Thompson Creek To Acquire Up To 75% Of Molybdenum Deposit

TORONTO, ON - Thompson Creek Metals Company Inc. reported that its wholly owned subsidiary, Thompson Creek Metals Company USA ("TCUSA"), has signed an Option Agreement with U.S. Energy Corp. ("USE") that gives TCUSA an option to acquire up to 75% in USE's Lucky Jack molybdenum property in Gunnison County, Colorado.
Under the Option Agreement, TCUSA has made a $500,000 payment to USE upon signing. Unless the Agreement is sooner terminated, TCUSA will pay $1 million annually to USE for six years beginning January 1, 2009 and ending January 1, 2014. TCUSA as the project manager will direct additional funds towards the assessment, environmental permitting, exploration and development of the property.
TCUSA has the right to withdraw from the project and associated payment commitments at any time for any reason. TCUSA will not assume any existing liabilities on or related to the property until it exercises its right to acquire an ownership interest in the property.
"We are extremely pleased to have the opportunity to become involved in a project of such high quality," said Kevin Loughrey, Chairman and Chief Executive Officer of Thompson Creek. "The Lucky Jack Project is one of the largest, high-grade, undeveloped molybdenum deposits in the world, with a historical mineral resource in excess of 700 million pounds of molybdenum. The transaction we have entered into with U.S. Energy allows us to earn our way into property ownership by spending money to develop the project over a period up to 10 years, although we hope to advance the project to completion more quickly. The transaction is also particularly appropriate for Thompson Creek at this time because it gives the Company access to a world class ore body without the Company issuing additional shares, which currently are undervalued.
"As with any project of this magnitude, there are challenges. However, we are confident we can develop this deposit in a manner that is environmentally sound, a boon to the local community, and positive for our shareholders. Projects such as this represent hundreds of long-term jobs, millions of dollars of tax revenues, and significant opportunities for the local and state economies. Gunnison County is fortunate to have an asset of this quality within its borders.
The Lucky Jack molybdenum property is one of the largest and highest grade undeveloped primary molybdenum deposits in the world. The deposit is located beneath the surface of Mount Emmons, which is in Gunnison County three miles northwest of Crested Butte, Colorado. The project area is comprised of approximately 5,400 acres of patented and unpatented mining claims and millsite claims. The property is currently held and controlled (100%) by U.S. Energy Corp.