August 15, 2005

Mining firm reports on designs for water, waste facilities at Ruby Creek project

Adanac Moly recently received a preliminary design report on the tailings facility, waste disposal sites and site water management for its proposed Ruby Creek molybdenum project in northern British Columbia. The report, by the engineering consulting firm Klohn Crippen, outlines design features aimed at minimizing the project's environmental impacts.

The tailings storage facility will be created downstream from the mill by construction of a compacted cyclone sand tailings dam across Ruby Creek. Water reclamation from the tailings disposal facility back to the mill will be maximized to reduce the volume of stored water.

The tailings, in slurry form, will be transported through a pipeline from the plant site to the impoundment area, at a rate of about 20,000 tonnes of solids per day. Free water will be reclaimed from the pond by a floating pump-barge and returned to the mill in a pipeline.

The consultants' preliminary analysis of the tailings solids geochemistry has found that the Ruby Creek tailings' Naturalization Potential Ratio (NPR) is greater than 10. This means that there is virtually no likelihood that the tailings will generate acid rock drainage (ARD), given that an NPR rating greater than 2 indicates a low possibility of generating ARD and an NPR value higher than 4 is deemed to have no potential to generate ARD.

The predicted non-acid-generation of the tailings is supported by the performance of an existing pilot-scale tailings facility which has remained in a neutral state for 25 years. This report concludes that the tailings will not be net acid-producing during operations and long-term closure.

Waste rock will be deposited in small disposal sites located in valleys above the open pit and in a large main site east of the open pit within the upper end of the tailings facility. The low-grade ore stockpile will be integrated with the larger waste disposal site near the mill.

Preliminary results show that in general, the waste rock at Ruby Creek is not potentially ARD-generating. The maximum sulfide content within the waste rock samples tested so far is low. The median NPR values for almost all of the rock groups classify them as non-acid generating. One rock group shows median NPR values indicating that it has a low possibility of generating ARD. Further test work is being performed to fully assess the ARD potential from this rock group.

Surface water management plans call for two major diversions which will route natural surface water runoff around the tailings disposal facility. Both ditches will originate above the pit area and run generally parallel to Ruby Creek on both sides of the valley along the flanks of the surrounding hillsides, rejoining Ruby Creek downstream of the seepage recovery pond. Freshwater supply will be obtained from a dam reservoir that forms part of the surface water diversion scheme.

The consultants have estimated the capital cost of the tailings dam at approximately $62 million (Cdn), allowing a preliminary feasibility cost estimate range of plus or minus 25%.

Preparation of the report, "Preliminary Feasibility Design of Tailings Facility, Waste Dumps and Site Water Management," was supervised by Klohn Crippen project manager Howard Plewes, an independent qualified person as defined by NI 43-101.

Adanac Moly's Ruby Creek project is a proposed open pit molybdenum mine 24 kilometres northeast of Atlin, BC. It would operate at 20,000 tonnes per day of ore for 20 plus years and have an overall footprint of approximately 830 hectares.

More information is available from Larry Reaugh, president and CEO, 604/531-9639, FAX 604/531-9634, E-mail info@adanacmoly.com Web site www.AdanacMoly.com.

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