Playfair’s tungsten resource grows at Grey River

Playfair Mining (PLY-V) has increased its inferred resource at Grey River in Newfoundland by 16% to 1.2 million tonnes grading 0.73% tungsten trioxide for 18.8 million pounds of tungsten trioxide or 853,000 metric tonne units (MTUs), the company reported today. (One MTU contains 10 kilograms of tungsten trioxide and is the standard weight measure of the tungsten trade.)

About 94% of the resource tonnage is contained within the main No. 10 vein but all three veins are open for expansion and the junior says there is “further room to enhance the already robust resource size through the expansion of these veins and through the exploration for additional structures.”

To calculate the new resource Playfair used a cut-off grade of 0.2% tungsten trioxide (WO3) based on the cut-off grades for North American Tungsten‘s (NTC-V) Cantung mine in Western Canada. Resources were reported at vein width, which average 1.2 metres, and all areas in the model grading less than 0.2% WO3 over a minimum mining width of 1.0 metre were removed from the resource.  

The 100%-owned deposit near the fishing village of Grey River on the south coast of Newfoundland is the most advanced of the company’s four high-grade tungsten deposits in Canada.

Golder Associates has been retained to complete an updated preliminary economic assessment incorporating the bigger resource, while Stantec Consulting is advancing environmental and permitting work and SGS Minerals Services is completing metallurgical testing to a pilot plant scale.

The Grey River tungsten veins are typical fluorite-rich wolframite-quartz greisen vein deposits. Most of the tungsten mineralization is wolframite with a number of small scheelite occurrences known.

Tungsten mineralization was first discovered near Grey River around 1956. Later exploration by the American Smelting and Refining Company (Asarco) from 1957 to 1970 included surface geological mapping, trenching and diamond drilling on five of the better veins, driving a 6,300 ft long exploration adit into and along the No. 10 vein, driving 20 short raises into the vein and collecting a 275 ton bulk sample for a number of metallurgical tests.

Playfair says that Asarco had destined the project for production in the early 1970s but shelved the project due to low tungsten prices. The property then changed hands several times with no further exploration until Playfair acquired the property.

More than 300 veins and lenses have been mapped on surface but so far only two or three appear significant enough to have been partially evaluated by Asarco, Playfair says.

The Vancouver-based junior says that it is “in discussions with several end users of tungsten regarding production potential, financing opportunities and off-take agreements” and notes that tungsten prices have increased by 70% over the last two years due to rising demand for the metal in China, “supply issues” and “ongoing demand in the world’s principal economies.”

Current prices for the strategic metal (tungsten has the highest melting point of any metal and is required in a wide array of products ranging from jet turbine engines and high-speed cutting tools to electronic circuitry and surgical instruments) are about US$19.85 per pound.

Tungsten prices are quoted per MTU of contained tungsten trioxide. Ammonium paratungstate (APT) is an intermediate product in the production of tungsten metal. A price of US$437.50 per MTU equates to US$43.75 per kilogram or US$19.85 per pound.

At presstime in Toronto, Playfair shares were up 18% to 6.5¢ within a 52-week trading range of 3.5¢-32¢ per share.