jv

Joooles,

You are dead right about a JV. This is the only way forward for RCH unless they want to spend the next decade scratching around with small raisings and slow small movements forward.

Fortunately when you have the second highest average grade in the world and a super high grade core, JV partners are not far away. I'm betting a steel mill will step up to the plate.

There has been 2 such deals done in the US and China recently and there will be more. Moly is now in a supply defecit which in the second half of 08 is expected to see a big price surge again. Steel mills in Japan (100%) and Korea (90%) import all their Moly. They are getting real nervous about supply of this strategic metal as China (the second biggest supplier) cuts back on its exports and consumes more in its own steel mills.

The use of Moly is exploding with new Duplex steels, massive oil pipeline replacements (Moly will be in all new oil pipelines to stop them corroding) and is used to strip sulfur out of sour Oil (a greater amount of oil is coming up sour) and it goes on and on. The military also uses truck loads for shells and armour due to its hardness.

China has stuck export tarrifs on it but the Chinese exporters are still sending it offsure on the sly. Expect China to crack down with audits and penalties for this and then you will see a Moly market under supply pressure.