Vancouver – With the aim of bringing its Cantung mine back into production, Vancouver-based North American Tungsten (NTC-V) is attempting to raise up to $7.5 million through a private placement brokered by Union Securities. Prices for tungsten, which is used mainly as a steel hardener and in light bulb filaments and recently as a substitute for lead in ammunition, have shot up about 40% this year on strong Chinese demand.
The Cantung mine property covers some 16,000 acres, encompassing the town of Tungsten and straddling the Yukon Northwest Territories border along the Flat River which runs between the McKenzie and Logan mountains.
Located in the Selwyn tungsten belt, two deposits were mined at Cantung: the original open pit orebody was mined between 1962 and 1973; and the underground E-Zone was mined between 1974 and 1986, recommencing in 2001 until last December. Both are disseminated scheelite deposits in calc-silicate skarn replacement zones within ore limestone.
Room and pillar mining was used underground and a 1,000 tonne per day mill is on the property. The gravity concentrate was shipped directly to users or flotation concentrate for further concentrating.
The company had to shut down the mine late last year and place it on care and maintenance 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. The company’s executives and directors all resigned at the time and the company went into bankruptcy protection.
Although the company is working to emerge from creditor protection, it has received an extension to September 30, 2004 to allow it to restructure, from the British Columbia Supreme Court.
The resource at Cantung comprises three main components: the West Extension, Main Zone stopes and pillars, and broken ore stockpiles. As of September 2002, mineable reserves stood at 771,000 tons grading 1.75% WO3 and indicated resources were pegged at 6.5 million ton grading 0.95% WO3 (historical resource).
According to Jim Simpson, director of investor relations for the company, it won’t take much to get things up and running at the mine. The company will require another financing to replace key production and power generation equipment and to provide working capital.
The company wants to look at a lower break-even point with a lower mill cut-off grade, which would increase the mineable reserves and thereby the mine life.In light of rising tungsten prices and an anticipated supply shortage, the company is eager to outline additional ore reserves at Cantung and conduct exploratory drilling at its Mactung property in the Yukon near Ross River.
Mactung was estimated to hold 2.6 million tons of 1.34% WO3 in mineable reserves as well as over 45 million ton of material grading about 0.96% as a historical resource in all categories as of September 2002. More drilling is necessary to get the resources into compliance with National Instrument 43-101.