North American Tungsten Corporation plans to re-open its Cantung mine by October.
The mine, located just past the Northwest Territories border and 300 kilometres from Watson Lake, closed in October of 2009 due to slumping tungsten prices and the large stockpile of concentrate it had amassed.
But tungsten prices have since rebounded, from a low this winter of $185 per metric tonne unit (equal to 22 pounds) to today’s prices of $242 per MTU, “and climbing,” said CEO Stephen Leahy.
Demand has also surged. Customers have run down their inventories and are once again looking to enter long-term purchasing agreements.
“They’re all over us,” said Leahy. “Eight months ago, they wouldn’t take our calls.”
And the company has upgraded its mine equipment during the closure period, which Leahy said will result in a more efficient operation. The mine now has improved mill circuitry, underground equipment and diesel generators.
“With our old systems, even though we had one of the highest head grades in the world, our efficiency levels and recoveries were lower than most,” said Leahy. “So I think we’ll right that balance.”
Tungsten is a niche metal. It’s best-known use is as the filament inside iridescent light bulbs – it’s used because it has the highest melting point of all metals.
It is also second-only to diamonds in strength, making it a popular material for drill bits, saw blades and snowmobile studs.
And it’s denser than lead, making it a non-toxic alternative in the production of everything from fishing weights to armour-piercing bullets.
“Tungsten is catching a lot of attention lately as a green replacement for lead,” said Leahy. “Shotgun shot, medical, automotive components: there are a lot of new applications that are really gaining traction.
“We want to be known as the green mine company. That’s what we mine – it’s tungsten, it’s non-toxic and it’s benign. It’s not gold. It’s not copper. It doesn’t have that pizazz. But believe me, if people don’t have it, it causes huge problems.”
There’s currently not much of the stuff to go around. Global production is only about 80,000 tonnes a year. China gobbles most of it up.
That’s where one-third of Cantung’s tungsten will be destined. The remainder will go to Japan and Europe.
Either way, all of the mine’s concentrate will be trucked through Watson Lake. From there, tungsten destined for Asia will be driven to Vancouver, while metal bound for Europe will be trucked to Edmonton, then sent by rail to an eastern port.
The mine employs a full complement of approximately 210 workers. Leahy estimates slightly less than half hail from the Yukon. And the mine produces other spinoffs for contractors from the territory, who supply “everything from tires to food” for the mine, said Leahy.
The reopening of Cantung also bodes well for the company’s plans to open another mine, called Mactung, which is 250 kilometres southwest of Ross River, along the Canol Road. The proposal to build an underground mine is currently being reviewed by the Yukon Environmental and Socio-economic Assessment Board.
But even if the mine gets a green light from regulators, the company will still need to raise approximately $400 million to build Mactung. That’s a lot of cash for a junior company like North American Tungsten.
It envisions partnering with a major tungsten producer to build the mine. Having Cantung once again operating, and generating profits, ought to strengthen the company’s pitch as it seeks a partner with deep pockets.
Contact John Thompson at