Sultan drills moly, tungsten in B. C.

VANCOUVER — For Sultan Minerals (SUL-V), 5 million tonnes is the magic number. Sultan president and CEO Arthur Troup hopes another batch of drill results from its Jersey-Emerald property in the southeastern corner of B. C. will help the company double its resource estimate and improve the economics of a potential tungsten-molybdenum mine.

“There’s a chance we’re already there,” Troup says. All told, Sultan has outlined a measured and indicated tungsten mineral resource at 2.3 million tonnes grading 0.372% WO3. The measured and indicated moly resource is considerably less at 440,000 tonnes grading 0.103% MoS2.

The latest underground drilling explored the Dodger moly zone near the workings of the Dodger mine, one of several mines operated by Placer Dome predecessor companies [since taken over by Barrick Gold (ABX-T, ABX-N)] between 1947 and 1973 on the property. With 36 holes completed there, Sultan has traced the stockwork over 1 km north to south and 300 metres east to west.

Moly highlights from the latest drilling include a 32-metre intersect grading 0.08% MoS2 that included 1.04% MoS2 over 1.5 metres in hole 9 and a 26-metre intersect of 0.16% MoS2 in hole 8. Most of the moly results occurred between 100 to 200 metres depth.

To Sultan’s surprise, drilling also hit a new near-surface tungsten zone which is interpreted as the western extension of the East Dodger tungsten mineralized area. Hole 9 returned 7 metres grading 0.35% WO3 and hole 8 hit 6 metres grading 0.15% WO3.

Troup says the drilling is part of Sultan’s ongoing efforts to upgrade its resource estimate for the property. In a 2007 scoping study, Wardrop Engineering wrote its financial evaluation “shows that the Jersey-Emerald property is a marginally positive project at the cur- rent concentrate prices and with the current National Instrument 43-101 resource.”

As Troup puts it, “Wardrop told us to double our resource estimate to make the project more attractive.”

At the time, Wardrop estimated that at US$245 per metric tonne unit of tungsten concentrate and with capital costs of $85 million, a mine with a life of 5.3 years at Jersey- Emerald had about a 4-year payback period.

If Sultan can tally a 5-million-tonne resource, Troup hopes the company will be able to operate a 2,000-tonne-per-day operation with a 10-year mine life. With new equipment, Troup believes that capital costs would ring in at around $125 million.

To get to 5 million tonnes, Troup sees incorporating a variety of potential resources. These include expanding the moly-mineralized area and pulling out pillars from Placer Dome’s workings as it backfills areas with a mixture of concrete and tailings.

Sultan would mine near-surface tungsten using open pits, and get at underground moly by relying on existing workings that include haulage tunnels beneath some of its mineralized drill holes. Troup says they would target the higher-grade moly from underground.

He also envisions a “kick-start” scenario for the project. Placer Dome left a stockpile of about 1 million tonnes of low-grade, coarse-grind grading about 0.13% WO3. For about $12 million he thinks Sultan might process this material.

The question there, Troup says, is how oxidized the stockpile is and whether Sultan can overcome interfering clay minerals in a flotation circuit. To answer that question Sultan is conducting metallurgical studies on the stockpiled material — results Troup hopes to have in early 2009.

Troup says if results from an updated resource estimate are positive, they will update the scoping study and move on to prefeasibility.

“What I’d hope to do,” he says, “is talk to end users for financial assistance.” He notes Tokyo-listed Sojitz’s 2007 takeover of Primary Metals, a company that operated the Panasqueira tungsten mine in Portugal.

On news of the drill results Sultan closed up 1 to close at 10.