It has been an interesting 12 months for molybdenum focused mining companies. Thompson Creek, one of the world's largest primary molybdenum producers, is an excellent case in point. During the commodity boom, the company was trading near record levels as the spot price for molybdenum tested USD 30 per pound. When the bubble began to burst in the second half of 2008, molybdenum prices were slow to react, with the more liquid metals like copper, nickel and iron ore moving sharply lower first. Molybdenum prices did catch up however, by summer 2009 spot prices were hovering around USD 10 per pound. The volatile prices were not surprisingly reflected in Thompson Creek's share price.
However, 2010 has started on a much brighter note for molybdenum producers. Thompson Creek’s share price has recovered from a 52 week low of just USD 2.69 to a high of USD 15.64 earlier this month, buoyed by more bullish analyst forecasts for molybdenum.
Just last month, JP Morgan analysts forecast that molybdenum would rise from around USD 15 per pound currently to USD 21 per pound by the end of the year, and could rise to USD 24 per pound by the end of 2011. For producers, this is clearly good news. But has the more bullish outlook for molybdenum prices trickled down to junior explorers or would be developers?
Strzelecki Metals is one of those companies, but recent moves by the company suggest this could all be about to change. Strzelecki is an unusual mining junior. Listed in Australia, the company has a handful of early stage projects scattered all over Australia and one substantially more advanced project in Poland called Myszkow.
Myszkow is clearly the flagship asset in the company’s portfolio, but as an Australian company, explaining to the natives why they should be interested in a relatively unknown project in Eastern Europe, is understandably difficult.
For this reason, Strzelecki hired Mr Andrew Zemek as Director of European Operations, who has previous experience in London’s AIM mining sector and is also native Polish speaker. Mr Zemek's appointment was followed by a concept study prepared by Coffey Mining for Myszkow.
Myszkow is a substantial molybdenum copper tungsten deposit with an inferred resource of 726 million tonnes. Within this huge resource lies a higher grade zone of 102 million tonnes at 0.17% molybdenum equivalent.
(Sourced from www.proactiveinvestors.com)
