Creston Moly Corp. announces a positive pre-feasibility study for its Mexican Molybdenum Project



    VANCOUVER, Feb. 18 /CNW Telbec/ - Creston Moly Corp. ("Creston" or the
"Company") (TSX-V: CMS) announces that it has received a Pre-feasibility Study
("PFS") on its wholly-owned Creston Molybdenum Deposit (Creston Project)
located in Sonora, Mexico. The independent PFS, prepared by M3 Engineering &
Technology Corporation of Tucson, Arizona ("M3"), estimates production,
capital and operating cost parameters along with project economics, and
considers both owner and contract mining scenarios. The Company will continue
to evaluate which scenario is most advantageous.

    
    Highlights of the Pre-Feasibility Study and Base Case Mine Plan include:

    (All amounts are in US$ unless otherwise stated.)

    - A pre-tax Net Present Value ("NPV") at an 8% discount rate of
      $465.3 million with contract mining and $502.9 million with owner
      mining;
    - A pre-tax Internal Rate of Return ("IRR") of 28.2% with contract mining
      and 27.2% with owner mining;
    - Annual molybdenum and copper production of approximately 20 million
      pounds and 12 million pounds respectively from processing of 40k tonnes
      per day (ktpd) of ore;
    - Direct costs, inclusive of copper byproduct credits, of $6.57 per lb
      of Mo equivalent with contract mining and $5.74 per lb with owner
      mining ($15/lb Mo and $1.75/lb Cu);
    - An estimated initial capital expenditure of $511.6 million utilizing
      contract mining and $576.2 million with owner mining.

    Financial Evaluation

    Financial evaluations of the project have been made for both owner mining
and contract mining scenarios. In addition the study has examined the
sensitivity of the project value to changes in metal prices. The metals prices
for the base case are established as $15.00 per pound for molybdenum and $1.75
per pound for copper. As of January 2009 the historic 3-year rolling average
prices for molybdenum and copper were $28.67 per pound and $3.12 per pound
respectively. Current prices for molybdenum and copper are $9.10 per pound and
$1.45 per pound respectively (Feb. 17, 2009). Therefore, a lower forecast
seems to be more appropriate in the current market environment.
    Creston performed a survey of banks and financial institutions during the
4th quarter 2008 and the 1st quarter 2009, to obtain their short and long term
projections for molybdenum and copper prices. Fourteen provided molybdenum
forecasts and twenty-one provided copper forecasts. A few banks submitted
projections for one or two years, but most projected out to 10 years. The
forecast average for molybdenum for 2009 to 2018 was $14.37 per pound,
including those given by companies that only forecasted one or two years. The
average of all surveyed companies for the next three years (2009, 2010 and
2011) is $17.42. The projected average for copper for 2009 to 2018 was $2.18
per pound, including those companies that only forecasted one or two years.
The average of all forecasts for the next three years (2009, 2010 and 2011) is
$2.19.


    Table 1 - Financial Highlights -      Table 1a - Financial Highlights -
    Contract Mining                       Owner Mining

    ----------------------------------    ----------------------------------
    Capital Cost                          Capital Cost
     Payback Period          3.6 Years     Payback Period          3.6 Years
    ----------------------------------    ----------------------------------
    Initial Capital                       Initial Capital
     Investment (000's)       $511,601     Investment (000's)       $576,241
    ----------------------------------    ----------------------------------

    ----------------------------------    ----------------------------------
    Mine Life                 11 years     Mine Life                11 years
    ----------------------------------    ----------------------------------
    Total Ore                             Total Ore
     Processed (000's)  146,705 tonnes     Processed (000's)  146,705 tonnes
    ----------------------------------    ----------------------------------
    Mill Throughput             40,000     Mill Throughput            40,000
                            tonnes/day                            tonnes/day
    ----------------------------------    ----------------------------------

    ----------------------------------    ----------------------------------
    Molybdenum Price         (US$15/lb)    Molybdenum Price        (US$15/lb)
    ----------------------------------    ----------------------------------
    Copper Price           (US$1.75/lb)    Copper Price          (US$1.75/lb)
    ----------------------------------    ----------------------------------


