Home / Research Tools
Research Tools
| | Corporate Profile: Adanac Molybdenum Corporation
Publisher: Kaiser Research Online
Author: Copyright 2013 John A Kaiser
|
| |
Adanac Molybdenum Corp (AUA-V)
| Adanac Molybdenum Corporation is the owner of the Ruby Creek molybdenum project located near Atlin in northern British Columbia for which a measured and indicated 43-101 resource of 407.9 million tonnes of 0.067% Mo was reported in 2009. Ruby Creek was explored by various parties from 1966 until the claims were allowed to lapse in the late nineties. They were restaked in 2002 and acquired by Larry Reaugh's Adanac which initiated a feasibility study in 2004 when molybdenum prices underwent a tenfold price gain to levels above $30/lb where they stayed until the financial collapse in late 2008. Adanac received approval in late 2007 to develop a 23,000 tpd open pit mine at a cost of $640 million, toward which it secured senior note bridge financing of $80 million in May 2008, the proceeds of which were used to order mine equipment. On December 19, 2008 Adanac filed for bankruptcy protection and undertook a restructuring plan completed on February 28, 2011 which involved a 150:1 rollback and the issue of new stock which resulted in note holders owning 92% of Adanac, unsecured creditors 5%, and existing shareholders 3% of the resulting 25,462,544 issued stock. Larry Reaugh's team has been replaced by representatives of the resulting key shareholders. All development permits remain valid, though a federal permit for a tailings pond is still needed. All development work is on hold while management awaits better molybdenum prices and seeks the joint venture or sale of the Ruby Creek project. |
Key to Understanding IPV Charts and Spec Value Hunter Tables
| An IPV Chart is a graphical presentation of a Spec Value Hunter table that has been constructed according to the Rational Speculation Model developed by John Kaiser. The IPV Chart allows speculators to identify which projects offer poor, fair or good speculative value in both absolute and relative terms. The speculative value depends on the project stage, the project's implied value as calculated by the company's fully diluted capitalization, stock price and net project interest, and the dream target deemed appropriate for the project. A dream target is what a project would be worth in discounted cash flow terms once in production. |
| Green background indicates the dream target judged appropriate for this play by John Kaiser - otherwise unranked. |
Poor Speculative Value -   |
Fair Speculative Value -  |
Good Speculative Value -   |
| Note: narrow arrows indicate IPV is outside the fair value channel but within 25% of the fair value limits |
| Click on the company name to view the company profile, the project name to view project details. |
| Click on the project icon if its background is shaded to get the IPV Chart for that company. |
| Ruby Creek |  | 100% WI | Canada | 8-Construction |
|---|
| Ruby Creek 43-101 Economic Study (USD except where noted otherwise) |
| FSU | Dec 1, 2007 |
| Golder Assoc. | Ruby Creek |
| Mining Scenario | TR | Mining Costs |
| Mining Type: | OP |
| Cost Currency: | CAD |
| Processing Type: |
|
| Capital Cost: | $640,000,000 |
| Operating Rate: | 23,000 tpd |
| Sustaining Cost: | $0 |
| Operating Days: | 365 |
| Operating Cost: | $13.08/t |
| Strip Rate: | 0.0 |
| BC Cash Cost per Unit: USD | $9.97/lb Mo |
| Mine Life: | 21 years |
| BC Cash Cost Net By-Products: USD | $9.97/lb Mo |
| LOM Tonnage: | 157,685,000 t |
| BC All-In Cost Net By-Prod: USD | $13.52/lb Mo |
| Est Startup: |
|
| Spot All-In Cost Net By-Prod: USD | $13.52/lb Mo |
| Production Potential |
| Metal 1 | Metal 2 | Metal 3 | Metal 4 |
| Metal: | Mo |
|
|
|
| Grade: | 0.06% |
|
|
|
| Recovery: | 81.7% |
|
|
|
| Annual Output: | 8,565,823 lb |
|
|
|
| LOM Output: | 179,882,273 lb |
|
|
|
| Base Case Price: | $18.00/lb |
|
|
|
| Spot Price: | $12.10/lb |
|
|
|
| Base Case NSR: | $18.37/t |
|
|
|
| Spot NSR: | $12.35/t |
|
|
|
| Base Case Valuation |
| Reported Valuation Currency: | USD |
| Pre-Tax NPV: | $295,000,000 |
| Discount Rate: | 8% |
| After-Tax NPV: |
|
| Total Base Case NSR USD: | $18.37/t |
| Pre-Tax IRR: | 19% |
| Total Spot NSR USD: | $12.35/t |
| After-Tax IRR: |
|
| Annual Pre-Tax Cash Flow Base Case and Net CF/FDSH USD: | $44,378,214 | $2.70 | Pre-Tax Payback: | 3.2 y |
| Annual Pre-Tax Cash Flow Spot and Net CF/FDSH USD: | ($6,160,142) | $0.72 | After-Tax Payback: |
|
| Enterprise Value CAD : | $3,148,068 | $.12/sh | Share Price: | $0.18 |
| Note: |
| Comparative Valuations using Life of Mine Averages |
| Discount Rate: | 0% | 5% | 10% | 15% |
| Base Case Pre-Tax NPV USD: | $805,050,586 | $366,341,426 | $88,675,972 | ($54,971,373) |
| Base Case Pre-Tax Net NPV/Sh USD: | $37.21 | $9.06 | $3.48 | ($7.02) |
| Premium BC PT NPV over EV: | $37.11 | $8.96 | $3.39 | ($7.12) |
| Spot Pre-Tax NPV USD: | ($256,254,884) | ($250,763,313) | ($308,679,290) | ($332,381,336) |
| Spot Pre-Tax Net NPV/Sh: | ($4.47) | ($15.17) | ($12.12) | ($17.92) |
| Premium Spot PT NPV over EV USD: | ($4.57) | ($15.27) | ($12.22) | ($18.01) |
| The comparative NPV calculations assume constant annual cash flow based on the life of mine average annual payable production and CapEx spent in year one. The operating cost includes the LOM sustaining capital. Due to details such as ore scheduling these NPV figures may differ from those of the 43-101 economic study. |
| After-Tax Valuations using Spot By-Product Prices |
 |
 |
|
| |
| | You can return to the Top of this page
|
|
