Adanac Molybdenum Corporation

Adanac Molybdenum Corporation

September 19, 2007 08:47 ET

Adanac Board Approves Ruby Creek Construction

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 19, 2007) - Adanac Molybdenum Corporation (TSX:AUA)(PINK SHEETS:AUAYF)(FRANKFURT:A9N) is pleased to announce its Board of Directors has approved management's recommendation to proceed with development and construction of the Ruby Creek Molybdenum Project located near Atlin, British Columbia.

The action follows the awarding of an Environmental Assessment Certificate for the project from the British Columbia government on September 10, 2007. Specific permit applications to upgrade the existing access road from the Surprise Lake bridge to the project site and for plant site development are under review by the appropriate provincial regulatory agencies, with field work to begin immediately upon receipt of approvals.

Federal agencies were fully involved in the environmental review process, and approval from the Department of Fisheries and Oceans is expected before the end of October.

"This is a very exciting milestone for Adanac," said Michael MacLeod, President and CEO. "The Board's decision to proceed underlines its confidence in the strategic plan developed by management."

The Company has completed a review of the estimated capital cost of the project, based on 30% of detailed engineering being complete. Rising capital equipment costs and an increase in the planned average processing rate from 900 to 1,100 tonnes per hour have increased the construction cost to $640 million from a previous figure of $460 million. The amended total includes a contingency amount of $57 million plus $20 million for construction risk. Approximately $40 million has been spent on the project to date.

Re-engineering of the open pit mine, based on up-to-date mining and processing costs and a long term molybdenum price of US$10/lb, incorporates the Phase 5 resource identified in the Company's feasibility report released on April 28, 2006 into the long term mine plan. The annual processing rate increases to 7.6 million tonnes per year based on milling approximately 157 million tonnes grading 0.058% molybdenum. The mine life is estimated to exceed 20 years.

The Commodity Price Research team at CPM Group of New York has provided a molybdenum price outlook that will be incorporated into future financial modelling of the project. CPM Group's price outlook is an average of 50% higher than the molybdenum price assumptions used previously in the Ruby Creek Feasibility Study prepared by Wardrop Engineering in April 2006, and more than offsets the higher capital cost of the project.

A diamond drilling exploration program is being planned to extend and follow up results for the work currently under way. This program is expected to run through the first quarter of 2008. Results to date have been very encouraging, and future activities aim to expand and delineate new resources for subsequent economic evaluation.

Adanac is currently engaged in advanced discussions with selected financial institutions and potential strategic investors to complete the financing for the project. Full funding is expected to be in place early in the first quarter of 2008.

This news release was prepared by John Fisher, a Qualified Person pursuant to National Instrument 43-101.

On Behalf of Management


Michael MacLeod, President & Chief Executive Officer

This news release may contain certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time with the Toronto Stock Exchange, the British Columbia Securities Commission and the US Securities and Exchange Commission.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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