Molybdenum Market Update:

Nanika's consultant on the molybdenum market, Denis Battrum, MBA, M.Sc., B. Sc., advises that the market for molybdenum can be fairly described as strong and getting stronger - financial results from the United States notwithstanding. Molybdenum demand is 75-80 percent related to steel - which is growing 5.6 to 5.8 percent a year, based on the most recent statistics from the International Iron and Steel Institute. Molybdenum is also supported by the catalyst business, which is growing much faster than oil refining generally because of its capability to reduce sulfur when used in catalysts. Catalyst producers put the demand for molybdenum in their business as growing 8-11 percent annually. The molybdenum market can be said to be growing in a range between 5.6% and 11%. The spot price is rising at $35.40 US/lb at July 15, 2008 up from $35.25 US/lb. as at July 11, 2008 as quoted by Ryan's Notes. It is reported that traders cannot find spot material for new incremental demand because producers are largely sold out. Denis Battrum advises further that there remains a supply question in South America due to structural labour problems.