CanTung Mine Site
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NORTHWEST TERRITORIES, CANADA
NTS Area: 105 H/16
Latitude/Longitude: 61.9717°N, 128.2683°W
Ore Type: oxide
Mining Method: underground
Access: 306 km, all weather road from Watson Lake, YT
Project Status: Re-start announced on July 26, 2010 with production expected in October 2010.

On July 26, 2010 it was announced that the re-start process for production at the Cantung tungsten would commence immediately. The comprehensive re-start plan is based upon the recovery in the world tungsten prices, an upgraded operational plan and a financing plan developed to support the re-start of operations at the CanTung mine.

Production at the Cantung Mine was temporarily suspended effective October 18, 2009 due to increased product inventory and declining tungsten prices. The mine was placed on a care and maintenance program that will enable a timely and cost effective return to production.

Currently, the major features and facilities associated with Cantung are as follows:
  • The Cantung deposits, consisting of the Open Pit resource near surface, and the E Zone, underground.
  • The physical plant site including an underground mine, a small open pit, process plant, diesel power plant, workshops, warehouses, administration buildings, a town site and single status accommodation, and an airstrip.
  • Waste rock storage facilities and a tailings storage facility.
LOCATION

The Cantung Mine is located in the Nahanni area of western Northwest Territories, Canada, approximately 300 km by road northeast of Watson Lake, Yukon, close to the Yukon border. The mine is a primary producer of tungsten concentrate from open pit and underground mines.

HISTORY

Prospectors discovered the Cantung Mine tungsten deposit in 1954, while looking for copper. In 1959, the Canada Tungsten Mining Corporation Ltd. was formed to acquire and develop the property. The Cantung Mine commenced production in 1962 from an open pit at the rate of 300 tons per day (stpd), with suspensions in 1963 due to low tungsten prices and in 1966 due to the destruction of the mill by fire. The construction of a new 350 stpd mill was completed in 1967 and, in 1969, the capacity was increased to 450 stpd.

In 1971, drilling discovered the "E Zone". This zone was accessed through an adit collared at the valley bottom, close to the town site. The mill began to process the underground ore in 1974. In 1975, the mill was further expanded to 500 stpd. A major mill expansion in 1979 increased the mill capacity to 1,000 stpd.

In 1985, Amax Inc consolidated ownership of the Cantung Mine and transferred all tungsten assets, including the Mactung Project at Macmillan Pass, to Canada Tungsten Mining Corporation, retaining majority control. Aur Resources Inc. (Aur) purchased Amax Inc's controlling interest in 1995 and Canada Tungsten and Aur merged in 1996.

In 1997, North American Tungsten Corporation Ltd. ("NATCL") purchased the Cantung mine, together with the related tungsten assets of the former Canada Tungsten Inc., from Aur.

After an improvement in tungsten prices commencing in 2000, NATCL reopened the Cantung mine in December 2001. Underground production and milling resumed at this time. In December 2003, NATCL was placed under the protection of the Companies Creditors Arrangement Act (CCAA), and the mine was closed. In November 2004, NATCL successfully completed a plan of arrangement to deal with creditors, allowing planning for reopening to commence. Preparatory work for the reopening began in July 2005, and production resumed in late September 2005.

The following table summarizes the production history of the operation for the 2008 and 2009 fiscal years.

2008 - 2009 Production Statistics
North American Tungsten Corporation Ltd. - Cantung Mine
Fiscal Period Tons Milled % WO3 Recovery
1st Qtr 2008 (Oct-Dec) 94,916 1.03 73.6%
2nd Qtr 2008 (Jan-Mar) 95,877 0.95 69.5%
3rd Qtr 2008 (Apr-Jun) 104,489 1.05 74.1%
4th Qtr 2008 (July-Sept) 103,563 1.06 76.1%
1st Qtr 2009 (Oct-Dec) 100,607 1.17 74.6%
2nd Qtr 2009 (Jan-Mar) 96,190 1.11 76.5%
3rd Qtr 2009 (Apr-Jun) 100,206 1.19 77.4%
4th Qtr 2009 (July-Sept) 103,123 1.06 78.55%


MINERAL RESOURCE AND MINERAL RESERVE SUMMARY

DETAILS OF THE OF THE TECHNICAL REPORT ON THE CANTUNG MINE, NORTHWEST TERRITORIES, CANADA, DATED AUGUST 18, 2009 FILED ON OCTOBER 1, 2009 ARE AVAILABLE AS NATIONAL INSTRUMENT 43-101 TECHNICAL REPORT UNDER THE COMPANY'S PROFILE AT WWW.SEDAR.COM.


