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Tungsten Mining NL – Exploration in Western Australia

Tungsten Mining NL

Overview

Tungsten Mining NL (ASX:TGN) is an Australian based resources company listed on the Australian Stock Exchange, that has an experienced management team with a proven track record of tungsten mine development. The Company’s prime focus is its high-grade, fully permitted Kilba project in Western Australia. The project features relatively simple metallurgy which will benefit metal recovery during processing.

Results of a scoping study in mid 2013 confirmed the viability of the Kilba project, and suggested that Tungsten Mining may soon become one of the few Tungsten producers outside of China.

Investment Highlights

    • Listed on the Australian Stock Exchange
    • Potential to be among the five largest suppliers of tungsten in the Western World
    • Ability to deliver a profitable tungsten business in the shortest possible timeframe
    • Scoping Study Findings indicating an anticipated initial mine life of seven years for the Kilba project with an internal rate of return of 34% and a NPV of $36 million at seven percent.
    • Tungsten concentrate grade of >68% WO3 with 80% tungsten recovery and an average production p.a., WO3 of 154,000 mtu to give a total production (LOM), WO3 of 1.1 million mtu
    • Capital cost of $56 million with an average LOM operating cost of US$212/mtu
    • Maiden JORC Resource of 1.3Mt @ 0.57% WO3 within a much larger resource of 5.0Mt @ 0.27 WO3
    • Off take MOU discussions underway
    • On target for initial production late 2014

Key Property

Tungsten Mining - Kilba Project Map

Kilba Project

Located on a 100%-owned granted mining lease (ML08/0314) in the Gascoyne Region, Ashburton Shire, Western Australia, the Kilba Project is a 12 kilometer circumference skarn deposit which rings an elliptical granite intrusion. The project boasts high-grade mineral potential, with coarse mineralogy and hence simple metallurgy. The deposit is shallow and is amenable to open pit mining.

Tungsten Mining recently announced the results of its Scoping Study for the Kilba project which have confirmed the economic and technical viability of the Project.

The Kilba Project has a current JORC Resource of 1.4 million mtu (14,000t) of contained Tungstic Oxide, WO3. Following the positive Study results, Tungsten Mining will now move the Kilba Project on to the next stage of development, including further in-fill drilling and the immediate commencement of Definitive Engineering. Tungsten Mining’s objective is for first production in the final quarter of 2014.

The Scoping Study indicates that Kilba is an economically attractive project, and the relatively low pre-production capital cost of $56 million is a low capital barrier for Tungsten Mining to overcome in order to join the ranks of the world’s very few tungsten producers outside China. Results from the study indicate an anticipated initial mine life of seven years for the Kilba Project with an internal rate of return of 34% and a NPV of $36 million at seven percent. The project will demand a capital cost of $56 million with an average LOM operating cost of US$212/mtu, and will yield an 80% tungsten recovery rate with a tungsten concentrate grade of >68% WO3. Furthermore, the Scoping Study suggests that Tungsten Mining can expect an average production p.a., WO3 of 154,000 mtu to give a total production (LOM), WO3 of 1.1 million mtu for the Kilba Project.

It is important to note that this Study relates to only the 1.2km strike length of mineralisation that Union Carbide originally delineated over 40 years ago, out of a potential strike length of up to 7km for the mineralised zones that encircle the Kilba Granite within the granted Mining Lease ML08/0314. The remaining potential mineralised contact zones have seen very little significant work to date and provide an excellent exploration target and project enhancement opportunity.

The results confirm Kilba is a viable, stand-alone operation in its current form, and the expectation is that once the Project is in production and generating positive cash flow, the financial resources will be available to apply to extending the life and/or scale of Kilba by the delineation of additional mineralisation around the periphery of the elliptical eye structure that is the Kilba granite.

The Project’s attractive margins and relatively low capital requirements combine to provide a payback of the capital in the first year of operation, and the continuity and relatively simple mineralogy of the orebody should ensure an attractive operating environment for efficient tungsten extraction.

Based on the results of the Scoping Study the Company is moving to immediately initiate a Definitive Feasibility Study, with results expected in the second half of 2013.

kilba-milestones

Summary

Tungsten Mining NL is focused on the rapid evaluation and development of its Kilba Tungsten Project, north of Perth in Western Australia. Kilba has the potential to host a high-grade tungsten deposit that could support an economic mining project. Tungsten received positive results from a Scoping Study in June 2013 and has moved to initiate a definitive feasibility study. Fully permitted, with in-fill drilling ongoing for a maiden JORC-compliant resource estimate and all of the necessary engineering work completed by July, 2013, the Kilba project could be up and running as soon as Q4 2014.

The project features simple open pit mining and a high rate of metal recovery during processing, and is a short lead time, low capital cost proposition.

Overall, tungsten is a bullish commodity, with demand currently outstripping supply as the developing economies continue to grow and thus increase their tungsten consumption per capita even as some of the more established world economies continue to stagnate.

Management

Patrick McManus, BSc Hons, MBA, FAusIMM, FAICD – Non-Executive Chairman
Mr. McManus has a degree in mineral processing and an MBA. He is a mining professional with over thirty years’ experience, whose work has taken him to many locations within Australia and overseas. During that time, he has worked in operational, technical and corporate roles for Rio Tinto, RGC Limited and Bemax Resources Limited. Mr. McManus was a founding director and, from January 2007 to March 2010, managing director of ASX-listed Corvette Resources Limited. He is currently the Managing Director of ASX listed Potash West NL.

Paul Berndt, B.App.Sc. (Prim. Met.), FAusIMM – Managing Director
Mr. Berndt is a metallurgist by profession with thirty-seven years’ experience in the mining industry covering technical, operational, project development and corporate management roles in four states of Australia as well as in South Africa, Zimbabwe, Indonesia, China, Peru, Venezuela and Spain. His experience has included the process design, project implementation and operational management of industrial minerals, coal, base metals, gold, diamonds and tungsten projects. He was most recently employed as Managing Director/General Manager of a tungsten mining business in Spain for four years and turned that operation around from a struggling performer with severe technical deficiencies into a successful profit-making enterprise.

Francis Loh, Level 2 ACCA – Non-Executive Director
Mr. Loh is an accountant with a Level 2 Association of Chartered Certified Accountants (ACCA) qualification, and is experienced in South East Asian capital markets; with a significant amount of commercial experience with Singaporean companies. Mr Loh was the Group Accountant and subsequently the Finance Manager for Oriental Group Ltd, a Singaporean listed entity from 2005 to 2012. Mr Loh is now a director with a corporate advisory firm, providing personal investment planning and company restructuring services to a variety of clients.

Farlee Walker, GradDip(Acc), CA, CSA – Company Secretary
Ms. Walker is an experienced accountant with a Chartered Accountant and Chartered Secretary qualification. Ms Walker has a background in external audit specializing in exploration, mining and resources, and significant ASX compliance experience gained whilst working for Ernst & Young and the ASX, respectively. Currently in a corporate advisory position at Mining Corporate Pty Ltd, Ms Walker provides financial accounting and company secretarial services to a range of listed exploration entities.

Robert (Bob) Van der Laan, B.Bus CPA – Chief Financial Officer
Mr. Van der Laan is a qualified accountant with more than twenty-five years’ experience in the management of financial and risk management systems of public and private companies, in the resources and engineering sectors. Currently Mr Van der Laan is CFO for Potash West NL and is the sole director of Richmond Resources Pty Ltd, vendor of the 20% interest in the Callie Soak Project, which Tungsten Mining has acquired.

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