Sydney, Apr 11, 2006 (ABN Newswire) - The Board of Moly Mines Limited (ASX: MOL) is pleased to announce it has decided to pursue the divestment of the Company's New South Wales gold assets ("Gold Assets") by way of either a trade sale or a separate IPO on the ASX.
This decision results from the Company's primary focus having shifted to the very large Spinifex Ridge Molybdenum Project in the Pilbara Region of Western Australia.
Moly Mines is finalising the appointment of an independent advisor to the Company on the conduct of the sale or IPO process which is expected to complete within 8 - 12 weeks.
Moly Mines listed in March 2004 with the Gold Assets as its primary focus. The Gold Assets that the Company now holds are the same 6 projects it held at the time of the IPO. Since listing, drilling by the Company on three of the projects, namely Dargues Reef, Christmas Gift and Booths Reward has met with considerable success.
At the time of listing and based on the Gold Assets the Company had a fully diluted market capitalisation of approximately $23M. Since then the value of the properties has been enhanced by the successful drilling programmes and by the escalation in the world gold price.
To date the Company has spent approximately $2.5 million on the Gold Assets with particular focus on the still under-explored Dargues Reef deposit at Majors Creek where to date a JORC compliant Resource of 360,000 ounces at 3.0g/t has been identified.
A Scoping Study is currently underway at Dargues Reef considering both underground and open pit mining scenarios. Drilling programs for the 2006 calendar year are aimed at expanding the resource to +500,000 ounces. Both diamond and RC drilling programmes are also currently underway at Christmas Gift and Booths Reward.
The Gold Assets
Dargues Reef, Majors Creek
The Majors Creek project, which contains the Dargues Reef prospect, is located approximately 60kms east of Canberra, and 12kms south of Braidwood in the southern tableland region of NSW. The Majors Creek project, consists of three adjoining exploration licences and one mining lease (Dargues Reef).
In November 2005, the Company announced its first JORC compliant Inferred Resource at Dargues Reef of 3,720,000 tonnes @ 3.0 g/t Au for 360,000 oz. The Inferred Resource represents a 750% increase in the contained ounces over the estimation presented in the Company's IPO and it has been achieved at a low discovery cost of $3.75 per ounce gold.
As a result of the exploration success at Dargues Reef the Company has significantly expanded its Majors Creek land holding to cover the majority of the gold prospective Braidwood Granodiorite. The tenements now cover over 700 square kilometres.
A detailed infill diamond drilling program is planned for Dargues Reef on a 50m by 50m drill spacing that will provide essential mine planning, engineering and metallurgical data for the scoping studies. As well the mineralised vein system remains open at depth and along strike to the west.
RC drilling is planned elsewhere on the remaining Majors Creek tenure following up significant gold anomolies identified by regional soil sampling, mapping and rock chip sampling campaigns.
Christmas Gift
Christmas Gift is located 180kms north-west of Canberra and 15kms east of Cootamundra, 420km of south-west of Sydney.
A four hole reverse circulation (RC) drilling program in early 2005 returned excellent intersections including 7m @ 9.7g/t Au, 5m @ 5.0g/t Au, 8m @ 6.9g/t Au and 4m @ 2.1g/t Au.
A diamond drilling programme is currently underway.
Booths Reward
Booths Reward is located 170kms north-west of Canberra and 25kms south-east of Cootamundra in central NSW. A first-pass, three hole reverse circulation (RC) drilling program returned 4m @ 6.1g/t Au, 2m @ 7.1/t Au and 6m @ 7.0g/t Au
Regional mapping programs and soil sampling during 2005 identified further target areas that are currently the subject of an RC and diamond drilling program.
New South Wales Gold Assets
Project Tenement
Dargues Reef ML103
Majors Creek EL6003, EL6138, EL6351, EL6462
Christmas Gift EL6010
Booths Reward EL6012, EL6445
Temora / Sebastapol EL6011
Nundle EL6004, EL6118
Windera EL6161
