March 6, 2006

Ruby Creek mine report details plans for managing tailings, ensuring water quality

A feasibility design report on the tailings facility, waste dumps and site water management structures for Adanac Moly's proposed Ruby Creek molybdenum mine project near Atlin, BC details the plans and facilities that will help minimize the project's environmental impacts.

Designed to produce 20,000 tonnes per day of ore for 20-plus years, the open pit will mine have an overall footprint of approximately 830 hectares and will generate an estimated 30 million tonnes of potentially acid-generating waste rock from the open pit.

The report by the consulting engineering firm Klohn Crippen Berger (Klohn) says mill tailings will be relatively coarse, with fines content ranging from 26 to 33%. Tests on tailings from an existing mill and waste rock dumps have shown very low levels of sulfide (0.01 to 0.03%) and have indicated a low potential for these materials to produce acidic conditions that could release metals into solution. The report also points out that the tailings from pilot plant work done at the Ruby Creek site in 1969-70 have remained in a neutral state for more than 35 years.

Klohn has designed a tailings dam to impound all mill tailings produced from operation. This material will be submerged within the impoundment.

Non-acid generating waste rock and overburden will be placed in small dumps in the valleys above the open pit and in a large main dump at the upper end of the tailings facility. Diversion ditches are planned to divert runoff water around the dumps and tailings impoundment.

Final reclamation is scheduled during the latter years of operation when the low-grade stockpiles will likely be milled.

A compacted, cycloned sand tailings dam will be built across Ruby Creek downstream of the mill. Plans include reclaiming free water from the tailings pond for re-use to the maximum extent possible in order to minimize the volume of stored water at the mill.

A seepage recovery dam, constructed downstream of the tailings dam, will serve to trap seepage through the dam and sediment transported by runoff. Most of the recovery water collected will be pumped back into the tailings facility. Some recovery water may be released if discharge criteria can be achieved.

Any tailings water to be discharged will be done mostly during spring runoff when the dilution ratios are sufficient such that concentrations will meet permitted discharge limits, notes the report. Stringent testing of expected tailings supernatant water (from metallurgical test work samples in 2005) showed most parameters to be within the limits set by BC's water quality guidelines for the protection of freshwater aquatic life. Iron and aluminum were the only parameters whose median values exceeded the guideline limits.

The preparation of the Klohn report was overseen by consulting engineer Howard Plewes, who visited the site in June 2005 and is an independent qualified person in accordance with National Instrument 43-101 (Standards of Disclosure for Mineral Projects under British Columbia's Securities Act).

Adanac Moly said it expects to receive the Section 11 order from the BC government shortly, clearing the way for the firm to apply for its environmental assessment certificate (EAC). The company believes its plans for the proposed mine will minimize any long-term environmental effects while providing significant socio-economic benefits to the local community, the Taku River Tlingit First Nation and British Columbia.

More information is available from Larry Reaugh, president and CEO, Adanac Moly, 604/531-9639, FAX 604/531-9634, E-mail, Web site

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