Declining tungsten prices and rising inventory are forcing North American Tungsten (NTC-V, NATUF-O) to put its 100%-owned Cantung mine on care and maintenance, temporarily suspending production starting Oct. 15.
The company will continue to sell product from inventory and will have enough material to meet its contractual sales obligations. The company will continue spot sales through early 2010.
“I expect that a tungsten supply shortfall will develop as the world economy improves,” Stephen Leah, the company’s chairman and chief executive said in a statement. “We fully intend to pursue plans to return the mine to full operations after markets have significantly firmed.”
The Cantung mine is in the Northwest Territories, about 300 km northeast of Watson Lake, Yukon, close to the Yukon border. Cantung is a primary producer of tungsten concentrate from open-pit and underground mines, and first saw production in 1962.
North American Tungsten says it is proceeding with its summer drill plans at Cantung to expand known resources. The majority of funds, however, will be spent at its Mactung development project, about 160 km north of Cantung. The company says Mactung is one of the world’s largest known undeveloped high-grade tungsten-skarn deposits.
As of September 2006, the Cantung mine had probable reserves of 1 million tons grading 1.17% tungsten oxide; indicated resources of about 3 million tons grading 1.21% tungsten oxide and inferred resources of 734,000 tons at 0.74% tungsten oxide.
North American Tungsten claims it is the West’s largest producer of tungsten concentrate, with a producing mine and a strategic tungsten development asset.
Tungsten concentrate is a strategic industrial metal used in a variety of products ranging from jet turbine engines and high-speed cutting tools to electronic circuitry and surgical instruments.
At presstime, North American Tungsten shares traded at 12.5¢ apiece. The company has a 52-week trading range of 10¢-$1.13 and 126.9 million shares outstanding.
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