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European Ferro tungsten prices crept up for the week as buyers drew down inventories in Rotterdam.

For a second week in a row, the Lunar New Year Holiday in China meant lack of supplies were coming out of the country. Ferro Tungsten was quoted higher at around US$30 a kg from US$29 a kg last week and US$25 a kg the week before, as consumer enquiries for the metal were met with empty hands. Chinese producers are closed and they will stay closed until after the holiday next week.

Once the New Year holiday is over, Chinese production will resume but cutbacks and plant closures are expected to continue.  Overall, traders said there was very little business being done and they do not expect to see a real recovery until the second half of the year.  The selling prices of tungsten ammonium paratungstate (APT) have remained steady between US$235 and US$245 per metric tonne unit during the same period. The outlook for tungsten in the long term continues to be optimistic with increased demand expected in the coming year.

Christopher Anderson shares an optimistic view on the tungsten industry’s future. As the vice-president of business development for Geodex Minerals Ltd. (TSX.V: GXM), Anderson helped host a recent industry meet-and-greet to get investors hyped up about the metal. Geodex has been working a tungsten deposit at its Sisson Brook property near Fredericton, which executives hope will one day be among the largest and least expensive open-pit tungsten mines in the world. The company took a break from drilling last fall due to lack of credit and instead invested their time and money into mineralogical studies. Anderson said market factors will not impede Geodex from moving forward. “We are cashed up and we have got a great deposit.” Experts predict commodity prices won’t inch up much before the end of 2009, however, mining is anticipated to be one of the first industries to rebound from the economic crisis.

Company news

Uran Limited (ASX:URA)  has entered into an option to purchase the Victor tungsten project, in California. The project, located in the historic tungsten mining District of Inyo County consists of 13 granted patented lode mining claims, covering a small, high-grade tungsten mine. Uran, through its wholly owned subsidiary Juno Minerals, has paid an option fee of $50,000 under the terms of the agreement, and has the right to acquire a 100 per cent stake in the property, by paying $150,000, within two years. The Victor project was mined for tungsten and copper prior to World War I, and briefly after World War II, however, the planned construction of a tungsten mill on the property failed when the government price support program for tungsten ended in the early 1950s.There has been no work done on the property since that time. Assay results have now been received for 19 rock chip samples, taken in October, and most samples evaluated have shown copper and tungsten values, with elevated uranium and molybdenum values, as well as anomalous gold and silver. Uran stated that the mineralized skarns at Victor, which were not exploited by historic mining, had significant potential to host economic tungsten and copper. Exploration on the project would be deferred until work at Juno Minerals’ other project, the Finley basin in Montana, was completed, and economic conditions improved.

Thor Mining PLC recently announced that developing the Molyhill tungsten-molybdenum project remains the company’s main focus.  Thor has met with many potential financiers and partners with a view to getting the project into operation.” The discussions have been very positive to date, however the mood is cautious in the current financial climate, “the group said in an update for the quarter to end-December 2008. Investigation of alternatives to reduce capital and operating costs for the project continue.

Shenzhen, the Chinese city that accounts for 60 per cent of China’s total annual exports, is witnessing declining demand for tungsten.

In 2007, the latest year for which industry data is available, it shipped $23 million worth of tungsten carbide powder and alloy jewelry. Last year, Shenzhen was estimated to export just $18.4 million worth, a reduction of 25 per cent. There are a few factors that have caused this, one being the global market slump.  Perhaps, though China’s efforts to control the tungsten industry are backfiring on its own local businesses.

China has an overwhelming monopoly on the market; an estimated 85 per cent of world tungsten thirst is quenched by China.  China has taken steps in the past to make sure that they are in control of this metal prized for its hardness, and used in military applications.  China has been accused of dumping; flooding the markets with tungsten as global suppliers come online; and, when China feels its stranglehold on the industry is strong enough, and they have been accused of price gauging. Now, with the entire world in a slump, and not enough demand on the domestic market, the country should been keen to export all they can.

Company news

Sultan Minerals Inc. has received the 12-month environmental base study completed by tWardrop Engineering Inc. The study was carried out over its Jersey-Emerald property, located 10 km south of the community of Salmo in southeastern BC. The report represents another milestone in Sultan’s efforts to expedite the re-opening of this historic tungsten and lead-zinc producer. The report documents an aquatic environmental baseline study conducted for Sultan in and around the Jersey-Emerald property from August 2007 to July 2008. The study was conducted in support of a proposal for future certification under the British Columbia Environmental Assessment Act to provide a basis for assessing the potential effects of the project on the aquatic environment. The study included sampling stations located over and adjacent to the historic mine.In May 2007, a NI 43-101 scoping study completed by Wardrop demonstrated that the Jersey-Emerald Tungsten deposits could support a potentially commercial 1,100 t/day mining operation at a tungsten APT price of $244/MTU. The price of tungsten has since remained relatively stable with the current average price being $246/MTU for APT concentrate as of December 10, 2008. The report suggested that the economics of the operation would be substantially improved by expanding the tungsten resource with additional diamond drilling in order to justify a 2,000 t/day operation. Sultan has since completed approximately 20,000 meters of diamond drilling in 87 diamond drill holes and is awaiting results of an updated tungsten resource estimate the updated NI 43-101 compliant resource report is expected to be available in early January. Assays are pending for samples from a program of trenching and surface prospecting recently completed over the south end of the Jersey-Emerald property. A large tungsten and lead-zinc soil anomaly centered 3.0 km south of the historic mine suggests there is good potential for additional new discoveries on this 9,300 hectare property.

North Bay Resources has signed a contract with Hidalgo Mining International Inc. to engage in a joint-venture for the development of North Bay’s Gold Hill Project in British Columbia, Canada. Terms of the agreement call for Hidalgo to commit up to $1.25 million USD over three years for developmental drilling and surface ore recovery. North Bay and Hidalgo will each own 50 per cent of the Gold Hill Project and will equally share any and all net revenue, including any near-term profits generated from surface ore recovery operations. The Gold Hill mine’s past production averaged over 29.47 grams per tonne gold and 54.11 grams per tonne silver, while production figures from the Silver Dollar and the Lucky Boy workings averaged 9.39 grams per tonne gold and 335 grams per tonne silver. More recent exploration has outlined an extended strike length of over 2600 meters, with reported assays from underground workings grading as high as 57.81 grams per tonne gold and 3790 grams per tonne silver. Recent drilling programs on properties immediately adjacent to the north and the west of Gold Hill in the 2007-2008 exploration season intersected significant levels of tungsten and molybdenum.

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