Adanac Moly acquires Pine Nut, Cucomungo Mo deposits

2005-02-28 15:25 ET - News Release

Mr. Larry Reaugh reports

ADANAC PURCHASES TWO ADDITIONAL MOLYBDENUM DEPOSITS (MOLY @ $28.50(US)/lb)

Adanac Moly Corp.'s following two acquisitions are designed to augment the company's position as a developer of pure molybdenum properties.

Pine Nut molybdenum deposit (21 claims) located approximately 20 miles southeast of Carson City, Nev., in Douglas county.

The published grade and tonnage on pages 58 and 74 of the 1985 U.S. Bureau of Mine Circulation 903-5 and titled "Principal Deposits of Strategic and Critical Minerals of Nevada" are stated at 82 million tons grading 0.06 per cent Mo (approximately 98.4 million pounds). The property was diamond and rotary drilled by American Metals Climax Inc. in the mid-1960s. The purchase price is 250,000 shares of Adanac and a cash payment of $1,570 (U.S.). The property is subject to a 2-per-cent net smelter return, 50 per cent of which may be purchased for $2-million (U.S.).

Cucomungo molybdenum deposit (36 claims) located approximately 15 miles southwest of Lida in Esmeralda county, Nevada.

Past exploration consisted of the drilling of 52 core and rotary holes totalling 31,000 feet in the 1960s and 1970s by Bear Creek Mining, Molycorp, Geochemical Surveys Inc. and Duval Corp.

Publicly available industry documents report: "Several generations of exploration drilling have partially outlined two molybdenum deposits on the claims, the Basalt Cap and Roper Tunnel zones. The Basalt Cap zone contains a drill-indicated resource of approximately 30 million tons grading 0.11 per cent MoS2 (0.066 per cent Mo) (approximately 51.4 million pounds). Based upon somewhat conflicting historical data, the Roper Tunnel deposit contains a possible resource of nine million tons grading 0.125 to 0.250 per cent MoS2 (0.075 per cent to 0.150 per cent Mo) (approximately 13.5 to 27 million pounds) (John Prachnau, 1992, mining engineer and geologist).

The purchase price is 250,000 shares of Adanac and a cash payment of $7,450 (U.S.). The property is subject to a 2-per-cent NSR of which 50 per cent may be purchased for $2-million (U.S.).

B&C Springs molybdenum deposit

The company recently acquired the B&C Springs, Nevada, deposit consisting of 131 million tons grading 0.120 per cent Mo (approximately 314.4 million pounds). See news in Stockwatch dated Nov. 1, 2004.

Ruby Creek molybdenum deposit

The company continues to maintain its major focus on the advanced Ruby Creek project consisting of 151,971,000 tons grading 0.063 per cent Mo (approximately 191.5 million pounds) which is currently undergoing a National Instrument 43-101 resource calculation by Amec PLC.

In each of the above properties where historical estimates are referred to, the company has not been able to obtain enough of the original data and has not done the work necessary to verify the classification of the resource or reserve, the company is not treating them as a NI 43-101 defined resource or reserve verified by a qualified person, and the historical estimate should not be relied upon, except in the case of the Ruby Creek molybdenum project where the company has engaged Amec PLC to do a NI 43-101 study which is expected at the end of March, 2005.

The company's policy is to obtain advanced molybdenum projects free of royalty and option payments, thus enabling the company to use its treasury in building the value of its projects. The Pine Nut and Cucomungo acquisitions are subject to regulatory approval.

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