And a head first jump into the folk–lexicon of village Karnataka

It was mid–September and the beginning of a very temperate South Indian Autumn; a group of students and I were on a visit to a local archaeological site just outside of Bangalore city. We all packed into a mini–bus and rode out the sixty mile journey to the Ramanagara Taluk Valley, where we soon came upon the ancient environs of the Kunagal Hills. Our guide in this venture was the archaeologist, cultural anthropologist, and folk–lore scholar, Dr. M. Byregowda.

Dr. Byregowda is a man of action who possesses a great love for pre–history, folk–knowledge, and old–time Indian tradition. He took his doctorate degree after doing an extensive field study on the Iruligas tribals. "My thesis on the Iruligas for the PhD comprised 480 pages. But I ended up writing 18 books, including children's plays based on folk–tales, practices, traditions, and games,« he was quoted as saying in an Indian newspaper. The article, which was entitled „Unsung Heroes,“ also said that, »For him [Byregowda], the tribal is a natural scientist, the master of local knowledge, the best teacher and learner in nature."Byregowda regularly walks through the hills of Southern India as though he's the Indiana Jones of the east; ever searching for any clue that could direct him towards a better understanding of the region's long buried pre–history. He keeps his head towards the ground, least he step over an ancient pot–sherd, and his ear towards the wind, so that he doesn't miss any old–timer's folk–tales. «In every village next to a hill, you can find interesting legends related to the hill,» he said. Byregowda's attempt to assemble and re–vitalize fragments of past ways and knowledge has been a true passion for him since he was a child. «The rocky hills of Ramnagar, where I hail from, have always fascinated me,» he shared in the above referenced article. It was Byregowda himself who found and preliminarily excavated the site that my class and I were now about to explore.

We all piled out of the mini–bus near the edge of a small village and, acting like the eager American university students we were, began pointing our cameras at anything and everything. The landscape that we stepped into seemed as ancient as time itself; and row of huge rock spires protruded from the ground, gently flanking the small village in its' crest. This was pre–history in the raw, and I could feel the temporal displacement that comes from being near archaeological sites. We then walked through the village and began ascending the hill at its edge.

At the apex of this hill was a flat area which was the location of the pre–historic habitation that we came to visit. It was on a small level plan, no bigger than three or four acres and it had a few square test units dug into it. As a field–archaeologist myself, with six years of professional experience, I intuitively began inspecting the work of my Indian brethren. The site appeared to have been left dormant for a while so I could not, nor really did I wish to, make any value judgments on their field methods. The other students soon gathered around the main test unit and Dr. Byregowda began telling us about the pre–history of the region and the artifacts that were unearthed from the excavation that he initiated, and I assume, directed. The area had been inhabited by a grand succession of cultural occupations; including the Shathavans, Gangas, Noloambas, and the Mysore Wodeyars. There are also the remains of once–upon–a–time forts and metallurgy foundries scattered throughout the hills.Byregowda then presented us with some local artifact samples; which consisted of lithic choppers, axe heads, large scrappers, and a couple of bi–faces. We passed these pre–historic tools amongst us and then we followed Dr. Byregowda's lead up a steep hill.

When we arrived at the top of the hill we found a large cave that was formed by a few huge stone spires that had come together in 'tee–pee' like formation. Dr.Byregowda told us that an annual poetry celebration was held in the cave and people from all over the region would come to recite poems. We were then led trough the dips and curves of the cave and out the other side. There was another hill on this side that I ran up jovially and embarked for the edge. Once there, I could gaze upon the entire valley, which consisted of agricultural fields that stretched on and on ad infinitum. This was the Southern India that I set out for; all of those Bangalore ideals of progress and cultural–denial did not seem to exist here. This was the first time since I came to India to study that I felt as if I were experiencing something genuine. Dr. Byregowda then began to tell us about how the people who attend the poetry celebration also drink water from the natural spring that was near the cave. He then launched into a folk–tale about how the spring originated.

His story, which came from the folk–lexicon of the nearby villages, went something like this very much abbreviated version: there were two sisters who lived in a local village; one of them was good and the other was bad. Then a prince came into town and made springs out of them. The good–sister–spring contained water that was good for both heart and soul and the bad–sister–spring was poisonous. On the hill, right were we stood, were two springs side by side; one of them emitted nutrient rich, mineral water and the other would make people ill if they drank from it.