                Table 2- Net Present Values - Contract Mining
               (based on 100% equity, $15/lb Mo, $1.75/lb Cu)

       -----------------------------------------------------------------
                          IRR        NPV 0%        NPV 8%       NPV 10%
                           (%)   ($ Million)   ($ Million)   ($ Million)
       -----------------------------------------------------------------
       Pre-tax           28.2         1,004         465.3         379.7
       -----------------------------------------------------------------
       After-tax         21.0         707.3         285.2         218.8
       -----------------------------------------------------------------


                 Table 2a - Net Present Values - Owner Mining
               (based on 100% equity, $15/lb Mo, $1.75/lb Cu)

       -----------------------------------------------------------------
                          IRR        NPV 0%        NPV 8%       NPV 10%
                           (%)   ($ Million)   ($ Million)   ($ Million)
       -----------------------------------------------------------------
       Pre-tax           27.2         1,104         502.9         407.8
       -----------------------------------------------------------------
       After-tax         20.2         780.0         306.0         231.9
       -----------------------------------------------------------------


    The Pre-Feasibility Study also stated after-tax NPV values under flat
price scenarios. Flat price sensitivities on an after-tax discounted basis are
presented in Tables 3 & 3a below.

    Table 3 -Flat Price                   Table 3a -Flat Price
    Sensitivities - Contract Mining       Sensitivities - Owner Mining
    (After-tax discounted basis)          (After-tax discounted basis)
    ----------------------------------    ----------------------------------
      Mo $     NPV 8%   NPV 10%    IRR      Mo $     NPV 8%   NPV 10%    IRR
    per lb         ($        ($     (%)   per lb         ($        ($     (%)
              Million)  Million)                    Million)  Million)
    ----------------------------------    ----------------------------------
    $12.50       62.7      22.0   11.2    $12.50       83.6      35.1   11.7
    ----------------------------------    ----------------------------------
    $15.00      285.2     218.8   21.0    $15.00      306.0     231.9   20.2
    ----------------------------------    ----------------------------------
    $20.00      730.2     612.4   36.5    $20.00      751.0     625.4   34.0
    ----------------------------------    ----------------------------------


    Capital and Operating Costs

    Total initial capital investment in the project is estimated to be $511.6
million utilizing contract mining and $576.2 million under the owner mining
scenario, which represents the total direct and indirect cost for the complete
development of the project. The life-of-mine sustaining capital for the
processing plant is estimated to be $22.7 million with contract mining and
$56.2 million with owner mining.

                 Table 4 - Operating Costs - Contract Mining
                      (based on $15/lb Mo, $1.75/lb Cu)

    -------------------------------------------------------------------------
                                                                        $/Mo
                           Includes                            equivalent lb
    -------------------------------------------------------------------------
    Mining                 Contractor services and mine general        $2.19
                           services
    -------------------------------------------------------------------------
    Milling                Processing, site power, maintenance,        $3.91
                           environmental
    -------------------------------------------------------------------------
    General and            Management, employee transportation,        $0.47
     Administration        camp costs
    -------------------------------------------------------------------------
    Total Operating Costs                                              $6.57
    -------------------------------------------------------------------------


                  Table 4a - Operating Costs - Owner Mining
                      (based on $15/lb Mo, $1.75/lb Cu)

    -------------------------------------------------------------------------
                                                                        $/Mo
                                Includes                       equivalent lb
    -------------------------------------------------------------------------
    Mining                 Drilling, blasting, haul, mine              $1.36
                           support & general services
    -------------------------------------------------------------------------
    Milling                Processing, site power, maintenance,        $3.91
                           environmental
    -------------------------------------------------------------------------
    General and            Management, employee transportation,        $0.47
     Administration        camp costs
    -------------------------------------------------------------------------
    Total Operating Costs                                              $5.74
    -------------------------------------------------------------------------


    "We are extremely pleased with the results of M3's pre-feasibility study
on the Creston Molybdenum Deposit and believe the project will contribute
greatly to the socio-economic growth of the communities of San Miguel Valley,
the State of Sonora, and Mexico," said J. George, President and CEO of
Creston.
    C.K. Benner, Chairman of the Company added, "Management intends to
continue to advance the project in order to position the Company for a
resurgent market. While in the short term it remains a challenge to acquire
adequate financing for good mining projects, this will change. We remain
confident that the Creston Project is one of the most viable primary
molybdenum projects in the Americas and we want the project poised to take
full advantage of the healthier base metals markets when they arrive."

