native groups but also to the entire area. If you don’t think that way, then you are going to have problems before you get going.

StockInterview: What steps will you have to take to begin production after you get your mining permits?

Larry Reaugh: Once the environmental permits are in, it’ll be construction. That will take about 18 months. That will be right from the ground up – from breaking the soil to laying the foundations to pre-stripping the pit to laying down the tailings pond and the waste dump site.

StockInterview: The molybdenum mining market is robust right now. Why should investors consider Adanac as opposed to other moly companies?

Larry Reaugh: If you go to our site, you will see that the bankable feasibility is calling for a three-year payback on a C$450 million investment. We believe that that is obtainable. The project is way ahead of its peers. I don’t think there’s anybody else that’s breaking ground this summer on a project

We interviewed Adanac Molybdenum executive chairman Larry Reaugh about the dozens of junior resource companies, which now proclaim they are part of the Molybdenum Bull Market. His company appears as a potential molybdenum producer on the horizon.

Since the beginning of this year, Reaugh’s company has been riding the ‘moly wave.’ Institutions and investors are climbing aboard as greater interest emerges in the silvery-white metal, which adds both hardness and anti-corrosive properties to everything from energy pipelines and nuclear power plant condensers to desalination plants, automotive parts and air pollution systems for coal-fired power plants.

We posed five questions to Larry Reaugh to help separate the hype from the reality of the current molybdenum mania.

StockInterview: Of all the molybdenum companies out there, how do you know which are going to become economic?

Larry Reaugh: You can really only tell once the bankable feasibility is done. The bankable really narrows down the resource itself into a reserve and that can change. It’s the only thing that can tell you with any assurance that a project can move ahead and make money. You should be able to take it to the bank, and they should finance you to go into production.

StockInterview: Please explain the timeline and the process to move a moly project from the resource stage all the way through the bankable feasibility and permitting stages.

Larry Reaugh: By the time you get to the resource stage, you should already have your baseline study and your environmental permitting started. You should have already made contact with all the various levels of government and stakeholders in the area to hire a qualified engineering firm – one that has impeccable credentials to do the pre-feasibility. And also apply for your mining lease at that time. Once the pre-feasibility is done, that gives you 30 to 40 percent certainty on the project. You take the results from those and then decide to move right into the feasibility of those if it’s at all positive. Eventually when you get into the bankable feasibility, then you have another 10 to 20 percent assurance that the project will bear fruit at the end of the day. A bankable feasibility gives you reserves. Once you get reserves, you can actually put a dollar number value to it. That gives you enough of a grounding to it in which to do the detailed mining That includes the mining plans for your piping, your water, your foundation layouts, your site plans. Every Nth degree of construction that’s going to take place in that plant has to be put on paper. That’s about a 13-month project and will cost you up to C$15 million. So, now you move it through the environmental stage. That can take up to 3.5 years.

StockInterview: Many mining projects around the world get stalled because of bad relationships with the native inhabitants. Please tell us about Adanac’s relationship with the First Nation of Canada.

Larry Reaugh: If you don’t have a good transparent relationship with the natives and the locals, and you don’t include them all the way through, you are not going to have ease of getting your social, economic and environmental permits done. When we got involved up there, the first thing that we did was contact the local band in the area. We met with the consul, basically gave them our plans. They brought in their consultants, and as each problem came up, we worked our way through it. They became a big part of working through to the solution. They know that there’s an impact benefits agreement that we will be negotiating over the next couple of months. Socially, this is a big economic boost for everybody in the area. If you can help them to raise their industry awareness in having off-spins from that mine – other industries that they can develop, then you are doing a good job of being a good corporate citizen, not just to the native groups but also to the entire area. If you don’t think that way, then you are going to have problems before you get going.

StockInterview: What steps will you have to take to begin production after you get your mining permits?

