Deal for funding and concentrate
Doug Ashbury
Northern News Services
Yellowknife (Mar 21/01) - The owner of a major NWT tungsten deposit predicts a return to production by year's end.
Plans to restart CanTung mine, which is located three kilometres east of the NWT-Yukon border and west of Nahanni National Park, have been presented to government and regulatory authorities, according to a press release by North American Tungsten Corporation.
To access the dormant mine, North American plans to negotiate an agreement with the Yukon Government to re-open the access road.
Partial funding of a restart will come from a new deal with Sandvik AB and Osram Sylvania Products Inc.
Under the deal, Sandvik and Osram Sylvania will advance a total of $4.5 million to North American to be repaid over three years.
North American is attempting to raise additional funds to restart the mine.
North American president and CEO Udo von Doehren said total restart costs are estimated at $9 million to $10 million.
CanTung was shut down in 1986 after low-priced Chinese tungsten flooded the market.
Sandvik, the Swedish tooling, mining and construction and specialty metals company, and U.S.-based Osram Sylvania, part of German technology giant Siemens AG, have agreed to purchase all of North American's tungsten concentrate production from CanTung.
That's estimated at 900,000 metric tonnes over three years. Under the deal, Sandvik and Osram Sylvania can also negotiate an option for a stake in future North American developments. North American also owns the Mactung deposit 100 kilometres north of CanTung.
von Doehren said the letter of intent with Sandvik and Osram Sylvania "confirm the company's long-standing, firm belief in the quality and potential of its assets and the eventual benefits which will accrue to its shareholders and local communities."
Shares in North American have shot up as much as 840 per cent this year. The 52-week high and low are 94 cents and 10 cents. Mid-day Monday, shares were off four cents at 80 cents.
Sandvik, founded in 1862, has been listed on the Stockholm Stock Exchange for a century. Osram Sylvania was created when Osram acquired the Sylvania lighting business in North America from GTE.
CanTung and Mactung combined represent the Western World's largest high-grade proven tungsten reserves and comprise 15 per cent of the world's proven reserves, the company said.
According to GNWT figures, CanTung has 1.27 million tonnes of ore grading 1.2 per cent tungsten. Mactung's reserve is estimated at 6.1 million tonnes, grading 1.2 per cent plus 17.2 million tonnes at .8 per cent tungsten.
CanTung's mine life is estimated at 4.5 years. von Doehren said Mactung could produce for 30 years.