    Development Plan

    The Creston Molybdenum Deposit has been planned as a conventional open-pit
mining operation. The average stripping ratio is estimated at 1.23 to 1 (waste
to ore) over the life of mine.
    The grade of ore processed from the mine in the first five years will
average 0.088% Mo and the average grade processed for the life of mine is
expected to be 0.077% Mo. The project will produce 219 million pounds of
molybdenum and 129 million pounds of copper over a 11 year mine life. As well
there is an opportunity to extend the life of the project by increasing the
overall resources in the Main Zone and through continuing evaluation,
exploration and assessment of the Red Hill and Alejandra Zones.

    Mineral Reserves and Resources

    In accordance with National Instrument 43-101 - Standards of Disclosure
for Mineral Projects of the Canadian Securities Administrators, the Company
has delineated proven and probable reserves and measured, indicated and
inferred mineral resources.
    The Creston Molybdenum Deposit's reserves and resources, as determined in
accordance with National Instrument 43-101, are illustrated in Tables 5 and 6
below.

    Table 5 - Proven and Probable Reserves and In-Pit Inferred Resources

    The Creston Molybdenum Deposit contains the following mineral reserves and
inferred resources at a 0.035% Mo equivalent(*) cut-off grade:

    -------------------------------------------------------------------------
                              Tonnes        Mo    lbs Mo       Cu     lbs Cu
    Category                  (000's)       (%)   (000's)      (%)    (000's)
    --------                  -------       ---   -------      ---    -------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Proven Reserves           44,736     0.079    78,024    0.053     52,217
    -------------------------------------------------------------------------
    Probable Reserves        101,968     0.076   171,924    0.047    106,614
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Proven and probable
     reserves                146,705     0.077   249,948    0.049    158,831
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    In-pit Inferred
     Resources                 8,718     0.065    12,464    0.063     12,158
    -------------------------------------------------------------------------
    (*)Mo equivalent: Mo% + (Cu%/7.5)


    Table 6 - Mineral Resources

    The Creston Molybdenum Deposit contains the following mineral resources at
a 0.03% Mo equivalent(*) cut-off grade:

    -------------------------------------------------------------------------
                              Tonnes        Mo    lbs Mo       Cu     lbs Cu
    Category                  (000's)       (%)   (000's)      (%)    (000's)
    --------                  -------       ---   -------      ---    -------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Measured                  52,240     0.074    85,490    0.050     58,080
    -------------------------------------------------------------------------
    Indicated                124,650     0.070   192,720    0.044    121,060
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total (M + I)            176,890     0.071   278,210    0.046    179,140
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Inferred                  16,300     0.051    18,320    0.061     21,860
    -------------------------------------------------------------------------
    (*)Mo equivalent:  Mo% + (Cu%/7.5)


    1 The mineral resources referred to herein have been estimated in a
      NI 43-101 technical report (the "MDA Report") prepared for the Company
      in December 2008 by Mine Development Associates ("MDA"). The person
      responsible for the resource estimate on behalf of MDA is Michael
      Gustin, P.Geo, and a Qualified Person for the purposes of National
      Instrument 43-101.The MDA Report is available at www.sedar.com.

    2 Proven and probable reserves are included in the statement of
      resources.


    Opportunities

    1) M3 notes that the economics in the PFS do not take into account
       opportunities for improvement based on the potential for:
         - Increasing the overall resource
         - Refined engineering during the bankable feasibility study
         - Silver (Ag) credits to be evaluated
         - Capital cost savings generated by purchasing used equipment
    2) The economic downturn has provided a number of unforeseen
       opportunities, such as improved availability and lower pricing of new
       equipment, construction materials and fuel.

