NA Tungsten launches Mactung study

Vancouver — Strongly bullish on tungsten’s outlook, North American Tungsten (NTC-V, NATUF-O) has begun a feasibility study on its large Mactung project, near MacMillan Pass on the Yukon-Northwest Territories border.

North America’s sole producer of the specialty metal, the company is eyeing development of a second mine, pending a positive economic and technical review.

Mactung is widely regarded as one of the largest undeveloped high-grade tungsten skarn deposits in the world. Mineralization occurs as disseminated scheelite in a limestone-hosted calc-silicate skarn.

Earlier this year, North American Tungsten boosted indicated resources at Mactung to 33 million tonnes grading 0.88% WO3 plus 11.9 million inferred tonnes at 0.78% WO3 contained in four mineralized zones. A 0.5% WO3 cutoff grade was used, which was deemed by the engineering firm that calculated the estimate as appropriate for Mactung’s location and cost profile.

Additionally, higher-grade sections were identified within the resource. About 22.2 million indicated tonnes and 4.6 million inferred tonnes average more than 1% WO3.

Mactung hosts an indicated resource of 29 million metric tonne units (MTUs) of contained tungsten (WO3) with another 9.2 million contained MTUs inferred. One MTU is equal to 10 kg of WO3 per tonne, or 7.93 kg of pure tungsten, and is the standard weight measure used in the industry.

Tungsten’s 2-year average price is about US$250 per MTU.

Discovered by Amax in the early 1960s, about $26 million was spent on exploration, several hundred metres of underground development and engineering studies at Mactung in the 1970s and 1980s. A historic resource of 30 million tonnes grading 0.94% WO3 was calculated in 1982. The estimate almost led to a production decision, but the project was shelved due to deteriorating tungsten prices at the time.

Mactung is located about 160 km northwest of North American Tungsten’s Cantung mine, which restarted production in late 2005 and is the Western world’s largest tungsten supplier.

Production at Cantung in fiscal 2007 was 286,030 MTUs of tungsten concentrates.

From 1962-86, Cantung accounted for about 10% of the world’s total tungsten production.

Having a very high melting point and hardness second only to diamond, tungsten is primarily used as filaments in lights bulbs, in electronics and as a hardening alloy in steels.

With 122.1 million shares outstanding, North American Tungsten posts a $186-million market capitalization at its recent share price of $1.52. The stock has a 52-week trading range of 50-$1.64.