The ferro-tungsten market has been stagnant in recent weeks, with only a handful of transactions taking place. Last Friday, in China, inactivity translated into a dip in prices. Ferro-tungsten fell to $25.90 a kilogram, down from the recent rate of $28.00 per kilogram. One producer commented, “There has been a lack of buying activity and there’s no sign that we’ll see a recovery.” Tungsten prices in the United States remain unchanged, but market sources agree lack of purchases could drive down prices. Last October, the price of tungsten took a dive. As a result, in China, an estimated 80 per cent of producers curbed output.

With the promotion of major infrastructure projects around the world, the tungsten market could see a reversal back to previous trends.  The tungsten market is volatile, with a few key players controlling the market share.  In infrastructure development needs tungsten, then prices could be in for a wild ride; especially considering the level of output cuts in the industry.

China’s Jiangxi Ganzhou City has earmarked US $260 million to procure tungsten and rare earth products. Ganzhou will buy 10,000 tonnes of scheelite and tungsten products, and 10,000 tonnes of rare-earth ore to help metal firms struggling on the back of the commodities price collapse. Ganzhou, a city in eastern China’s Jiangxi Province, and the world’s largest tungsten making region, is building up its own tungsten and rare earth reserves. China’s State Reserves Bureau has been buying various metals, including copper, aluminum, zinc and nickel.

A new, large deposit of tungsten ore has been discovered in east China’s Anhui Province.  With a proved reserve of 96,200 tonnes, the finding in Qimen County is an important one for the country as only 144,000 tonnes of tungsten ore have been found between 2001 and 2007. China’s tungsten reserves are mainly in the provinces of Hunan, Jiangxi and Henan, which jointly account for 61.37 per cent of the total national reserve. China, along with Russia, Canada and the United States, is a major tungsten producer in the world. It holds 40.5 per cent of the world’s proved reserves.

Company News

Largo Resources Ltd. (TSX.V: LGO) has acquired a 70 per cent interest in the Northern Dancer property in Yukon Territory. Largo has the option to earn the remaining 30 per cent  interest in the property by making a cash payment of $5,000,000 or issuing the equivalent value in shares of the company within twelve months. Northern Dancer hosts widespread tungsten-molybdenum porphyry style mineralization. The updated mineral resource for the deposit at a cut-off grade of 0.06 per cent WO3 is estimated as measured mineral resources of 30.8 million tonnes grading 0.114 per cent WO3 and 0.030 per cent Mo, indicated mineral resources of 192.6 million tonnes grading 0.100 per cent WO3 and 0.029 per cent Mo. The measured and indicated mineral resource estimate contains 226.9 k tonnes of WO3 and 65.2 k tonnes of Mo. Inferred mineral resources were estimated to be 201.2 million tonnes grading 0.089 per cent WO3 and 0.024 per cent Mo containing 178.3 k tonnes WO3 and 48.9 k tonnes of Mo.

Zijin Mining Group’s profits increased by 20.32 per cent YoY, while it’s operating revenue grew by 11.32 per cent on an annual basis.  The company has attributed the rise in both net profit and operating revenue to increased output of its major products, as well as higher prices. Zijin Mining produced 57.32 tonnes of gold last year, 16.26 per cent higher than the previous year; it also produced 61,409 tonnes of copper in concentrate form increasing by 29.98 per cent from the previous year.  Due to production cutbacks after zinc prices plummeted in the second half of last year, its output of zinc in concentrate form decreased by 25.1 per cent year on year to 33,680 tonnes and its zinc ingot production dropped 11.18 per cent year on year to 101,437 tonnes.

By the end of 2008, Zijin Mining held a total of 701.5 tonnes of gold reserves, 1,700 tonnes of silver reserves, 9.64 million tonnes of copper reserves, 390,000 tonnes of moly reserves, 5.28 million tonnes of lead and zinc reserves, 100,000 tons of tungsten reserves, 151 tons of platinum and palladium reserves, 100,000 tonnes of tin reserves, 667,500 tonnes of nickel reserves, 168 million tonnes of iron ore reserves, 43.97 million tonnes of bauxite reserves, and 300 million tonnes of coal reserves. The company’s planned production for 2009 includes 4,556 tonnes of tungsten concentrate. In addition, Zijin Mining has also revealed its intention to acquire mineral resources due to currently low commodity prices.

