The International Resource Journal: Moly Mines

Moly Mines
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admin on 06 August, 2009 03:49:00
 
The Spinifex Ridge molybdenum project, located in the Pilbara region of Western
Australia, has had plenty of visitors over the years. Now it is under the
watchful eye of Australian company Moly Mines Limited.
“The deposit was originally discovered by Anglo American back in 1969.
Most of the early work on it was done by Esso Minerals, Exxon back in the
mid-seventies. That work was followed by some work by AMAX around 1980. That
period was a time when there were high moly prices but following that it
basically dropped off the radar of most companies and molybdenum in general did
in fact during the eighties, nineties and early 2000” David Fisher, Moly
mines CEO and Managing Director explains.
“Even though we had a standing moly consumption in the world, we saw that
expanding demand being met by the world’s copper industry. Certain sorts
of copper deposits –porphyry copper deposits – usually have a bit of
moly associated with them. The copper guys found that they could actually
recover that moly, attribute all mining and processing costs to their copper
operations and basically make moly for almost nothing, that’s why everyone
lost interest during that time. Moly prices were very low until about the time
when we picked up Spinifex Ridge.”
On April Fool’s Day, 2004, Fischer and Moly Mines consummated the deal on
the Spinifex Ridge moly mine.
“We’ve since spent about $300 million dollars on the project, that
includes buying the long lead equipment for the project. We’ve done about
three months of detailed engineering with a crew of about 300 engineers through
WorleyParsons so not only have we completed feasibility, we’ve taken
engineering to a point where we could construct it tomorrow and that’s the
great advantage of the project. It is fully permitted and it is ready for
construction. That includes environmental permitting, mining leases granted, and
native title agreements in place” Fisher says.
“Now we were ready for financing last year but obviously the market
circumstances got ahead of us and we missed out.”
Now Moly Mines have devised a smaller initial scale operation and are waiting
for their time to bring this into effect.
THE SPINIFEX RIDGE PROJECT
“Since then we’ve looked at whether it’s possible to construct
a smaller scale project. The feasibility and engineering processes have been
done on the basis of a 20 million ton a year mining and milling operation
producing a concentrate” Fisher says.
He explains that the equipment, mills and design of the site is very large.
“The original circuit designed – the front end of it anyway - was
roughly two parallel circuits” Fisher explains.
“It wasn’t difficult to draw a line down it and use our detailed
engineering in cost and design because it would be essentially half of the
circuit and we’ve done that and the capital cost is approximately half of
the capital cost of the large mill. We need about $600 million Australian to
build the smaller circuit.”
This smaller scale operation stems from “really one of the starter
pits.”
“It would produce about 13 million pound of moly per year and about 15
million pound of copper. At the same time we actually redesigned the mine
itself. Originally we had a 20 million ton per year pit with a strip ratio of
around 1.2 to 1.3 to one. The ore body itself has a higher grade core and the
grade decreases in all directions as you move away from that core so the big pit
design we replaced with an inner pit” Fisher says.
“It goes down the centre of the deposit we have a higher head grade as a
result. The head grade goes from about .05 to about .07 per cent moly. Our
operating cost per pound of moly after crediting copper drops from about $7.50
down to about $6.80 per pound of moly produced when you compare the 20 million
ton to the 10 million ton operation.”
SPINIFEX RIDGE – THE FUTURE
Fisher says that in our current market climate, the Spinifex Ridge project is
“unfinancable at the moment because of the debt market out there for green
fields mining projects of any significance so at the moment it is on
hold.”
“We believe we need a moly price closer to $20 per pound moly before we
see it being financeable. Even though we can mine and make moly at under $7 a
pound moly, you still need a better market than that to finance it” Fisher
says.
Meanwhile Moly Mines have another project conveniently located just 500 to 100
metres from the Spinifex molybdenum site.
“We’ve done a lot of work on our iron ore deposit” Fisher
says.
“There’s about seven million tons in resource there at the moment of
what is direct shipping iron ore, and we’re getting a lot of interest in
that. We anticipate being able to mine between a million and two million tons a
year and it’s a very simple operation.”
As Moly Mines enjoy their “simple” iron ore site nearby, they appear
to be ready for whatever happens, sitting on arguably the most advanced green
field molybdenum site until the time is right.