Technical Report On The Cantung Mine, Northwest Territories, Canada View PDF


Mineral Resources for the Cantung Mine, as of July 1, 2009 are listed below. These Mineral Resources encompass both audited resources in the underground mine, as well as those recently updated for the Open Pit and PUG (Pit deposit, Underground ore) Zones.

CANTUNG INDICATED MINERAL RESOURCES

North American Tungsten Corporation Ltd. - Cantung Mine

Zone Tons Grade (WO3 %) STU'S
West Extension 132,597 1.20 158,537
West Extension Below 3700el 379,763 1.38 524,473
E-Zone 24,183 1.97 47,738
Shop Zone - - -
Main Zone Pillars 414,090 1.26 520,691
Central Flats 29,023 1.07 31,183
South Flats 40,255 1.64 66,154
PUG 479,118 1.17 562,857
Stockpile 6,447 0.73 4,706
TOTAL Indicated Resources 1,505,476 1.27 1,916,339
Notes:
  1. Mineral Resources conform to CIM and NI43-101 requirements.
  2. Mineral Resources are estimated at a cutoff grade of 0.8% WO3 for underground as well as Pit and Pug
  3. All Mineral Resources are listed as INDICATED

Mineral Resources are inclusive of Mineral Reserves; excess resources may at some time in the future become reserves, however, at present they cannot be included in the estimate of Mineral Reserves. The Mineral Reserves include material for which there is a mining plan, and at least a conceptual design. Mineral Reserves for the Cantung Mine, as of July 1, 2009, are summarized below.

CANTUNG PROBABLE MINERAL RESERVE
Zone Tons Grade (WO3 %) STU'S
West Extension 95,666 1.08 103,271
West Extension Below 3700el 271,451 1.07 291,340
West Extension Below 3570el 148,187 1.11 164,146
E-Zone 23,967 1.09 26,023
Main Zone Pillars 376,554 1.06 400,360
Central Flats 22,750 0.87 19,775
South Flats 45,287 1.33 60,444
PUG 30,390 1.17 35,536
Stockpile 6,447 0.73 4,706
TOTAL Probable Reserves 1,020,699 1.08 1,105,602
Notes:
  1. Mineral Reserves conform to CIM and NI43-101 requirements.
  2. All Mineral Reserves are classified as Probable.
  3. Mineral Reserves are estimated at a cutoff grade of 0.80% WO3.
  4. A minimum mining width of 15 feet was used.

NATCL notes that some mining zone nomenclature may cause confusion for those unfamiliar with the Cantung deposits. The E-Zone refers both to the entire underground orebody, and also to the few remaining stopes that do not fit into a subzone category such as Main, South Flats, or West Extension.

The reserve estimate is based on NATCL's forecast of a long-term base case G1 price scenario of US$205/MTU; an operating cost of $152.22 per ton milled and a cut off grade of 0.80% WO3 for the life of mine. The Mine has operated successfully in the past, however, it should be noted that it is a relatively high cost producer, and has experienced previous shutdowns during periods of low tungsten prices. In NATCL's opinion, the key risk to mine profitability lies in tungsten price sustainability and mined grades over the remaining mine life.

The Cantung Mine produces ore at a rate of 1,100 stpd. Mineral Reserves support a mine life of 2.5 years. Primary mining methods included, cut and fill and longhole stoping with and without delayed backfill, and pillar-remnant ore recovery using different techniques. Currently, longhole methods are planned for the majority of the remaining reserves, both for pillar recovery and for primary mining in areas with favourable geometry.

Processing is carried out by gravity and flotation circuits. Final products include a premium gravity concentrate (G1), containing 65% WO3 and a flotation concentrate containing 47% WO3.

When production is taken into account, Mineral Reserves have increased since the previous estimate. Increases are due to exploration of new zones, inclusion of lower-grade areas rendered economic by higher prices, and planned pillar recovery in previously mined areas through the use of longhole mining methods.

QUALIFIED PERSON

Robert D. Baldwin, P. Eng., the Company's Senior Mining Engineer and Finley J. Bakker, P. Geo., the Company's Chief Geologist both are qualified persons as defined by NI 43-101.  
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