The bear market has influenced tungsten prices

By Leia Michele Toovey- Exclusive to Tungsten Investing News

Tungsten, like all other metals, has seen a large amount of its value lost in the 2008 market crash. 

Some stability though has been lent to tungsten metal due to the fact that China has a monopoly on the market.  China has curbed output to coincide with the price collapse, and this has lent some stability.  A minor metal that has received more attention recently, Research and Markets has announced the addition of the Tungsten Market Review report to their offering. This report focuses on the study of the global tungsten markets. It provides region analysis on tungsten production. It features major tungsten producers, prices, supply and demand conditions, international trade, etc. The review also includes future outlook of the world tungsten market.

Company news

Golden Predator Mines Inc. (TSX: GP) reports that David Cole has resigned from the board of directors and has accepted the position as a member of its Technical Advisory Board. Golden Predator is a tungsten and gold mining company focused on mineral development in Nevada and surrounding states. The company intends to augment its position in the domestic tungsten business through high grade gold development and production. Its current principal project is the Springer Facility, a 1,000 ton per day mine and mill complex built by the General Electric Company between 1979 and 1982. While it had a 13-year mine life at time of construction, GE only operated the facility for eight months when it ceased production in 1982 and placed Springer on care and maintenance due to falling tungsten prices. Golden Predator is in the process of re-commissioning the mill, and when completed, it will be the only operational tungsten mill in the United States

Happy Creek Minerals Ltd. (TSX-V: HPY)  has received promising results from a rock sampling program on its 100% owned Fox tungsten-molybdenum property, in British Columbia, Canada. The rock sampling was a follow up to drilling in 2007 that confirmed a large scale tungsten-molybdenum system approximately 1.5 kilometers by 500 meters in dimension. The first-ever, widely spaced drilling returned several potentially economic intercepts including 5.0 meters of 0.33 per cent WO3 (tungsten trioxide), 2.0 meters of 0.74 per cent WO3, and 1.7 meters of 0.51per cent molybdenum. On surface, blocks of this material have returned up to 12.778 per cent molybdenum and 5.65 per cent WO3. The 2008 exploration of the Ridley Creek area, located approximately four kilometers north of the Nightcrawler zone, comprised geology, prospecting and silt and soil geochemical surveys that detailed and expanded upon the positive 2007 soil and rock results. In addition to tungsten, rock sampling in 2008 also returned up to 0.19% molybdenum from quartz veins within the quartz monzonite intrusion. Tungsten, and the presence of molybdenum in quartz veins within an intrusion very similar in age to the Boss Mountain, supports the Company’s view that a porphyry style bulk tonnage molybdenum-tungsten deposit is responsible for the mineralization.

Brett Resources Inc. (TSX.V: BBR) is pleased to report drill results from eight holes on the Hammond Reef Property in Ontario, Canada. Highlights from these holes include hole BR-113 with 154 meters of 1.21 g/t Au. Brett’s President and CEO Patrick Soares commented, “Brett continues to build on its drilling success at Hammond Reef. Step-out drilling south-east of Mitta Lake verifies the resource block model which predicts that thick mineralized gold lenses plunge gently to the north-east. Southwest of Mitta Lake, drilling verifies the presence of thick gold mineralized lenses that start near surface and reach a depth of approximately 300 meters below surface. These results are also consistent with the resource model that indicated that 97 percent of the 4.8 million ounce resource lies within 300 meters of surface.” The Company filed its NI- 43-101 report with SEDAR.

If China curbs tungsten supply, will prices stabilize?

By Leia Michele Toovey- Exclusive to Tungsten Investing News

Tungsten, like all other metals has witnessed a precipitous price drop.  Data coming out of China, producers of around 85 per cent of the world’s tungsten, shows that most of the Chinese Ferro-tungsten makers have either shut down or decreased output.

