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

China is eager to address one of the primary culprits behind its alarming coal mining fatalities, as evidenced by the Pre–Mining Degasification Symposium held in South China's Guizhou province on March 31st and April 1st. Sponsored by the province's Coal Mines Administration Bureau and the Coal Mine Safety Inspection and Supervision Bureau, coal mining executives gathered in Guiyang, a modest–sized city (by China's standards) of more than three million people, to discuss how the latest foreign technologies could help degasify China's 2,000 coal mines, both improving mine safety and reducing China's global output of air pollution. More than 80 representatives from 40 coal mines attended in China's second largest coal–producing province to find out about the latest foreign technology transfers, which might help reduce coal mining deaths.

Over the centuries as organic matter is converted to coal, methane, also known as CH4 and the primary constituent in natural gas, is produced during this process and stored in pockets within a coal seam. For every ton of coal produced, during the «coalification» process, more than 5000 cubic feet of methane is created. Coal mining releases this methane into the atmosphere. Over 90 percent of methane emissions come from underground coal mining. Because gas content is greater with depth, safety hazards increase during the underground coal mining process. Degasifying coal mines has been proven to help make those underground coal mines safer for miners.

Volatile gases produced during the coal mining process reportedly kill more than 15 miners every day in China, about 80 percent of the world's coal mining deaths. Prime Minister Wen Jiabao, a mining engineer by training, has demanded China improve conditions for Chinese coal miners. Critics, such as the Chinaworker.org, say the «underlying cause is a lack of investment in degasification equipment." The website claims, »Managers calculate that it's cheaper to pay out meager death benefits to miners' families than (to) raise investment." The Economist magazine reported that Chinese coal miners make as little as $60/monthly.

China is also concerned about its air emissions from coal mining. Worldwide, the coal mining industry released over 436 million metric tons of carbon dioxide equivalents in 2000. That accounted for about 8 percent of the total industrial methane emissions that year. China, Russia, Poland and the United States account for over 77 percent of coal mining methane emissions. Through the year 2020, China's share of worldwide emissions will jump to 45 percent. These emissions could be severely reduced if Chinese coal mines captured the methane gas for use in meeting its soaring energy needs, rather than vented into the atmosphere each time a new coal tunnel is opened.

One of the major draws at the Guiyang Pre–Mining Degasification Symposium were presentations about the latest coalbed methane drilling innovation by Tunaye Sai, Director of China Operations for Pacific Asia China Energy (TSX: PCE; Other OTC: PCEEF), and Nathan Mitchell of Mitchell Drilling Company (MDC) in Brisbane, Australia. Coal mining companies opened discussions with PCE after their presentation. "Executives from fifty mines showed interest in the Dymaxion® drilling technology to improve mining safety,« said Tunaye Sai. All of them showed interest? „All of them,“ responded Tunaye Sai. PCE reported in a news release on Wednesday, »The PACE–MDC joint venture group is currently preparing a business plan for the immediate development of this new strategy in order to address the demand, which arose from the attendees at this symposium."

«They are having problems in their mines,» explained Tunaye Sai, who is also a member of the Canadian Institute of Mining, Metallurgy and Petroleum. Because they have not been able to effectively degasify their mines, four of the attending Chinese coal mining companies immediately approached Tunaye Sai and Mitchell about using this state–of–the–art drilling technology. Earlier this year, PCE and MDC announced they were forming a joint venture to offer MDC's proprietary Dymaxion® drilling technology to companies in China, to help degasify their coal mines. MDC is Australia's largest privately owned drilling company, and their Dymaxion technology has been widely discussed by coal mining insiders. The PCE and MDC joint venture company has the exclusive rights to use the Dymaxion technology in China.

In a tape–recorded interview, Tunaye Sai told StockInterview, «The combination of a horizontal and vertical intersection draws the methane gas from the coal seam and captures it at the surface.» Australian newspapers have been exuberant over the Dymaxion® technique, calling it «revolutionary„ and “radical.» In its headline, one Australian newspaper called MDC's state–of–the–art G–55 drill rig «the Lamborghini of drill rigs,» and remarked how their drill rigs offered improved flexibility and cost efficiency.

The Dymaxion surface to in–seam (SIS) drilling method uses modified multipurpose mineral drill rigs, specially designed bottom–hole assemblies and specially trained personnel. The technique involves drilling a 60 to 90 degree hole from the surface and steering it through a medium radius bend to enter the target coal seam horizontally. The 96mm hole is then steered for up to 1200 meters in the seam towards a previously drilled vertical production well. A homing device, lowered down the vertical well to the target seam, aids the intersection with the vertical well. The vertical well is also equipped with a suitable pump to dewater the seam. After the hydrostatic head has been sufficiently lowered, the methane gas will flow to the surface. Newspaper reports also say this technique allows for significant savings over alternate underground gas drainage drilling methods.

