The knowledge and experience of its executive management matched with its first-class resources and assets have Creston Moly Corp. on a fast track to becoming the leading molybdenum producer in North America, President, CEO and Director Bruce McLeod says.
The Vancouver-based company has 100 percent interest in three molybdenum deposits: Ajax in Alice Arm, British Columbia, the largest undeveloped molybdenum deposit in North America; Moly Brook, a promising molybdenum deposit on the southern coast of Newfoundland; and the El Creston molybdenum deposit in the state of Sonora, Mexico, approximately 175 kilometers south of the U.S. border. It is the largest deposit of its kind in Mexico.
Creston Moly is focusing most of its resources on El Creston right now due to its close proximity to power, roads and railway. In fact, a custom molybdenum roaster is approximately 105 kilometers away from the 18,379-hectare property by road. Additionally, Mexico’s semi-desert climate allows for development year-round, which will enable Creston Moly to begin production on El Creston much quicker than it would with Moly Brook and Ajax.
The history of El Creston goes back as early as the 1930s when drilling first occurred at the Sonora deposit. “Since then, there have been a number of drill programs on the property,” McLeod notes. “Historically, AMAX conducted the most extensive exploration program, carrying out evaluations studies between 1978 and 1983. In 1980, they joint ventured with Fresnillo and conducted further studies on the project.”
Creston Moly was founded in 2002, but began focusing on the El Creston deposit in 2007 after it raised $40 million to acquire 100 percent interest in the property. In August 2009, Creston Moly merged with Tenajon Resources Corp., at which time McLeod became president and CEO of the company.
With more than 25 years of experience in project development, McLeod was founder and executive chairman of Sherwood Copper, which purchased and developed the Minto copper mine in Yukon, Canada, in conjunction with Tenajon. He works alongside Executive Chairman and Director Colin Benner; directors Richard Godfrey, John McCleery, John Robins, Richard Hall, Michael Gunning; CFO Wayne Johnstone and Corporate Secretary Brenda Nowak.
After M3 Engineering & Technology Corp. of Tucson, Ariz., completed an independent pre-feasibility study of the El Creston deposit in February 2009, it estimated the main zone contains 249,948,000 pounds of molybdenum and 158,831,000 pounds of copper in a proven and probable mineral reserve of 146,705,000 tonnes grading 0.077 percent molybdenum and 0.049 percent copper at a 0.037 percent molybdenum-equivalent cut-off grade. At present, the mine is valued – after tax – at $306 million (U.S.) using an 8 percent discount.
“We are now moving it toward a definitive feasibility study as we speak,” McLeod reports.
“Our feasibility is due to be delivered in second quarter 2011. From there, we’ll also be in our permitting program, so we hope to be able to start construction in 2012. We feel we can build the project in 18 to 20 months.”
McLeod says the company anticipates El Creston will produce up to 20 million pounds of molybdenum and 12 million pounds of copper each year, and the mine life is expected to be at least 11.5 years. “However, what we’ve been focusing on since we acquired the project is expanding the size of the resources at which we’ve been quite successful,” he states.
“We are always looking at opportunities to generate value for our shareholders,” McLeod says when asked whether Creston Moly would consider selling the property. However, “The background of the principals behind this company is in building projects, so that’s certainly our primary goal.”
According to McLeod, there are no new molybdenum mines estimated to come online before 2013, and a worldwide molybdenum deficit is predicted for 2011. “Most analysts predict continued strength in molybdenum for the short- to mid-term,” he says. “We feel that there will be great strength in the molybdenum market in the timeline that we will take to complete the feasibility, financing and construction of the El Creston project.”