Most producers are confident that the low for the metal used in military applications is only for the short term. With China having such a monopoly on the market a ubiquitous output slash may stabilize the price. The future, however, remains unclear.  We have seen an unprecedented amount of mine shutdowns in the other metals, all to no avail at controlling the quick drop in prices.

Company news

Newcrest Mining may limit gold extraction at Australia’s largest gold mine, the Telfer mine, and instead turn its focus to mining a nearby tungsten deposit.  Newcrest was debating selling the O’Callaghans deposit but will instead look into mining it, fundamentally changing the production profile of the big Pilbara mine. The intention to develop the O’Callaghans deposit comes as Newcrest tries to cut costs and debates plans flagged three months ago regarding selling the deposit. Newcrest believes that by extracting the tungsten they could appreciably boost revenues.

“We mainly consider O’Callaghans as a way we can configure Telfer to push it further down the cost curve for the long term,” company President Smith said yesterday after the company’s annual meeting in Melbourne. “The Chinese have restricted exports of tungsten so there is a restriction in supply points around the world.” Resource project buyers have lost their appetite over the past three months as global markets have gone into meltdown, but Smith said Newcrest would still sell at the right price. To mine O’Callaghans, which also contains copper, lead and zinc, the plant at Telfer would need to cut back on ore from the main pit, meaning reduced gold production of up to 10 per cent. A timetable for developing the deposit, which was only discovered about five months ago, is expected to be revealed later this year with a resource statement.

Golden Predator Mines Inc. (TSX:GP) will receive CDN $1 million plus accrued interest from Midway Gold Corp. pursuant to amendment and early repayment of a loan facility provided by the Company to Midway earlier this year. On July 17, 2008, Golden Predator and Midway Gold Corp. announced that the two companies entered into a term sheet describing the principal terms of a proposed business combination. On September 15, 2008 the term sheet expired and the business combination did not proceed. Pursuant the term sheet, Golden Predator agreed to provide a loan facility of $5 million to Midway that could be drawn in installments of $1 million. On August 28, 2008 Golden Predator advanced $2 million of the facility to Midway. In exchange for the advance, Midway issued a promissory maturing with interest at prime plus 2 per cent on July 16, 2009.Golden Predator and Midway have mutually agreed to release each other from all matters related to the Term Sheet and Midway has agreed to pre-pay Golden Predator $1,000,000 of the loan amount advanced, together with accrued interest.
Oriental Minerals Inc. (TSX.V: OTL), has negotiated a deferment of the $1.2 million vendor payment obligation on the Sangdong tungsten-molybdenum project in South Korea.  The payment due November 30, 2008, has now been deferred to April 30, 2009. Ian Fodie, Oriental Minerals’ President and CEO said, “We are very grateful to Sangdong’s vendor,  Sim, for his continued support of Oriental Minerals during these challenging times in the capital markets.  This deferment gives us more flexibility as we move toward the completion of the Sangdong PEA.”

Second major Tungsten project outside of China faces delay

By Leia Michele Toovey- Exclusive to Tungsten Investing News

The past week has seen many new company developments when it comes to tungsten.

Vancouver-based Golden Predator Mines announced the intersection of near surface tungsten mineralization in drilling at its wholly-owned Springer tungsten project in Nevada. On the news of the resource discovery, shares jumped 13 per cent to 87 cents.  

Prior to this announcement, the company announced that it would have to undertake a series of cost cutting measures at the Springer Project as a direct result of the current global financial mess. Although the cost-savings programs will delay eventual startup of the Springer mill, all permitting activities and operational readiness programs will continue, which should better prepare the Company for the return of order to the markets.

The announcement that Golden Predator will delay the opening of the mine was a huge blow to non-Chinese tungsten consumers. China produces 90 per cent of the world’s tungsten, and regards it as a strategic metal. Fears are being expressed that the country could cut exports at any time, a step it has taken in the past.

