Project UpdatesMactung Deposit
Mine life is 11.2 years for the underground mine with the potential toexpand by 17 years with an open pit, exploiting near surface, lowergrade indicated and inferred mineral resources.
The capital expenditure estimate is comprised of a project capital costof CDN$356.5 million plus a contingency of CDN$45.6 million. InDecember, the Company commenced the process of project review by theYukon Environmental and Socio-economic Assessment Board (YESAB); adecision document by YESAB is expected to take between 12 and 15months.
Based on an 11.2 year mine life and the base case parameters, theproject's pre-tax net present value is calculated as follows:
| Discount Rate |
Pre-Tax Net Present Value |
| 8% |
CDN$276.8 million |
| 6% |
CDN$346.4 million |
The pre-tax internal rate of return for the project is 23.5%.
Paybackof invested capital is anticipated to occur within 2.9 years afterproduction starts.
Cantung Mine Site
Production at the Cantung Mine has temporarily been suspended effective October 18, 2009 due to
increased product inventory and a declining tungsten prices. The mine has been placed on a care and maintenance program that will enable a timely and cost effective return to production when market conditions improve.
Currently, the major features and facilities associated with Cantung are as follows:
* The Cantung deposits, consisting of the Open Pit resource near surface, and the E Zone, underground.
* The physical plant site including an underground mine, a small open pit, process plant, diesel power plant, workshops, warehouses, administration buildings, a town site and single status accommodation, and an airstrip.
* Waste rock storage facilities and a tailings storage facility.