Larry Reaugh: Once the environmental permits are in, it’ll be construction. That will take about 18 months. That will be right from the ground up – from breaking the soil to laying the foundations to pre-stripping the pit to laying down the tailings pond and the waste dump site.

StockInterview: The molybdenum mining market is robust right now. Why should investors consider Adanac as opposed to other moly companies?

Larry Reaugh: If you go to our site, you will see that the bankable feasibility is calling for a three-year payback on a C$450 million investment. We believe that that is obtainable. The project is way ahead of its peers. I don’t think there’s anybody else that’s breaking ground this summer on a project

e. The bankable really narrows down the resource itself into a reserve and that can change. It’s the only thing that can tell you with any assurance that a project can move ahead and make money. You should be able to take it to the bank, and they should finance you to go into production.

StockInterview: Please explain the timeline and the process to move a moly project from the resource stage all the way through the bankable feasibility and permitting stages.

Larry Reaugh: By the time you get to the resource stage, you should already have your baseline study and your environmental permitting started. You should have already made contact with all the various levels of government and stakeholders in the area to hire a qualified engineering firm – one that has impeccable credentials to do the pre-feasibility. And also apply for your mining lease at that time. Once the pre-feasibility is done, that gives you 30 to 40 percent certainty on the project. You take the results from those and then decide to move right into the feasibility of those if it’s at all positive. Eventually when you get into the bankable feasibility, then you have another 10 to 20 percent assurance that the project will bear fruit at the end of the day. A bankable feasibility gives you reserves. Once you get reserves, you can actually put a dollar number value to it. That gives you enough of a grounding to it in which to do the detailed mining That includes the mining plans for your piping, your water, your foundation layouts, your site plans. Every Nth degree of construction that’s going to take place in that plant has to be put on paper. That’s about a 13-month project and will cost you up to C$15 million. So, now you move it through the environmental stage. That can take up to 3.5 years.

StockInterview: Many mining projects around the world get stalled because of bad relationships with the native inhabitants. Please tell us about Adanac’s relationship with the First Nation of Canada.

Larry Reaugh: If you don’t have a good transparent relationship with the natives and the locals, and you don’t include them all the way through, you are not going to have ease of getting your social, economic and environmental permits done. When we got involved up there, the first thing that we did was contact the local band in the area. We met with the consul, basically gave them our plans. They brought in their consultants, and as each problem came up, we worked our way through it. They became a big part of working through to the solution. They know that there’s an impact benefits agreement that we will be negotiating over the next couple of months. Socially, this is a big economic boost for everybody in the area. If you can help them to raise their industry awareness in having off-spins from that mine – other industries that they can develop, then you are doing a good job of being a good corporate citizen, not just to the native groups but also to the entire area. If you don’t think that way, then you are going to have problems before you get going.

StockInterview: What steps will you have to take to begin production after you get your mining permits?

Larry Reaugh: Once the environmental permits are in, it’ll be construction. That will take about 18 months. That will be right from the ground up – from breaking the soil to laying the foundations to pre-stripping the pit to laying down the tailings pond and the waste dump site.

StockInterview: The molybdenum mining market is robust right now. Why should investors consider Adanac as opposed to other moly companies?

Larry Reaugh: If you go to our site, you will see that the bankable feasibility is calling for a three-year payback on a C$450 million investment. We believe that that is obtainable. The project is way ahead of its peers. I don’t think there’s anybody else that’s breaking ground this summer on a project

he results from those and then decide to move right into the feasibility of those if it’s at all positive. Eventually when you get into the bankable feasibility, then you have another 10 to 20 percent assurance that the project will bear fruit at the end of the day. A bankable feasibility gives you reserves. Once you get reserves, you can actually put a dollar number value to it. That gives you enough of a grounding to it in which to do the detailed mining That includes the mining plans for your piping, your water, your foundation layouts, your site plans. Every Nth degree of construction that’s going to take place in that plant has to be put on paper. That’s about a 13-month project and will cost you up to C$15 million. So, now you move it through the environmental stage. That can take up to 3.5 years.