In what is being interpreted as another blow to non-Chinese consumers, Advanced Material Japan Corp. issued a press release stating that it had suspended a proposal to reopen the Kiwada Tungsten Mine after a 16-year hiatus. This complicates the nation’s plan to reduce dependence on imports of the metal. The plan was halted because of environmental concern, a lack of miners and problems estimating deposits and acquiring the rights.

Like other countries across the world, Japan is dependent on primary producing China to supply the nation with its Tungsten needs. The metal tripled in price in 2004-05 as rising demand fuelled a boom in commodity prices.  China is known to cut off exports when their booming economy is in need of metals.  Given the recent growth of the region there are many fears that China will turn off the tap in the near future.

This week, Largo Resources (CA:lGO)  issued an update on their  Northern Dancer Project. The project is one of the world’s largest known tungsten-molybdenum porphyry systems, with mineralization  hosted in fractures and veins associated with a northeast-trending sheeted vein system in calc-silicate (skarn) rocks and spatially related to a felsic intrusion (quartz-feldspar porphyry). The deposit, which has been tested by drilling for 1500 meters along strike, 500 meters vertically and 600 meters in width, remains open along strike to both the northeast and southwest as well as at depth.

This past week, Largo announced the receipt of results of the five additional drill holes on the project. The 2008 drill program focused on upgrading and expanding the limits of the higher-grade tungsten and molybdenum zones outlined during the 2007 drill program. The second intention of the addition drilling was a further upgrade of the inferred and indicated resource to a measured and indicated category in order to support a pre-feasibility Study. Drill results continue to confirm the higher-grade tungsten and molybdenum zones. Currently, core logging and splitting is continuing and is expected to be completed before the end of September.

Historical work on the property was completed by AMAX Minerals Exploration from 1977 to 1980.  Largo completed a 17-hole diamond drill program in 2006 and 26-hole program in 2007. On April 10, 2008 Largo announced an updated NI 43-101 compliant resource consisting of indicated of 140.8 million tonnes grading 0.10 per cent WO3 and 0.026 per cent Mo and Inferred resources totaling 253.2 million tonnes grading 0.10 per cent WO3 and 0.022 per cent Mo.  In addition to this key property, Largo Resources has a large (60,000 hectare) land position and prospective gold exploration properties in Ecuador, and the advanced stage Maracas Vanadium-PGM deposit in Brazil.

Tungsten companies are making changes to cope with the new market

By Leia Michele Toovey- Exclusive to Tungsten Investing News

The market has been increasingly volatile over the past months. With this week’s huge adjustments, many businesses have announced strategic measures.

Tungsten companies are no exception, announcing some business changes this week as well. In direct response to the market conditions of the past months, Golden Predator Mines Inc. (TSX: GP) is cutting costs and delaying the mill startup at its Springer tungsten redevelopment in northwestern Nevada. This announcement was issued by the company on Wednesday, one day after Midway Gold Corp (TSX.V:MDW) called off its proposed acquisition of the Golden Predator mines that was announced this July. The all-share deal, worth approximately US$60 million, would have expanded Midway’s portfolio in Nevada. Although the cost cuts will delay the eventual startup of the Springer mill, Golden Predator is holding its permitting activities and many operational readiness programs in preparation for a quick start up following the return order to the financial markets.

Golden Predator acquired Springer Mining Co. in December 2006, paying General Electric Co. US$4.5 million and assuming about US$1million in reclamation obligations. The property includes 12 sq kms of land and tungsten mine and mill complex in Pershing County.

After four years of development, and a US$120 million investment, Metals miner Straits Resources Ltd (ASX.SRL) has officially re-opened the Hillgrove antimony, gold and tungsten mine near Armidale in New South Wales. The mine was acquired from a private company in April 2004 for US$8 million. The mine boasts historic production of more than 720,000 ounces of gold and 50,000 tonnes of antimony. Straits Resources plans to produce 20,000 oz of gold, 10,000 tonnes of antimony and 30 tonnes of tungsten from the mine each year. The tungsten will be produced in tungsten concentrate form. Straits Resources expects to complete the de-merger of its 47 per cent held subsidiary, coal miner Straits Asia Resources Ltd, by mid October, leaving the focus on metals production.

