NA Tungsten aims for Cantung re-start

Vancouver — With the aim of bringing its Cantung tungsten mine in the Yukon back into production, North American Tungsten (NTC-V) is trying to raise up to $7.5 million through a private placement brokered by Union Securities.

Prices for tungsten, a strong metal used mainly as a steel hardener, in light bulbs, and as a substitute for lead in ammunition, have grown about 40% this year on strong Chinese demand.

The Cantung mine property covers 16,000 acres along the Flat River, between McKenzie and Logan Mountains. The mine is in the Selwyn tungsten belt.

Two deposits were mined at Cantung — one by open-pit methods between 1962 and 1973; the other, by underground methods between 1974 and 1986 and from 2001 to late 2003. Both are disseminated scheelite deposits in calc-silicate skarn replacement zones within limestone.

Room-and-pillar mining was used underground, and a 1,000-tonne-per-day mill exists on-site. The gravity concentrate was shipped directly to users or flotation concentrate for further concentrating.

The company shut down the mine late last year after AB Sandvik Coromant of Sweden and U.S.-based Osram Sylvania Products terminated their purchase agreements, which included all the tungsten concentrate produced there. North American Tungsten’s executives and directors all resigned, and the company went into bankruptcy protection.

Although it is working to emerge from creditor protection, the company received an extension from the British Columbia Supreme Court until Sept. 30, 2004, allowing it time to re-structure.

The present resource at Cantung comprises the West Extension, stopes and pillars in the Main zone, and ore stockpiles. At September 2002, minable reserves stood at 771,000 tons grading 1.75% WO3, and indicated resources were pegged at 6.5 million tons grading 0.95% (historical resource).

North American Tungsten will require additional financing to replace key production and power generation equipment. The company is looking at a lower break-even point with a lower mill cutoff grade, which would increase minable reserves and the life of the mine.

In light of rising tungsten prices and an anticipated supply shortage, the company is eager to outline additional reserves at Cantung and drill exploration holes at its Mactung property in the Yukon, near Ross River.

In September 2002, Mactung was estimated to hold 2.6 million tons of 1.34% WO3 in minable reserves, as well as more than 45 million tons of material grading 0.96% as a historical resource in all categories. More drilling is necessary to raise the resources into compliance with National Instrument 43-101.