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: Operating

The CanTung Mine is a primary producer of tungsten concentrates from underground operations.

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. It was opened in 1962.

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 Cantung mine suspended operations in October 2009 and resumed production in October 2010.

The following table summarizes the production history of the operation for the 2008 and 2012 Fiscal Years.

2008 - 2012 PRODUCTION STATISTICS

North American Tungsten Corp. Ltd. - Cantung Mine

Fiscal Period Tons Milled % WO3 Recovery
1st Qtr 2008 (Oct 07 -- Dec 07) 94,916 1.03 73.60%
2nd Qtr 2008 (Jan 08 -- Mar 08) 95,877 0.95 69.50%
3rd Qtr 2008 (Apr 08 -- Jun 08) 104,489 1.05 74.10%
4th Qtr 2008 (July 08-Sept 08) 103,563 1.06 76.10%
1st Qtr 2009 (Oct 08 -- Dec 08) 100,607 1.17 74.60%
2nd Qtr 2009 (Jan 09 -- Mar 09) 96,190 1.11 76.50%
3rd Qtr 2009 (Apr 09 -- Jun 09) 100,206 1.19 77.40%
4th Qtr 2009 (July 09 -- Sept 09) 103,123 1.06 78.55%
1st Qtr 2010 (Oct 09 -- Dec 09) 21,421 0.92 68.95%
2nd Qtr 2010 to 4th Qtr 2010
(Jan 10 to Sep 10)
THE CANTUNG MINE SUSPENDED OPERATIONS IN
OCTOBER 2009 AND RESUMED IN OCTOBER 2010
1st Qtr 2011 (Oct 10 -  Dec 10) 78,943 1.03 72.13%
2nd Qtr 2011 (Jan 11 -- Mar 11) 76,980 0.85 73.35%
3rd Qtr 2011 (Apr 11 -- Jun 11) 101,873 1.03 78.38%
4th Qtr 2011 (July 11 -- Sept 11) 96,813 0.79 76.18%
1st Qtr 2012 (Oct 11 -- Dec 11) 97,509 1.12 77.35%
2nd Qtr 2012 (Jan 12 -- Mar 12) 92,502 1.13 75.89%
3rd Qtr 2012 (Apr 12 -- Jun 12) 84,585 0.93 75.05%
4th Qtr 2012 (July 12 -- Sept 12) 98,782 1.00 79.10%

The following information is partially based on a technical report prepared by Kevin Fitzpatrick, P. Eng. and Finley Bakker, P. Geo. in a report titled "Technical Repot on the Cantung Mine, Northwest Territories, Canada", dated January 31, 2011 file on February 9, 2011 at www.sedar.com. Subsequent to the date of the report information has been updated by Finley Bakker, a Qualified Person, who has supervised and approved this disclosure.

SOURCE: ANNUAL INFORMATION FOR FISCAL YEAR ENDED September 30, 2011 DATED: May 31, 2012 as filed at www.sedar.com on June 25 2012

MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES

The Cantung Mine is forecast to produce ore at a rate of 1,050 stpd or approximately 383,000 tons per year. Based on this forecast, mineral reserves at September 30, 2011 support a mine life of 3.5 years, ending in or around March 2015. Primary mining methods included longhole stoping and pillar-remnant ore recovery using different techniques. Currently, longhole methods are planned for mining 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 62%-72% WO3 and a flotation concentrate containing 35% - 45% WO3.

The mineral resource estimate was carried out using MineSight TM software to create a 3D block model of the various ore bodies and mine openings which were used to limit the material available to be mined. The dimension of the block size used in the model was 10 feet by 10 feet by 10 feet oriented parallel to the EW and NS grid direction. Historically, capping was not deemed necessary. A cutoff grade of 0.5% WO3 was used. Blocks within a 100 foot radius of a diamond drill hole were used. Mineral Reserves were estimated by applying extraction and dilution estimates to the insitu mineral resources on a stope by stope basis.

Mineral Resources for the Cantung Mine, as of October 1, 2011, are listed below in Table 1-2 and Table 1-3.

