Great Read!RESOURCES NEWFOUNDLAND AND LABRADOR OCTOBER, 2005 19
BY CRAIG WESTCOTT
When Don Moore claims he was born
in a Red Lake mining shack, you get
a hint that you’re dealing with a mining
promoter.
Moore, president of Kermode Resources
and a director with Playfair Mining, has
been active in Newfoundland the last several
years thanks to a handful of gold
prospective properties pointed out to him
by veteran geologist Charlie Dearin.
But the thing that has Moore excited
these days is a tungsten deposit on
Newfoundland’s south coast, near the tiny
outport of Grey River.
Though it’s relatively small by world
standards, the 520,000 tons grading nearly
one per cent wolframite, which contains
tungsten, is the largest of its kind in
Canada.
Moore is aiming to mine it.
“We ended up acquiring this not
through smart fortitude, but good luck,”
Moore told a roomful of investors, analysts
and junior mining company executives at
the second annual Resource Investors
Forum held at Humber Valley Resort last
month.
“We had actually picked up this ground
as the result of some very interesting gold
projects and we ended up owning Canada’s
largest wolframite deposit.”
The deposit was originally held by
Asarco, operators of the Buchans mine.
Asarco staked it in 1956 and worked the
property until 1970. According to Moore,
Asarco had plans to mine it but then the
bottom fell out of the tungsten market. He
added that in today’s dollars, Asarco spent
about $15 million exploring Grey River
and he is confident in the numbers produced.
“China is the largest producer and the
largest consumer of tungsten,” explained
Moore. “China has controlled the tungsten
market since the 1970s, and this project
we’re talking about was shelved as a result
of the tungsten market collapse, because
China was supplying 85 per cent of the
world’s tungsten. The tungsten reserves in
China are now being depleted. They can
now see where they’re going to run out of
tungsten, so they’re starting to put levies on
exports. And that is having a dramatic
impact on the world markets.”
Moore said tungsten prices have risen
from $100 a tonne (U.S.) five years ago to
$320 last year. The mineral is trading at
about $220 a tonne lately.
And with tungsten being used in everything
from incandescent light bulbs to drill
bits, specialty steels and even jewelry,
Moore figures demand for it is going to
keep growing.
“So we want to advance this project
towards production, we want to take the
work that Asarco has done in the past and
bring it up to a 43-101 compliant reserve,”
Moore said. “We believe the work Asarco
did on this project is exemplary and a credit
to all guys in the mining game. We’re
committed now to our high grade tungsten
deposit and I emphasize high grade because
any rock that is worth $220 a tonne in my
books is high grade. The reason I say $220
rock is that most people don’t know anything
about tungsten, but they do understand
dollars.”
Moore said Playfair is digging 40 channel
samples across the vein’s surface to compare
assay results with Asarco’s numbers.
Playfair has also shipped a 1,000 pound
bulk sample to Vancouver for processing to
get an idea of what the tungsten recovery
rate will be. An engineer has also been hired
to do a scoping study on the deposit to give
Playfair an idea of what its mining options
are and what the costs will look like.
Early indications are that mining and
milling costs may run to about $125 a
tonne, Moore said.
“Capital costs are going to be relatively
low. We figure we can get away with about
$6 million in capital, plus the debt required
to put this property into production.”
Moore was quick to add that the reserves
indicated from Asarco’s work focused only
on one vein and there are more on the
property and a lot of other ground to be
explored.
“This could be the tip of some kind of an
iceberg representing a copper, tungsten
opportunity at depth,” Moore said.
“Our focus however is going to be to put
this relatively small deposit into production
as quick as we can considering the window
of opportunity in the financial markets due
to the increase in the price of tungsten,”
said Moore. “We don’t know how long this
opportunity is going to last. The last time
tungsten prices ran, they were up for over
five years. We’re quite confident that we’ve
got three to five years to get this into production.
And based on the general world
consumption of tungsten, we think that
opportunity could stretch much farther.”
Playfair has $350,000 in working capital
in the bank and has plans to raise another
$600,000, he added, most of it earmarked
to advance the tungsten project. Work on
the gold projects will also continue.
“When I look at Newfoundland, I think
it’s the new found land of opportunity,”
Moore said.
cwestcott@theexpress.ca
Craig Westcott photo
Playfair Mining director Don Moore telling delegates at an investors forum last month
about the company’s tungsten project near Grey River. “We want to advance this project
towards production,” says Moore.
MINING
Moore touts tungsten play