Yellowknife (Aug 07/06) - Production at Cantung mine is continuing following changes to an order that demanded they shutdown.

On July 25, officials with Indian and Northern Affairs Canada sent a letter ordering Cantung to stop underground mining activities and milling ore because water leaking from a tailings pond posed a danger to the environment.

"I believe the deposit of untreated mine water, as well as the seepage of water from Pond Four through its current pathway into the Flat River, poses a danger to the environment," said Troy Searson, INAC's water resource officer, in a letter addressed to Stephen Leahy, the CEO of North American Tungsten.

The inspection also found that the mine's tailings Pond Three was at serious risk of being overfilled with waste water "with an attendant danger of catastrophic dam failure," according to the letter.

Mine operations were allowed to continue production because the mine addressed the immediate concerns, said Annette Hopkins, the director of operations with INAC.

The mine water, treated camp sewage and tailings are being sent to Pond Three and the water seeping from Pond Four is being pumped back into the pond.

The structural integrity of the ponds is also being assessed by an outside professional engineer. The company is also building an additional pond.

The inspector will revisit the mine to verify that the company has made the necessary changes. "We are keeping in close contact with the company on the matter and they assure us that things are under control," Hopkins said.

The Cantung mine owned by North American Tungsten Corporation Ltd. is located on the NWT/Yukon border.