From my shadily recited version of Dr. Byregowda's story one can readily assess the true pertinence of folk–tales. Folk–tales consist of stories, anecdotes, and wisdom that are meant to entertain as well as inform members of a specific community about the ways of their culture, history, and environment. Folk–tales, essentially, constitute a type of orally transmitted survival manual from which older generations teach their children how to live within their society and world. As the above story literally indicates: there are two springs near a village which lie side by side; one is poisonous and the other rejuvenating– how do the villagers remember which is which and convey this information to the next generation? One of the best ways that communities the world over have collectively distilled this knowledge into a usable lexicon is through the story. These folk–tales are meant to be ingrained into the psyches of the local inhabitants from the time they are born and then passed on by them to their children in the same manner. In this way, tradition is passed on and people continue to possess the knowledge of their ancestors.

Dr. Byregowda knows the value of these folk–tales intimately, and he has dedicated a large portion of his free time (he has a regular job in an unrelated sector and a family to care for) to their preservation and proliferation. He seemed to even feel that it was important for us, as silly university students from a far off land, to be told these stories, and he excitedly jumped into another tale. After this story, which taught us about the origin of an interestingly shaped rock outcropping, we drank some water out of the good–sister–spring and then began walking back to the mini–bus.

It was time for us to leave these beautiful hills in the midst of the Karnataka country side. I learned very much from Dr. Byregowda and I was truly inspired by the passion that he puts into his work. With the vast economic and cultural changes that India and the rest of the world are going through, it is readily apparent that the folk–lexicon of centuries is at stake. It takes the will of dedicated people like Dr. Byregowda to collect and preserve this fast depleting treasure–trove of knowledge. One day perhaps, in another time, the people of India and the world may be ready to dig back into this cache and revitalize the time–honed traditions of our ancestors. When the corporations fail and the new world order crumbles; when the environment can take no more neglect; when we have to pick up the pieces and start from scratch, the work of Dr. Byregowda shall provide us with a temporal look back into the past– a map by which we can proceed.

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 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."

COPYRIGHT © 2007 by StockInterview.com, Inc. ALL RIGHTS RESERVED

Торги на рынке акций во вторник проходили достаточно спокойно. Волатильность торгов не высокая. Индекс ММВБ и основные индексные бумаги значимых изменений не претерпели — продолжается консолидация выше 1450 пунктов. Рынок готовится к дальнейшему ходу наверх. По–прежнему локомотивом выступает банковский сектор — Сбер (SBER) и ВТБ (VTBR) обновили локальные максимумы. За ними пытается подтягиваться всё остальное. Нефтянка пока выглядит нейтрально. Спроса там пока нет. Недавний лидер — металлургия сдает позиции — Северсталь (CHMF), НЛМК (NLMK), ММК (MAGN) торгуются в отрицательной зоне.

Тот факт, что рынок вышел из затяжного сентябрьского диапазона наверх и закрепился на достигнутых уровнях, позволяет надеяться на то, что осеннее «ралли» все–таки состоится и индекс обновит весенние максимумы.

Лучше рынка выглядят обыкновенные и привилегированные акции Сбербанка (SBER). «Длинные» позиции стоит удерживать. Хотя, на уровне сопротивления 92,5–93 можно зафиксировать часть позиций.

На эти деньги можно добавить ВТБ (VTBR). Котировки только выходят из широкого диапазона. Потенциал роста здесь, по–моему, больше.

Газпром пока не решается выйти из узкой консолидации. Предложение пока очень высокое. Надеюсь, спрос все–таки победит, и мы увидим в ближайшее время хотя бы 170 р./акцию.

Из нефтегазового сектора лучше выглядит Роснефть (ROSN) и Сургут (SNGS). «Длинные» позиции по ним надо держать.

Хуже рынка выглядят бумаги Северстали (CHMF), ФСК, Уралкалия (URKA). Этих бумаг в портфеле быть не должно.

ГМК НН (GMKN) опять уперся в сильное сопротивление 5300–5350 р./акцию. Пробиться выше пока не получается. На этих уровнях можно сократить часть позиций", – компания NETTRADER