North American Tungsten Corporation Ltd NATUF

RE: Extremely HIGH GRADE tungsten....

[lurkerone]

ore.... not...  our....

 

Typing too fast.....

 

Regardless of my spelling problems, its pretty obvious that North American Tungsten is a steal of a deal at 16 cents.

 

Total market cap is $20 Million.  They are the ONLY publicly traded Tungsten producer in North America.  They have a PROFITABLE tungsten mine, quite a feat when the world economy is so weak. Why were they able to get to profitability?

From the President and CEO on recent developments at their producing Cantung tungsten mine....

- increased production
- higher recovery rates
- improved grades
- favourable exchange rates
- higher realized tungsten prices
- improved mill processing technology
........"all contributed to our operating profitably during the quarter."

Recent drilling in the past year or so has identified a new zone with extremely high grades.  Development work into that new zone is happening.  Upside from that is increased mine life at Cantung.  Better grades.  Higher profits.

In addition to these good things happening, they are finally starting to realize the benefits from a 3 year process of developing a value added Tungsten processing facility in the US which they are a 43% JV partner in (TDI – Tundra Diversified Industries).  This facility is able to take their lower grade flotation concentrate and upgrade it to APT a much more valuable product with more end markets.  They are also able to produce Blue Tungsten powder.  It looks like they are also going to be selling Tungsten-Polymer composite bullets through with a partnership between the TDI JV and Fiocchi Ammunition.

All this is great but don’t forget they still have Mactung.  A Bank Feasibility Study was just released that gave NTC's Mactung deposit a Net Present Value of $277 Million or $2 per share.  The deposit is huge, with close to a billion pounds of high grade tungsten contained in the resource estimate.  The mineable underground portion contains 195 Million pounds of Tungsten at a grade of 1.09% Wo3.  The insitu value of the underground resource is just under $2 Billion.  There is also three times that amount of tungsten that could be mined later in an open pit at a grade of about .78% Wo3.  The deposit is huge.

 

Tons of upside here.  $20 Million market cap doesn’t even scratch the surface.

 

Just based on a 6X EPS valuation of the $1.8 Million they made last quarter (not including the $3 Million gain on the JV) this should be a fair bit higher.  5.7 cents per share forward looking annual earnings per share x 6X EPS multiple gives 34 cents per share value right now.  Several improvements have been made since the last quarter, plus even more gains in currency devaluation and fuel price reductions will be realized in Q2.  More revenues will be coming from value added JV processing….   I projected a few days ago in a post that I think Q2 earnings could easily be double Q1 so a 65 cents EPS valuation could be a reality in a few months time.  And this doesn’t include any value for Mactung.  ($2/share NPV)

 

You decide.  Tungsten is going to be in flavour very soon.  Its being promoted at PDAC.  Do you invest in a tungsten explorer, or do you invest in a Tungsten producer (Profitable), the ONLY publicly traded producer in North America, and also get to take part in the development gains to be had by the Mactung project.  Not only are they the only publicly traded producer but the have the best undeveloped tungsten deposit on the planet.

 

lurk