RUBY CREEK UPDATE: PROJECT ENTERS ENVIRONMENTAL ASSESSMENT REVIEW PROCESS. COMPANY APPLIES FOR MINING LEASE

 

August 30, 2006 - Vancouver, British Columbia  

 

 

Adanac Moly Corp (TSX.V: AUA, Frank: A9N) (“ADANAC”), is pleased to announce the completion of the first phase of its 2006 drill programme on the Ruby Creek Molybdenum Project, located 34 kilometres NE of Atlin, British Columbia. It has drilled thirteen holes, for a total depth of 2,688 metres in the Phase 1 pit of the proposed mine, as defined by Golder Associates in 2005 (see Press Release dated March 6th 2006).  The site underlies the floor of the Ruby Creek valley and includes a relatively high-grade part of the deposit that was identified and drilled by Kerr Addison Mines Ltd. (1968 – 1972) and Placer Development Ltd (1979 – 1980). Most of the early drilling was vertical and both companies describe coarse-grained molybdenite in relatively flat-lying veins. Kerr Addison drove an adit and cross-cut through the higher-grade zone in 1970 and collected a bulk sample that it processed on site. The company was looking for a better understanding of the “nugget effect” caused by the coarse molybdenite crystals. 

 

The 2006 holes were drilled to improve definition of the higher-grade zone, obtain material for metallurgical test work, and evaluate the significance of mineralization in near-vertical quartz veins and fractures found in the vicinity of the underground workings. They were drilled in a westerly direction, at an angle of -50 degrees and intercepted molybdenite-bearing quartz veins and fractures ranging in orientation from sub-horizontal to subvertical. Adanac Moly Corp has contracted with Golder Associates to probe and scan the drill-holes using a state of the art optical televiewer, and calculate the actual orientations of the mineralized veins and fractures. That part of the programme is on-going. 

 

To date, the company has received assays for six holes (A-06-356 to A-06-361; see table, attached). Of these, three (A-06-257, A-06-359 and A-06-361) were collared in the higher-grade zone. The others were drilled south of Ruby Creek, distal to it. The holes encountered similar geology and mineralization to that described by Kerr Addison and Placer Development, with the exception that the higher-grade zone holes appear to contain near-vertical veins that may not have been properly represented in the earlier drilling. 

 

Drill-hole A-06-357 was collared close to but slightly to the east of Kerr Addison’s cross-cut. Drill-hole A-06-359 was collared 25 metres southwest of A-06-357, immediately above the underground workings. It tested ground to the west of the cross-cut. Drill-hole A-06-361 was collared east of the cross-cut and 180 metres due north of A-06-359.

 

The core from A-06-359 assayed 0.085% Mo over 182.9 metres, between 36.6 and 219.4 metres. However, it also contained higher-grade sections, from 42.7 to 85.3 metres (42.6 metres) and from 100.6 to 131.1 metres (30.5 metres). They averaged 0.146% Mo and 0.107% Mo respectively. Approximately 110 metres to the west, the angled-hole passed 20 metres north of a vertical hole drilled in 2004. The latter (A-04-06) was significantly lower in grade. It assayed 0.047% Mo over it full length of 214.3 metres but included a higher-grade section (from 20.7 to 200.5 metres) that averaged 0.054% Mo over 179.8 metres. 

 

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Adanac Moly Corp.

Press Release

August 29, 2006

Page 2.

 

 

Similarly, A-06-361 assayed 0.087% Mo over 200.8 metres, from 29.3 to 230.1 metres and contained a higher-grade section that averaged 0.099% Mo over 64 metres (from 71.9 to 135.9 metres). This angled drill-hole passed 20 metres north of a vertical Placer Development hole (PDL 235) approximately 50 metres to the west. The latter drill-hole assayed 0.106% Mo over 119.5 metres (from 33.5 to 153.0 metres).    

 

The company is encouraged by the continuity of the mineralization, particularly in this higher-grade part of the deposit.

 

Adanac Molybdenum Deposit Mineralized Intervals: 2006 Drill Programme
Drill Hole #	From (m)	To (m)	Length (m)	Average %Mo*
A-06-356	23.2	230.4	207.2	0.048
includes	32.3	142	109.7	0.070
includes	68.88	71.93	3.05	0.209
A-06-357	18.3	63.4	45.1	0.130
includes	42.67	45.72	3.05	0.239
includes	57.91	60.96	3.05	0.412(1)
A-06-358	7.9	163.4	155.5	0.031
includes	65.8	132.9	67.1	0.040
A-06-359	36.6	219.4	182.8	0.085
includes	42.7	85.3	42.6	0.146
includes	100.6	131.1	30.5	0.107
includes	60.96	64.01	3.05	0.209
includes	67.05	70.10	3.05	0.285
includes	118.87	121.92	3.05	0.266
A-06-360	20.1	212.1	192.0	0.057
includes	20.1	84.1	64.0	0.069
includes	151.2	190.8	39.6	0.061
A-06-361	29.3	230.1	200.8	0.087
includes	71.9	135.9	64.0	0.099
includes	41.45	44.5	3.05	0.657
includes	218.23	221.28	3.05	0.208

 

* Determinations based on assay intervals of 3.05 metres: Values > 0.2% Mo listed. 

 

⁽¹⁾  Hole lost at 61 meters (entered old adit)

 

 

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Adanac Moly Corp.

Press Release

August 29, 2006

Page 3.

 

 

The Qualified Person in connection with this press release and in respect of the Atlin, Ruby Creek Project is Dr. Robert Pinsent, PhD., P.Geo, Exploration Manager, who is responsible for verification and quality assurance of the exploration data and analytical results set forth in this release. Assays were completed by Acme Analytical Laboratories Ltd. of Vancouver, B.C.

 

Further assays will be released as they are received.

 

On Behalf of Management

 

ADANAC MOLY CORP.

 

 

 

Larry W. Reaugh,

President and Chief Executive Officer