North American Tungsten Corporation Ltd NATUF

RE: N.A. Tungsten earns $4.92-million in first qua

[lurkerone]

I managed to pick up 45,000 at 16 cents yesterday..... Wish it was at 12 cents a few months ago but 16 is still good imo. I think PDAC will give some great exposure to NTC as they are the only tungsten producer at the show as far as I can tell, and now a profitable one at that. The timing of a profitable quarter couldn't be better going into the show and having the focus of the 'Talking Tungsten" forum. www.talkingtungsten.com

One important thing to look at for the last quarter turning profitable is the changes in diesel prices (heating oil for reference) and the Canadian dollar. Those two things were very important in them turning the corner to profitability along with the tungsten composites jv and higher production, better grade control and higher recovery.

The Canadian Dollar averaged 83 cents in the 1st quarter. Right now its been averaging around 79 cents. From what I get out of the MD&A, for every 1 cent drop in the $CAD they will realize $200,000 more in net earnings for the quarter. If they average 79 cents for the 2nd quarter that would realize another $800,000 in net earnings compared to Q1. Heating Oil (close to diesel) prices averaged about $2 per gallon in the 1st quarter. They have been averaging less than $1.50 per gallon in the first two months of Q2. That should equate to about a 25% drop in fuel costs which were $3.5 Million in Q1. A 25% drop could see another $875 Million put on the bottom line in Q2. These two items could increase earnings about $1.7 Million for Q2. The tungsten price has weakened a little (less than 10% from last quarter) but I'm not sure how that effects their contracts. The better $CAD exchange rate more than offsets that.

They are also looking for additional recovery improvements as a sheelite scavenger column cell was put into operation toward the end of Q1 and the full effects should be seen in Q2.

I think if they take out the $3MM gain on the TDI transaction and look at the $1.8 Million net earnings for the quater and project that forward to Q2, with the gains again in currency and fuel savings and improved recovery again, I think its very possible to see their earnings increase by 100% to $3.6 Million..... Forward looking annual earnings would then be $14.4 Million or 11 cents per share. 6X EPS multiple gives 66 cents per share valuation. I think thats very possible after the Q2 numbers are released on May 31st.

So could be a 400% gain in the cards in the next 3 months here if things pan out the way I think they will. This valuation is not including any value for the Mactung project.

lurk