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Tungsten Mining NL (ASX:TGN) announced results of its Scoping Study for its Kilba project in the Gascoyne region of Western Australia. The Study confirms the economic and technical viability of the Project. Based on the results of the Scoping Study the Company is moving to immediately initiate a Definitive Feasibility Study (DFS), with results expected in the second half of 2013. Highlights from the Scoping Study include: capital payback within the first year of operation, anticipated initial mine life 7 years, capital cost of $56 million, and 80% Tungsten recovery overall.
Highlights
- Scoping Study delivers very attractive economics for Kilba Project
- Viability of open cut mine and conventional gravity process plant confirmed
- Capital payback within first year of operation
- Results provide confidence to immediately initiate a DFS
- Off take MOU discussions underway
- On target for initial production late 2014
- Key Scoping Study findings* are:
- Anticipated initial mine life 7 years
- Total production (LOM), WO3 1.1M mtu
- Average Production p.a., WO3 154,000 mtu
- Capital Cost $56 million
- Average LOM Operating Cost US$212/mtu
- Tungsten recovery overall 80%
- Tungsten concentrate grade >68% WO3
- IRR 34%
- NPV at 7% $36 million
*Cautionary Statement
Tungsten Mining cautions that the Scoping Study referred to in this report is based on low-level technical and economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Scoping Study will be realised.
Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resource that is the subject of the Scoping Study will be converted into mineral reserve. No mineral reserves were estimated as part of the Scoping Study.
This scoping study is preliminary in nature, as its conclusions are drawn partly on inferred resources (being 70% of the total stated tungsten resource) as well as indicated resources (30% of the total). There is a low level of geological confidence associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that the production target itself will be realised.
Tungsten Mining Managing Director Paul Berndt said:
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.
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