TABLE 1-2 CANTUNG INDICATED MINERAL RESOURCES
AS OF OCTOBER 1, 2011
North American Tungsten Corporation Ltd. - Cantung Mine

Zone Tons Grade (WO3 %) STU'S
West Extension Below 3700el 281,000 1.49 418,000
West Extension Below 3570el 300,000 1.46 438,000
West Extension 102,000 1.01 103,000
E-Zone - - -
Main Zone Pillars 156,000 1.07 167,000
Central Flats - - -
South Flats 10,000 1.35 13,000
Pit/PUG 1,213,000 0.83 1,006,000
TOTAL Indicated Resources 2,061,000 1.04 2,146,000
Indicated Resources are inclusive of the Probable Mineral Reserve.
Notes:
  1. Mineral Resources conform to CIM classifications.
  2. All Mineral Resources are classified as Indicated.
  3. Mineral Resources are estimated at a cutoff grade of 0.50% WO3.
TABLE 1-3 CANTUNG INFERRED MINERAL RESOURCES
AS OF OCTOBER 1, 2011
North American Tungsten Corporation Ltd. - Cantung Mine

Zone Tons Grade (WO3 %) STU'S
West Extension Below 3700el 1,000 0.92 1,000
West Extension Below 3570el 15,000 1.15 18,000
Pit/PUG 417,000 0.83 346,000
TOTAL Inferred Resources 433,000 0.84 365,000
Notes:
  1. Mineral Resources conform to CIM Classifications.
  2. Mineral Resources are estimated at a cutoff grade of 0.5% WO3 for underground as well as Pit and PUG
  3. All Mineral Resources are listed as Inferred
  4. Pit/PUG refers to Pit Underground
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 October 1, 2011 are summarized in Table 1-4 below.

TABLE 1-4 CANTUNG PROBABLE MINERAL RESERVES
AS OF OCTOBER 1, 2011
North American Tungsten Corporation Ltd. - Cantung Mine

Zone Tons Grade (WO3 %) CONTAINED
STU'S
West Extension Below 3700el & Below 3570 el 551,000 1.11 612,000
West Extension 86,000 0.87 75,000
E-Zone -   -
Main Zone Pillars 94,000 0.92 86,000
Central Flats -   -
South Flats 11,000 1.08 12,000
Pit/PUG 589,000 1.05 628,000
Total Probable Reserve 1,339,000 1.05 1,412,000
Notes:
  1. Mineral Reserves conform to CIM Classifications.
  2. All Mineral Reserves are classified as Probable.
  3. Mineral Reserves are estimated at a cutoff grade of 0.50% WO3.
  4. A minimum mining width of 15 feet was used.
The mineral resources and reserves are unlikely to be materially affected by metallurgical, environmental, permitting, legal, title, taxation, socio-economic, marketing, political and other issues as the existence of the possible impact of these factors is reasonably well-known and are unlikely to undergo significant changes.

MINING OPERATIONS

In the past, the mine used a variety of mining methods including room and pillar, cut and fill, longhole stoping with and without delayed backfill, and pillar-remnant ore recovery using different techniques.

Currently, longhole methods are used for virtually all of the remaining reserves, both for pillar recovery and for primary mining in the area below 3700.

After drilling and blasting, ore is removed by scoop tram, normally remotely operated, and then conveyed by truck through the main portal to a crusher located above the mill.

QUALIFIED PERSON

Kevin Fitzpatrick, P. Eng., the Company's Chief Mine Engineer and Finley J. Bakker, P. Geo., the Company's Superintendent of Technical Services are both are qualified persons as defined by NI 43-101.

DETAILS OF THE TECHNICAL REPORT ON THE CANTUNG MINE, NORTHWEST TERRITORIES, CANADA DATED JANUARY 31, 2011 ARE AVAILABLE AS NATIONAL INSTRUMENT 43-101 TECHNICAL REPORT FILED ON SEDAR. TO VIEW THE REPORT CLICK HERE.  
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