General Moly, a U.S.-based molybdenum mineral development, exploration, and mining company, announced the initiation of a NI 43-101 compliant Preliminary Economic Assessment (PEA) on a starter pit project at the Company’s wholly-owned molybdenum-copper Liberty Project located 20 miles north of Tonopah, Nevada.
The Liberty Starter Pit Project ("Starter Pit Project") might broaden General Moly’s resource base and potentially allows for a low capital cost, rapid payback alternative to prior Liberty Project development plans reflecting current market prices for molybdenum and copper.
The Starter Pit Project includes previously excluded higher grade copper resources which can be mined in conjunction with molybdenum ore with copper credits in the main molybdenum deposit.
The highest grade copper resources are located in three satellite deposits southeast of the main molybdenum ore body. These satellite deposits, based on historical resource calculations, could contain 50 to 100 million tons of material averaging approximately 0.3% to 0.35% copper contained primarily in chalcocite/digenite, chalcopyrite and covellite mineralization, which is amenable to standard froth flotation.
Bruce D. Hansen, Chief Executive Officer of General Moly, said, "We believe a copper focused Liberty Starter Pit Project has the potential to generate favorable economics given its low strip ratio in shallow pits combined with relatively low initial capital requirements with the significant pre-existing infrastructure and the site’s prior open-pit operations. In addition, our preliminary view is that the Starter Pit Project can begin on our privately owned land which is expected to allow for a shorter and simpler permitting process with the state of Nevada. Taking into account the current ratio of molybdenum and copper prices today compared with our initial Liberty study in 2008 and updated results in 2011, it makes sense for the initial economics and production schedule to be largely driven by the site’s shallow blanket of secondary sulfide copper mineralization."
Mr. Hansen concluded, "We anticipate completing the PEA in the summer of 2014, and believe the results will demonstrate the inherent value and flexibility that the Liberty Project provides to our shareholders, complementing the significant value and optionality of the Mt. Hope Project. Even as we initiate this PEA at Liberty we are continuing to pursue financing alternatives for the Mt. Hope Project, and recent updates to capital and operating costs, mine plans, and project economics are supporting ongoing due diligence efforts. In addition, we are pleased to see an upward trend in underlying molybdenum prices from just over $9 per pound in the summer of 2013 to the current $11.50 per pound. This represents a 14-month high for moly prices and is supported by improved demand and tighter supply. Given the cost structure of the industry along with further growth demand potential, we feel the molybdenum price has the potential to continue to improve in the coming years to a more sustainable long term level."
General Moly is configuring the Liberty Starter Pit Project to mill 25,000 short tons per day of primarily higher grade copper ores with moly credits for up to 10 years before fully transitioning into the main molybdenum pit resources.
This production rate enables the Starter Pit Project to fully use existing mill foundations and existing infrastructure including an electric power transmission line, transformers, and distribution system as well as a paved access road, fresh water wells and water system, a large mine equipment maintenance building, warehouse, administration office, analytical laboratory, perimeter fencing, security systems, and tailing storage facility, thereby reducing initial capital costs.
The Starter Pit Project plan also provides significant flexibility to either shift into higher grade molybdenum production or to increase throughput later as molybdenum market conditions dictate. The Starter Pit Project will benefit from low initial stripping and shallow pits as the copper ores are at or near the surface and pre-stripped. The mine will further benefit from short haulage to the mill and waste stockpiles.
Anaconda developed and operated at the Liberty site between 1982 and 1985 before selling it to Cyprus Minerals who operated from 1988 to 1991. Equatorial Minerals operated a copper leach project on the Liberty site from 1999 to 2001. General Moly acquired the site in 2006.