Wolf Minerals (ASX.WLF) has announced the preliminary results of it’s feasibly study on the Hemerdon Ball Mine. Wolf Minerals was incorporated on September 20, 2006 as a metal exploration and development company. Wolf listed with strong support and made a sterling debut on the ASX in February 2007; the success that followed led to Wolf being hailed the best performing IPO for 2007. The new Hemerdon project is set to become Wolf’s flagship property. In April, Wolf raised US$3 million at US$1 a share to further the venture, which is currently at its feasibility stage. The scoping study indicated a US$160 million cost for a 3 million tonnes-a-year facility, with production of 3000 tonnes of tungsten and tin the feasibility study cites an inferred resource of 82 million tonnes at 0.22 tungsten and 0.022 percent tin and is undertaking a further drilling program to shore up this estimate. The complete feasibility study is set to be delivered in the June quarter of 2009.

Strong metal prices helped northern Australia focused Thor Mining PLC (ASX.THR) trim full year pre-tax losses. The group, which specializes in tungsten-molybdenum and uranium projects, said pre-tax losses narrowed to £1.2m in the year ended June 30, 2008 from £1.4m the year before. Thor said that significant progress in the 2008 financial year was offset by difficult share market trading conditions around the world. While difficult trading conditions persist the fundamentals of its flagship project, Molyhil remains sound it said in a company statement. The company is looking to expand the portfolio of projects in the specialty metals field, with the Hatches Creek multi-commodity project on their radar.

30 percent of world's tungsten supply comes from recycled scrap

By Leia Michele Toovey- Exclusive to Tungsten Investing News

Scrap recycling is an important facet of the globe’s tungsten supply, with approximately 30 per cent of the world’s supply coming from recycled material.

Last Wednesday, Liquidity Services, Inc. (LSI) kicked off it’s first-ever sale for scrap tungsten. The auction is of three lots containing over 190,000 pounds of the scrap metal in the form of Tungsten Nylon Core (95 per cent tungsten, 5 per cent nylon), Completed Projectiles (inert nylon core, steel insert and copper jacket), Silver Tungsten Nylon Core (57 per cent tungsten, 43 per cent nylon).

LSI is accepting bids for this “unique” sale through its online auction marketplace. The scrap tungsten is made available through the U.S. Department of Defense’s Army Ammunition Plant in Missouri, and is part of the overall effort to recycle scrap that has a remaining useful life. The tungsten processing industry is able to treat and recover almost every kind of tungsten-containing scrap. Tungsten scrap, due to its high tungsten content in comparison to ore, is a very valuable raw material. The auction closes on September 12 at 8 p.m ET

Survey in British Columbia

Geoscience BC and Natural Resources Canada have announced the start of a US$542,000, airborne Geophysical Survey in the Kootenay Area of British Columbia. It will cover a 609 sq. km. area that the BC Ministry of Energy, Mines and Petroleum Resources has rated as having some of the highest mineral potential in British Columbia.

The search will provide more information on the sub-surface stratigraphy in order to identify new exploration targets beyond the limits of the historic mines. According to the President and CEO of Geoscience BC, Lyn Anglin, “The aim is to provide new geoscience information to help attract additional mineral exploration investment into this region and its communities.” The survey will be flown by Fugro Airborne Surveys and is expected to commence in mid-September.

Sultan Minerals, (TSX.V: SUL), one of the largest mineral title landholders in the survey area, is also participating in the survey. Sultan is contributing to the project by funding the flying of intermediate, 100-metre spaced survey lines over its Jersey-Emerald Tungsten property within the Geoscience BC survey area. Sultan’s historic Emerald Tungsten mine, also included in the survey, is Canada’s second-largest tungsten producer.

