Primary Metals tallies Panasqueira resource

Vancouver – Tungsten producer Primary Metals (PMI-V, PMIZF-O) has come up with a resource estimate at its Panasqueira mine in central Portugal.

Proven and probable reserves of 1.39 million tonnes grading 0.233% WO₃ were reviewed in levels 2 and 3 at the mine, containing 324,408 metric tonne units (MTUs) of tungsten trioxide (each MTU actually equals 10 kg of tungsten trioxide). An additional indicated resource of 3.26 million tonnes at 0.263% WO₃ was tabled, containing a further 856,000 MTUs of tungsten trioxide. The study also estimated 1.6 million inferred tonnes averaging 0.224% WO₃ (containing 360,000 MTUs).

“At current mining rates, these reserves and indicated resources will be sufficient for the next eight years,” states company chairman Lewis Black. “We are particularly encouraged that these reserves and indicated resources are located above our existing Levels 2 and 3 and may be readily accessed by lateral mine development.”

The independent resource study did not include data from new high grade zones recently discovered at the deposit through underground development work and drilling.

Primary Metals’ Panasqueira mine produces about 120,000 MTUs of tungsten trioxide (in wolframite concentrates) annually from underground operations. The mine also produces by-product tin, copper and aggregate.

Historic mining has occurred in the area since the late-1800s but became integrated into Beralt Tin and Wolfram in 1928. Anglo American (AAUK-Q) subsidiary Minorco acquired Beralt in 1990 but ceased mining and placed the operation on care and maintenance in 1993. Avocet Mining (AVVGF-O) then picked up the project in 1994, recommencing production in the following year. Primary Metals acquired Panasqueira from Avocet in 2003.

Strong world tungsten prices (around the US$255 per MTU of WO₃) have resulted in robust economics for mine. The company has reinvested a significant portion of recent cash flow into upgrading and modernizing the equipment fleet. Introduction of low-profile underground mining equipment has allowed for increased mining rates and a reduction in waste rock haulage.

Primary Metals also recently acquired exploration licences for the Argimela tin deposit, located about 15 km west of Panasqueira.

Shares of the company rose about 9%, on light volume, to the $3.80-level following the reserve-resource estimate. With its 12.3 million shares outstanding, Primary Metals posts a $47 million market capitalization. The stock has a 52-week range of 76-to-$5.74.