Miners renew interest in Nevada's molybdenum

For the first time in nearly two decades, mining companies are beginning to take a close look at molybdenum deposits in Nevada.

Silvery white and very hard,molybdenum is most commonly used in hardening steel.As the world economy strengthened particularly in China the price of molybdenum more than tripled to a recent $26 a pound from about $8 at the start of this year.

That grabbed the attention of mining companies.

"Nevada has some very well-documented molybdenum resources," says Russ Fields, president of the Nevada Mining Association.

Those deposits, he says, commonly are associated with historic copper-mining districts such as those around Ely,Yerington and Tonopah.

But mining companies aren't limiting their search to copper districts.

Sparks-based Golden Phoenix Minerals Corp., for instance, is developing its Ashdown project 110 miles northwest of Winnemucca as a combined molybdenum and gold mine but it's talking a lot more these days about its potential to produce molybdenum.

Test holes drilled around the property indicate that ores contain about 2.9 percent molybdenum.

That translates into a value of $1,508 a ton, says Steven Craig, vice president and chief geologist of Golden Phoenix.

Alan Coyner, administrator of the Nevada Division of Minerals, says that appears to be the most significant molybdenum work in the state now.

"That's someone taking advantage of this upward spike in prices," he says.

But the Sparks company isn't alone in pursuing molybdenum projects in northern Nevada.

Adanac Gold Corp., a company based at White Rock, British Columbia, announced a few days ago that it's buying a potential molybdenum property about 12 miles southeast of Gabbs in Nye County.

Idaho General Mines Inc.

of Spokane, meanwhile, has begun feasibility studies of mining a molybdenum property in Eureka County.

Robert Russell, president of Idaho General Mines, says the property was extensively explored during the 1980s when molybdenum prices had risen nearly $20 a pound, and the data from that drilling will help the company complete the first phase of a feasibility study within four months.

Russell says the company doesn't believe that molybdenum prices above $20 a pound are sustainable for long.

At the same time, he says, rising worldwide demand and the aging of several big mines should keep prices from falling to the $3- and $4-a-pound levels common a decade ago.

Like many other mining executives, Russell is highly optimistic about his company's prospects.

The Eureka County property, he says, some day might produce as much as 10 percent of the world's molybdenum.

"This is a growth market," he says."We're a small company with an elephant by the tail."

At the state division of minerals, however, Coyner cautions that it's still too early to tell whether the current spike in prices will last long enough to keep the interest in molybdenum from flagging.