The Dymaxion technology obviously turned heads at the recent Gasification Symposium. «One of the companies is a big company, mining 10 million tons of coal per year," said Tunaye Sai. »Last December, 12 people died in one of the coal mining company's tunnels." He explained that when coal miners are opening a tunnel, the gas comes out – sometimes explosively. «By using the Dymaxion technique, they can let the gas out before they begin mining a tunnel,» he added.

Discussions with the Chinese coal companies are in the initial stages. "They want to give us a block – not one that is being mined now, but one that may be mined in a few years,« said Tunaye Sai. »We're working on an arrangement right now because they are very interested.« He explained that the relationship would involve a continuous process. »We wouldn't just drill it and then abandon it,« he added. "We will be making sure that the gas will come out continuously and monitoring it.»

Tunaye Sai said that Pacific Asia China Energy was targeting the larger mines. «Among them, about ten companies mine about four million tons per year or more. Those are the ones we are talking to.„ PCE has ordered the drilling equipment, and it should arrive in China around October. ‹As soon as it is there, we can implement our plan, maybe in November or December.› He told us, “They have been asking us to demonstrate the equipment for them.» This may be an unexpected revenue surprise for Pacific Asia China Energy, and a blessing for Chinese coal miners whose lives may be spared, thanks to this latest technology transfer to China.

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

Bulgaria is located in Southeastern Europe, bordering the Black Sea, between Romania and Turkey. It has a total area of 110,910 sq km, 110,550 sq km of which is land; with water comprising 360 sq km. this makes Bulgaria slightly larger than Tennessee. Bulgaria is bordered by Greece, Macedonia, Romania, Serbia, and last but not least Turkey. The climate is temperate with cold, damp winters and hot, dry summers. Bulgaria is rich in bauxite, copper, lead, zinc, coal, timber and arable land. Bulgaria's location is strategic because it is near the Turkish Straits; Bulgaria also controls key land routes from Europe to Middle East and Asia. Bulgaria has a population of 7,385,367 (2006) and a population growth rate of 0.86 per cent (2006), with 68.7 per cent between 15–64 years old.

Background

The Bulgars, a Central Asian Turkic tribe, merged with the local Slavic inhabitants in the late 7th century to form the first Bulgarian state. In succeeding centuries, Bulgaria struggled with the Byzantine Empire to assert its place in the Balkans, but by the end of the 14th century the country was overrun by the Ottoman Turks. Northern Bulgaria attained autonomy in 1878 and all of Bulgaria became independent from the Ottoman Empire in 1908. Bulgaria became a People's Republic in 1946. Bulgaria held its first multiparty election in 1990 with the fall of communism. It has moved towards democracy and a free market economy ever since. The country joined NATO in 2004 and the EU in 2007. Bulgaria accepts compulsory ICJ jurisdiction.

Economy

Bulgaria entered the European Union on 1 January 2007. The government is committed to economic reform and responsible fiscal planning. Minerals, including coal, copper, and zinc, play an important role in industry. In 1997, macroeconomic stability was reinforced by the imposition of a fixed exchange rate of the lev against the German D–mark – the currency is now fixed against the Euro, and the negotiation of an IMF standby agreement. Low inflation and steady progress on structural reforms have improved the business environment; Bulgaria has averaged 5.1 per cent growth since 2000 and has begun to attract significant amounts of FDI.

Tourism has always been a big industry in the country, and is still booming: one of the 130 hotels in Slanchev Bryag, one of the most popular resorts in Eastern Europe. The government has pledged to maintain the fundamental economic policy objectives, i.e. retaining the Currency Board, practising sound financial policies, accelerating privatisation, and pursuing structural reforms. Economic growth continued in 2005 and 2006.

Agricultural output has been growing in recent years. Farming is more important than stock–breeding. The prevalence of mechanisation is higher than most other Eastern European countries. There are more than 150,000 tractors, 10,000 combines, alongside aeroplanes and other equipment.

Industry is of great importance for the economy. Bulgaria is a major producer of electricity though it is not very rich in reserves of coal, oil and natural gas. A second plant, the Belene Nuclear Power Plant with a capacity of 2,000 MW is under construction. There is a $1.4 billion (£718 million) project for construction of an additional 670 MW for the 500 MW Maritza Iztok 1 TPP.

In production of steel and steel products per capita the country is first in the Balkans. Ferrous metallurgy is very important.

Property Market

The property market has been boosted recently by foreigners seeking additional homes. These buyers come from right across Europe but the largest numbers are British, encouraged by comparatively cheap property and because the country is more accessible through low cost air travel. The future for this particular country is bright indeed.