    Going Forward

    The Company will continue to prudently advance the Creston Molybdenum
Deposit. In view of the state of the present financial markets, work on the
Bankable Feasibility Study will continue, but will be done in a measured and
cash conservative manner.
    The Company will continue exploration of the Red Hill and Alejandra Zones
with the objective of increasing the overall molybdenum resource of the
project. Efforts will also be focused on the opportunities that exist in other
areas such as the potential for silver (Ag) credits.
    A 43-101 compliant report titled "Technical Report, Creston Moly Project,
Pre-Feasibility Study, Sonora, Mexico" will be filed on SEDAR at www.sedar.com
within 45 days of this news release and will also be made available on
Creston's website at www.crestonmoly.com.

    Conference Call

    Creston Moly Corp. will hold a conference call on February 20, 2009 at 8
am Pacific Time (11 am Eastern Time) to discuss the Creston Molybdenum Deposit
Pre-Feasibility Study Report. To access the conference call, please dial:

    Toronto: 416-644-3434
    Canada & USA Toll Free: 1-800-587-1893
    Outside of Canada & USA: Please dial the Toronto number: 416-644-3434

    Replay

    The replay will be available from Friday February 20th at 2:00pm ET until
Saturday February 28th at 11:59pm ET.
    Replay numbers: The replay of the conference call will be accessible by
dialing 416-640-1917 (Toronto) or 1-877-289-8525 (Toll Free) and entering
passcode 21297559#.
    An archived recording of the conference call will be available on the
Company's website at www.crestonmoly.com.

    Qualified Persons

    M3, a full service Engineering, Procurement, Construction & Management
(EPCM) firm, is recognized for its experience and capabilities in the
development and construction of mines and mineral processing plants. The
executive summary of the M3 pre-feasibility study will be posted on the
Company's website (www.crestonmoly.com ) as well as on Sedar in the near
future.
    Lee A. Becker, P.E. of M3 is the qualified person responsible for the
scientific and technical overview in this news release in accordance with NI
43-101. Michael Gustin, P.Geo of Mine Development Associates is the qualified
person responsible for the preparation of the mineral resource estimate
summarized in this news release in accordance with NI 43-101. Thomas Dyer,
P.E. of Mine Development Associates is the qualified person responsible for
the preparation of the mineral reserve estimate.

    The following companies also contributed to the pre-feasibility study:

    - Mine Development Associates ("MDA") - Reserves & Resources and
      Mine plan
    - SRK Consulting (US) Inc. - Environmental Geochemistry
    - Golder Associates Inc. - Pit Slope & Tailings Management
    - Metcon Research - Metallurgical Study
    - SGS Lakefield Research Limited - Comminution Testing
    - Phillips Enterprises, LLC - Comminution Testing
    - G&T Metallurgical Services Ltd. - Modal Analysis
    - Pocock Industrial Inc. - Solid-Liquid Separation Study
    - IDEAS (Dr. Miguel Rangel) - Hydrogeological Evaluation
    - Lizarraga and Leal - Bat Study
    

    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy and accuracy of this release.

    Forward Looking Statements: The above contains forward looking statements
that are subject to a number of known and unknown risks, uncertainties and
other factors that may cause actual results to differ materially from those
anticipated in our forward looking statements. Factors that could cause such
differences include: changes in world commodity markets, equity markets, costs
and supply of materials relevant to the mining industry, change in government,
and changes to regulations affecting the mining industry. Forward-looking
statements in this release include statements regarding future exploration
programs, operation plans, geological interpretations, mineral tenure issues,
and mineral recovery processes. Although we believe the expectations reflected
in our forward looking statements are reasonable, results may vary, and we
cannot guarantee future results, levels of activity, performance, or
achievements.




For further information:

For further information: Mr. Jonathan George; Mr. John McCleery, (604)
694-0005, (604) 684-9365 (FAX), www.crestonmoly.com; Renmark Financial
Communications Inc.: Christine Stewart, cstewart@renmarkfinancial.com; Eric
St-Pierre, estpierre@renmarkfinancial.com; Media: Vanessa Napoli,
vnapoli@renmarkfinancial.com; Toronto: (416) 644-2020, Fax: (416) 644-2021;
Montreal: (514) 939-3989, Fax: (514) 939-3717; www.renmarkfinancial.com

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