Canada Tungsten sees hope of mine re-start next year

Things are looking up for Canada Tungsten Mining Corp. (TSE), it says.

Not only is the company re- opening its ammonium paratungstate (APT) plant at Fort Madison, Iowa, but President Wayne Lenton told The Northern Miner following the annual meeting he is reasonably confident the price of tungsten will have risen enough by next year to justify reopening the company’s mine at Tungsten, Northwest Territories.

The western world’s largest tungsten mine, it was shut down two years ago in the face of weak tungsten prices.

The current price of scheelite, (at $57US, short tons per unit), is insufficent to justify reopening the mine, Lenton said, but added he thinks a price of $75 could be reached next year, making a plant re-start feasible.

If in fact that should occur, he said, recruitment of people would be the major factor in the reopening operations. If such a decision were made next March, for instance, it would take up to three months from that time to get back into operation.

The business outlook for tungsten is more encouraging now than it has been for some time, Lenton told shareholders at the meeting. “There are positive signs of increased demand for tungsten. Based on historical trends, we could now be entering the stage in the economic cycle when the tungsten market traditionally strengthens.

“The expected quickening in demand for tungsten will take place at a time when mine production in the western world is at a very low level. Unfortunately, the export policies of the Peoples’ Republic of China continue to be a very major factor and are difficult to predict, but it does appear likely there will be continued upward pressures on tungsten prices during the next 12 months.”

Referring to the now reopened ammonium paratungstate plant in Iowa, Lenten said the company is particularly encouraged by the strengthening of the market, and the improvement in margins on APT sales, partly due to a U.S./ China orderly marketing agreement.

This year for instance , he said, the use in the U.S. of APT and tungstic acid from China is expected to drop from 25% to 6%. At the same time, usage of tungsten in APT production in the U.S. will increase this year by about 20% over 1987.

Out to strengthen its interests in the gold sector, Canada Tungsten holds a 30% interest in Minerex Resources (VSE), which is targeting to produce over 20,000 oz gold this year, from a heap leach operation in Nevada. Canada Tungsten also holds a placer gold operation in the Yukon, from which 4,000 oz gold will be produced in 1988.

On the financial side, the company had a net loss of $422,000 in first-quarter 1988, against a loss of $993,000 in the similar period last year.

Working capital, as at March 31 was $24.3 million, of which $15.4 million represented cash and marketable securities.