United States Antimony (NYSE-A: UAMY) said a new resource for its Fostung tungsten project in Ontario shows the deposit holds raw metals that would be worth about $4.6 billion (C$6.3 billion) at current prices.
The technical report, prepared by SRK Consulting, revealed a total inferred resource of 14.62 million tonnes grading 0.17% tungsten trioxide, containing 53.6 million lb. of the metal. It replaces a prior estimate of 12.4 million tonnes grading 0.213% under a previous ownership.
The estimated value of the inferred resource is based on a current tungsten price of $1,890 per metric ton unit, before mining and processing costs, US Antimony said.
Tungsten, due to its unique properties of having an exceptionally high melting point, nearly unmatched hardness and extreme density, is now used in many modern industrial applications, including aerospace, defense, electronics and energy.
Following years of prolonged underinvestment and export restrictions by top producer China, price of the metal has exploded. According to Fastmarkets data, the price of tungsten trioxide has almost tripled over the past year.
Quick development
Located 70 km west of Sudbury, the Fostung property represents a key part of US Antimony’s business model to fast-track critical minerals projects for the North American market. The Texas-based company is currently the only fully integrated producer of antimony outside of China and Russia, operating a large smelting facility in Montana capable of producing 5 million lb. of the metal.
With eyes on adding tungsten production, US Antimony last year acquired the Fostung project from Transition Metals (TSXV: XTM) for $5 million cash and a 0.5% royalty. The aim is to quickly develop the project into an initial open-pit mine using existing infrastructure, then expanding into underground mining.
“We acquired the Fostung tungsten property in June of last year with the view that this deposit had the greatest potential to become the next North American producer of tungsten,” Joseph Bardswich, executive vice president and chief mining engineer, said in a press release. “Our business model is to ‘fast-track’ mining projects in an effort to meet the demands of our US military for certain critical minerals.”
China controls the vast majority of the worldwide tungsten supply and about 80%-85% of global processing capacity. The US and Canada have not produced any tungsten concentrates since 2016.
“We are eager to continue with the recommended next phases of drilling, bulk sampling and metallurgical testing to advance the Fostung deposit from an inferred to a measured and indicated resource,” Bardswich added.
The company said it is now in the process of filing a request for U.S. government funding under the Defense Production Act Title III in an effort to expedite its mining plan. Fostung will likely be the first tungsten ore mined in either the U.S. or Canada in over 10 years, the company said.
US Antimony shares fell 8.3% to $9.76 apiece in early afternoon U.S. trading amid a broad market selloff. The company has a market capitalization of about $1.3 billion.
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