Adanac Moly Corp. - Secular Bull - Focused Investments

ADANAC'S RUBY CREEK PROCESS & INFRASTRUCTURE FEASIBILITY SHOW REDUCED CAPITAL AND OPERATING COSTS

Adanac Moly Corp. confirms that Wardrop Engineering Inc. has completed the Ruby Creek molybdenum project's process and infrastructure design to feasibility level.

Capital costs for the proposed 20,000-tonne-per-day concentrator, associated infrastructure, water supply and tailings facility are estimated to be $364.4-million, including a 15-per-cent contingency. Processing, infrastructure and general administration operating costs are determined to be $7.76 per tonne for the first five years, based on diesel-generated power, and $5.20 per tonne thereafter upon connection to grid power. The capital and operating costs are lower than those estimated in the preliminary feasibility and are presented below.

TABLE 1: CAPITAL AND OPERATING

       COST ESTIMATES COMPARISON

            (2006 and 2005)

                  Preliminary

           Feasi-    feasi-    Reduction

Costs      bility    bility     (2005 to

($)        (2006)    (2005)        2006)

Capital

(millions)   364.4      378.7       14.3

Operating

($/tonne

milled) --

years (one

to five)      7.76       7.99       0.23

Operating

($/tonne

milled) --

years (six

and up)       5.20       7.99       2.79

The process design is based on extensive bench scale testing of drill core samples from the 2004 and 2005 exploration work that were carefully selected to include proportional amounts of lithologies expected in mill feed during the mine life. Additional testing has confirmed and expanded the work reported in the preliminary feasibility, and confirmed that a premium-grade molybdenite concentrate grading between 90 per cent and 92 per cent MoS2 can be produced. Over all, Mo recovery of 90 per cent or better is expected using a conventional crushing, grinding and flotation process.

Wardrop's work also includes the results of testwork done to evaluate potential technical and economic benefits of using high-pressure grinding rolls (HPGR) in place of conventional SAG milling. These tests demonstrated that the technology is suitable for Ruby Creek material and that a reduction of 30 per cent of the power used in the grinding circuit is achievable. This amounts to more than three kilowatts per hour per tonne milled. In addition, an average 5-per-cent increase in mill availability, adding 400,000 tonnes annual milling capacity, could be attained. Together, these factors can bring about a significant increase in project margins. Wardrop recommends that the HPGR option be developed further to detailed engineering design.

Rick Alexander, PEng, an independent qualified person as defined by National Instrument 43-101, has supervised and co-ordinated Wardrop's work on the Ruby Creek molybdenum project.

Wardrop has been commissioned to prepare the overall NI 43-101 compliant feasibility report, which is expected later this month.

Adanac's Ruby Creek project is a proposed open-pit molybdenum mine near Atlin, B.C. It is being developed to operate at 20,000 tonnes via the concentrator per day for more than 20 years. The company believes this is a sound project, with minimal long-term environmental effects and significant positive socio-economic benefits to the local community, Taku River Tlingit First Nation people, and the province of British Columbia.

This news release was prepared by John W. Fisher, CEng, PEng, and a qualified person pursuant to National Instrument 43-101.

We seek Safe Harbor.