Adanac Moly Corp. - Secular Bull - Focused Investments

ADANAC'S RUBY CREEK MINING FEASIBILITY BOOSTS MOLYBDENUM PRODUCTION TO 68 MILLION LBS IN FIRST SIX YEARS

Adanac Moly Corp. has received Golder Associates Ltd.'s completed Ruby Creek mining feasibility, based on the updated resource estimates reported in Stockwatch on Feb. 16, 2006, and geotechnical information obtained from the 2005 field program.

Golder's proposed design includes five phases. The proposed open-pit design has been revised to mine phase 1 through phase 4, with the first phase cut-off grade increased from 0.040 per cent molybdenum to 0.060 per cent molybdenum to assist with increased molybdenum production in the initial years to facilitate rapid payback of capital costs. These data indicate an average mill feed grade of 0.079 per cent molybdenum for the first six years of operation, which translates to annual average production of 11.3 million pounds molybdenum (18.83 million pounds molybdenum disulphide).

The final phase 5 is marginal, based on a molybdenum price of $7 (U.S.) per pound, but can add over 20 million pounds molybdenum production and extend the mine life by four years. A decision to mine this phase would be made after the 13th year and would be based on the prevailing economic conditions at the time.

The revised updated design changes both capital and operating costs estimates as shown in the table below:

Comparison between mine capital and mine operating cost estimates (for 2006, and for 2005) -- all figures are in Canadian dollars unless otherwise indicated:

Factor         Feasibility   Preliminary

                             feasibility

                 (2006)        (2005)

Capital cost

(millions) (1)      31.2         26.5

Operating cost

(dollars per

tonne milled) (2)   2.44         3.14

Tonnage milled

(millions)          43.6         43.6

Grade (% Mo)

years (one

to six) (3)        0.079        0.076

Tonnage milled

(millions)         143.7        150.8

Grade (% Mo)       0.059        0.060

(mine life) (4)  (21 years)  (23 years)

Potential

phase 5 tonnage    24.66

(millions)

Grade (% Mo) (5)   0.043

(1) The $4.7-million increase (2006) is attributed to using more expensive 200-tonne trucks from the first year.

(2) The 70-cent decrease (2006) is attributed to lower hauling costs (larger trucks) and use of electric rope shovel after the fifth year.

(3) The report shows higher grade (0.092 per cent molybdenum) in the first 2-1/2 years (2006) and slightly higher grade (2006) over all in first six years.

(4) Contained pounds of molybdenum equal 186,912,600 (2006) and equal 199,472,200 (2005) at a mining cut-off grade of 0.040 per cent molybdenum.

(5) Potential additional contained pounds of molybdenum equal 23,381,000 (2006) at a mining cut-off grade of 0.040 per cent molybdenum.

Paul Palmer, PGeo, PEng, and Kirk Rodgers, PEng, both independent qualified persons as defined by NI-43-101, have supervised and co-ordinated Golder's mining feasibility work.

The Ruby Creek project is a proposed open-pit molybdenum mine situated 24 kilometres northeast of Atlin, B.C., which would operate at 20,000 tonnes per day of ore for over 20 years and have an overall footprint of approximately 830 hectares. The company believes that the proposed mine is a sound project that will minimize any long-term environmental effects and maximize socio-economic benefits to the local community, Taku River Tlingit First Nation and British Columbia.

We seek Safe Harbor.