Molybdenum continues downward trend
Email this article By Leia Michele Toovey- Exclusive to Moly Investing News
Despite the recent optimism across the metals sector, molybdenum prices are continuing on a downward trend. Last week, sluggish demand and high stockpiles caused European ferromolybdenum prices to drop below US $21 per kg. US market prices also slid, down to US $9.20 per lb, versus the earlier level of US $9.70 China’s export prices, although, were steady at US $23 per kg.
Molybdenum prices have been on a free fall since November, in concert with declining stainless steel demand. So far, the metal has shed 73 per cent of its value. In an effort to adjust the supply/demand balance, producers have mothballed the equivalent of 100 million new pounds of supply. Cutbacks have been somewhat effective in stabilizing the speed at which the metal has dropped; however declines are still occurring across the globe.
Company Developments
Nanika Resources Inc. (TSX. V:NKA) signed a Joint Venture Agreement with Palm Clean Energy Inc. and Daewon Chemical Co. Ltd. of South Korea. The new joint venture company formed by these partners will hold the continued exploration, development and mining right to the Lucky Ship molybdenum project in British Columbia. Pursuant to the Joint Venture Agreement, the Korean partners will be issued 40 per cent of the new joint venture company shares and Nanika will hold 60 per cent. The total payments by Korean partners to the “molybdenum project will total $5.0 million dollars, inclusive of private placements. Following the subsequent completion by the Korean partners of the junior financing needed for all reasonably estimated exploration costs to provide the information necessary to produce a bankable feasibility study in accordance with National Instrument 43-101 the Korean partners will be entitled to an option to 51 per cent of the shares of the joint venture company and Nanika will hold 49 per cent. This financing is to be completed within 24 months of the signing of the joint venture agreement.
Adanac Molybdenum Corporation (TSX: AU) has been granted an extension to its creditor protection. The application was filed on April 3, 2009, to the Supreme Court of British Columbia. The extension to the creditor protection will allow the company protection until July 3 2009. During this time, the company plans to continue to restructure, while it will remain protected from all claims and actions against the company and its assets. On July 3, 2009, the matter will be reviewed by the Court.
Largo Resources Ltd. (TSX .V:LGO) has acquired a 70 per cent interest in the Northern Dancer property in Yukon Territory pursuant to its previously announced option agreement. Largo has a right to earn the remaining 30 per cent interest in the property by making a cash payment of $5,000,000 or issuing the equivalent value in shares of the company within twelve months. Northern Dancer hosts widespread tungsten-molybdenum porphyry style mineralization.
Tags: bankable feasibility study, company developments, deposits, exploration, exports, feasibility, ferromolybdenum, investing in molybdenum, joint venture agreement, junior molybdenum stocks, juniors, metals, mineralization, molybdenum, molybdenum price, molybdenum prices, options, private placements, producers, project, property, resources
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April 7th, 2009 at 7:42 am
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