a joint venture with Cariboo Copper Corp. which owns a 25 per cent share.

Moly Mines (ASX:MOL) recently announced the 35,500,000 Project Finance Options that were to fund the companies Spinifex Ridge moly project were canceled. This does not mean that the company has lost funding for the project. The Chinese firm that was to fund the project, the Hanlong Mining Investment Pty Ltd, wanted further studies and cost analysis of the project.

“The proposed financiers have requested the completion of an Engineering Procurement and Construction (“EPC”) contract that describes the scope, cost and schedule for construction of the Molybdenum Project as a core condition precedent to the financing,” stated the press release.

Moly Mines said that the Chinese firm has shown a high level of support and commitment to complete the process. The funding of this project has hit a road bump, but it seems that it will likely go through seeing the desire of Chinese firm to fund molybdenum projects around the globe.

Moly Mines also announced that the first shipments for its Spinifex Ridge iron ore project are on track for December of this year. The company also awarded an operations contract for the 1 million tonne per annum Spinifex Ridge Iron Ore Project.