The detailed airborne geophysical coverage is expected to identify new exploration targets outside of the seven historic mines on Sultan’s extensive property. In addition to Sultan’s Jersey Mine, the HB and Reeves- Macdonald mines will be included in the survey area. These mines are the second, third and fourth largest historic lead-zinc producers in the province respectively.

Positive drill

Peel Exploration (ASX: PEX) has announced positive drill results from its 100 per cent-owned Attunga Project. RC drilling at the Kensington Gold-Tungsten Prospect of the Attunga Project area, has encountered widespread gold mineralization.

Encouragingly, gold mineralisation was intersected in all drill holes. In July 2008, Peel completed an RC drilling program comprising 10 holes for 1,229m, discovering significant tungsten mineralization in the form of scheelite. Prior discovered tungsten anomalies have been sent to ALS Chemex with certain individual meter intervals returning up to 0.21 per cent WO3. Adding this recent gold discovery to previously targetted tungsten mineralization confirms that Kensington represents a significant gold-tungsten system.

Exploration at Kensington in the ’80s reported substantial gold and tungsten mineralization including the delineation of an historic tungsten resource. The only other drilling completed at Kensington occurred in 1987 and comprised 7 diamond drillholes for 822m. The drilling has highlighted several areas requiring follow-up with a particular focus on the near-surface gold potential. To date, drilling has been relatively shallow, and Peel believes that good potential exists for the discovery of an economic tungsten-gold system.

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By Leia Michele Toovey- Exclusive to Tungsten Investing News

Tungsten applications show a strong future outlook

The surge has been due to China’s monopoly of the market. China currently produces roughly 85 per cent of the world’s tungsten, and has recently begun to restrict foreign access to the tungsten it produces.

With China hoarding its production for its own growth, the rest of the world is scrambling to find new sources of supply, as prices move upwards. In China, the Ministry of Commerce issues product export quotas for the domestic companies. International companies have been at the mercy of these quotas. For example, the second quota released in 2008 allocated 10785.55 tonnes of tungsten in a variety of forms, down 10.2 per cent when compared with last year’s first batch of quotas. 

Over the past year, the price of tungsten has undergone even more price fluctuations due to allegations that China was suspected of ”smuggling” exports to European countries. Tungsten Carbonate is the second hardest natural material on earth, is corrosion resistant, does not break down or decompose, and of all metals, has the highest melting point and tensile strength. Given its unique physical attributes, tungsten has many applications in which it is virtually irreplaceable, including light bulbs and electrical applications, and as a super alloy used in the mining, petroleum, military, construction and metalworking industries. Calcium and magnesium tungstates are widely used in fluorescent lighting; other salts of tungsten are used in the chemical and tanning industries.

Other company news

North American Tungsten Corporation Ltd. (TSX. V: NTC) continues to intersect high-grade tungsten mineralization at depth of its Cantung Mine.  The drilling program successfully identified high grade tungsten mineralization down to the 3400ft level, approximately 300ft below the current lowest mine level workings (3700 level). The aim of the Q3/08 drill program is to further define the high grade tungsten zone for inclusion in an updated National Instrument 43-101 resource estimate and mine development plan.

Yankee Hat Minerals Ltd.  (TSX.V: KHT) has entered into two option agreements to acquire 100 per cent interest in the Achtung Tungsten Project located in northwestern British Columbia, and the Birdtung Tungsten-Tin Project located in the southern Yukon. With these, Yankee Hat now has eight tungsten projects at varying stages of development, and one of the most active tungsten exploration programs in the Western World.

The first concentrates of tungsten and molybdenum have been produced from the historic Wolfram Camp mine, west of Dimbulah on Queensland’s Atherton Tablelands. Wolfram Camp has been producing wolframite since the 1890s, and was closed down in the 1980s when the commodity price crashed. Queensland Ores Limited has taken over the mine and will soon commission a metal treatment plant, allowing the mine to swing back into full commercial production.

According to Managing Director Taff Greenwood, the company aims to produce 1000 tonnes of tungsten concentrate and 80 tonnes of molybdenum concentrate in the first year.