Yellowknife (Nov 01/04) - North American Tungsten could reopen its Cantung mine near Nahanni Butte by this spring if creditors accept a debt repayment plan the company will pitch in Vancouver on Nov. 2.

Stephen Leahy, chairman of North American Tungsten (NTC), said the company needs $5-$7 million to restart its operations.

In July, NTC made an arrangement with Union Securities to sell shares. If the creditors accept NTC's proposal, the offering will net the company the required money -- $1 million of which will be used to further explore the Cantung, Mactung and Rifle Range Creek areas.

However, the NWT government has yet agreed to support the move.

"In order for us to support the mine we'd have to see socio-economic benefits to the NWT. The company would have to demonstrate the benefit to the NWT through employment and business opportunities," said Brendan Bell, Resources, Wildlife and Economic Development minister.

Most of the mine's 170 former employees are from Watson Lake, Yukon.

Bell is also looking for corporate income taxes from the company, providing the company has a taxable bottom line.

Bell said the company presently has a $900,000 security deposit in place to secure a five-year water licence that was issued late last year.

If NTC is resurrected, it will have to post an additional $1.5 million per year for the next four years and an additional $1 million in the fifth year.

Jennifer Morin, a conservation co-ordinator with the Canadian Parks and Wilderness Society, says her organization is not opposed to the Cantung Mine, but wants to see "hazardous materials like fuels, batteries and oils and grease cleaned up."

Even though there is a movement to expand the boundaries of the Nahanni National Park, Morin said Cantung Mine would be exempt from further environmental assessments.

She said her organization is concerned whether the company has enough money on hand for reclamation of the area prior to any restart of operations.

The company ended operations in December 2003 and applied for bankruptcy protection when its secured creditors, Osram Sylvania and Sandvic, cancelled a supply arrangement and demanded payment of $4.4 million in debt.

Last spring, the company negotiated a settlement with the two European companies, offering a $300,000 repayment to be paid prior to Nov. 20 and an additional $600,000 in future tungsten shipments.

NTC owes general creditors $6.5 million. In its proposal to creditors, those owed $750 or less will receive 100 per cent of their money back. Those owed more than $750 can elect to be paid $750 or 20 per cent of their claim.

Those owed more than $150,000 can elect to be paid 20 cents on the dollar, either in cash or in NTC shares, sold at 20 cents a piece.

Employee shareholders will be paid 100 per cent of their vacation pay and $750 of their severance pay or 20 percent of their severance claim, whichever they elect.