North American Tungsten Corporation Ltd NATUF

mort

[RGS1]

As you know the company forward sold 3 yrs of production. It has been operating for less than 9 months. It is hard to guess what the strategic partners will do at the end of this period. My guess is that they will stay as Cantung has plenty more ore and the grade is very high compared to global standards. I have been talking with Udo and understand that the crew is in a very rich zone now that looks like it extends dramaticly. Drilling will of course prove that up. It would be interesting to see what would happen to the spot market if Osram and Sandvik had to buy there instead of from NTC. As you know, you can only forward sell what is proven, not probable. Again having spoken with Udo and asking anyone else that I can regarding tungsten prices, the second quarter of next year seems to be on everyones mind. Some long term contracts are up soon and there is lots of pressure being brought on the Chinese to allow prices to go higher. There is no doubt that the mine is running tight and that the company is VERY lean at the floor minimum. As you have seen there have been cost reductions and I would expect more. I do not think anyone, including Oshram and Sandvik expected prices to drop like they have. Keep in mind they are the two largest useres in the western world and they hooked up with NTC. I still believe and think that this is a great risk reward ratio as the company is getting leaner, the assets are real and the cash flow is in place. These are things that rarely exist on this exchange. The stock price is reflecting the disappointment of all of us, but is likely under some tax loss selling pressure at the moment as well. If you believe in the price of tungsten going higher then NTC has done a great job of positioning itself to benefit from a move. I wish I could see into the future, maybe our friend Childboy can, but I and everyone who worked to put this project in place is disappointed that the price of tungsten has fallen and that the stock is out of favor, but I beleive that mgmt is doing all the right things to lower costs and increase efficincy. Still long.