StockInterview: Many mining projects around the world get stalled because of bad relationships with the native inhabitants. Please tell us about Adanac’s relationship with the First Nation of Canada.

Larry Reaugh: If you don’t have a good transparent relationship with the natives and the locals, and you don’t include them all the way through, you are not going to have ease of getting your social, economic and environmental permits done. When we got involved up there, the first thing that we did was contact the local band in the area. We met with the consul, basically gave them our plans. They brought in their consultants, and as each problem came up, we worked our way through it. They became a big part of working through to the solution. They know that there’s an impact benefits agreement that we will be negotiating over the next couple of months. Socially, this is a big economic boost for everybody in the area. If you can help them to raise their industry awareness in having off-spins from that mine – other industries that they can develop, then you are doing a good job of being a good corporate citizen, not just to the native groups but also to the entire area. If you don’t think that way, then you are going to have problems before you get going.

StockInterview: What steps will you have to take to begin production after you get your mining permits?

Larry Reaugh: Once the environmental permits are in, it’ll be construction. That will take about 18 months. That will be right from the ground up – from breaking the soil to laying the foundations to pre-stripping the pit to laying down the tailings pond and the waste dump site.

StockInterview: The molybdenum mining market is robust right now. Why should investors consider Adanac as opposed to other moly companies?

Larry Reaugh: If you go to our site, you will see that the bankable feasibility is calling for a three-year payback on a C$450 million investment. We believe that that is obtainable. The project is way ahead of its peers. I don’t think there’s anybody else that’s breaking ground this summer on a project

nship with the First Nation of Canada.

Larry Reaugh: If you don’t have a good transparent relationship with the natives and the locals, and you don’t include them all the way through, you are not going to have ease of getting your social, economic and environmental permits done. When we got involved up there, the first thing that we did was contact the local band in the area. We met with the consul, basically gave them our plans. They brought in their consultants, and as each problem came up, we worked our way through it. They became a big part of working through to the solution. They know that there’s an impact benefits agreement that we will be negotiating over the next couple of months. Socially, this is a big economic boost for everybody in the area. If you can help them to raise their industry awareness in having off-spins from that mine – other industries that they can develop, then you are doing a good job of being a good corporate citizen, not just to the native groups but also to the entire area. If you don’t think that way, then you are going to have problems before you get going.

StockInterview: What steps will you have to take to begin production after you get your mining permits?

Larry Reaugh: Once the environmental permits are in, it’ll be construction. That will take about 18 months. That will be right from the ground up – from breaking the soil to laying the foundations to pre-stripping the pit to laying down the tailings pond and the waste dump site.

StockInterview: The molybdenum mining market is robust right now. Why should investors consider Adanac as opposed to other moly companies?

Larry Reaugh: If you go to our site, you will see that the bankable feasibility is calling for a three-year payback on a C$450 million investment. We believe that that is obtainable. The project is way ahead of its peers. I don’t think there’s anybody else that’s breaking ground this summer on a project

native groups but also to the entire area. If you don’t think that way, then you are going to have problems before you get going.

StockInterview: What steps will you have to take to begin production after you get your mining permits?

Larry Reaugh: Once the environmental permits are in, it’ll be construction. That will take about 18 months. That will be right from the ground up – from breaking the soil to laying the foundations to pre-stripping the pit to laying down the tailings pond and the waste dump site.

StockInterview: The molybdenum mining market is robust right now. Why should investors consider Adanac as opposed to other moly companies?

Larry Reaugh: If you go to our site, you will see that the bankable feasibility is calling for a three-year payback on a C$450 million investment. We believe that that is obtainable. The project is way ahead of its peers. I don’t think there’s anybody else that’s breaking ground this summer on a project of this size. Here’s a company that’s trading at a very low market cap, which leaves a very great entry point for a mine that could be producing by the last quarter of 2008 and certainly full production by the first quarter of 2009.