Primary Metals tallies Panasqueira

Vancouver — Tungsten producer Primary Metals (PMI-V, PMIZF-O) has released a resource estimate for 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 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,” says 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.

The Panasqueira mine produces about 120,000 MTUs of tungsten trioxide (in wolframite concentrates) annually from underground operations. The mine also produces byproduct tin, copper and aggregate.

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

Strong world tungsten prices (around US$255 per MTU of WO3) have resulted in robust economics for the 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 news. With 12.3 million shares outstanding, Primary Metals posts a $47-million market capitalization. The stock has traded in a 52-week range of 76-$5.74.