News release we have been waiting for: Deal Signed!!!!
Dan
North American Tungsten signs sales and loan agreement
North American Tungsten Corporation Ltd NTC
Shares issued 28,322,365 May 18 close $0.64
Tue 22 May 2001 News Release
Mr. Udo von Doehren reports
North American Tungsten has signed a definitive concentrate sales agreement with Sandvik AB and Osram Sylvania Products Inc., pursuant to which Sandvik and Osram Sylvania have agreed to purchase at of the company's tungsten concentrate production from its CanTung mine, estimated to be some 900,000 metric tonne units (1 mtu equals 10 kilograms) over a three-year period.
Furthermore, Sandvik and Osram will purchase any additional concentrates that may, be produced from the operation. Tungsten ore is currently quoted at approximately $74 (U.S.) per mtu.
Sandvik of Stockholm, Sweden, and Osram Sylvania of Pennsylvania, U.S., are leading producers of tungsten products, including cemented carbides, and are two of the world's largest consumers of tungsten ore.
The purchase agreement guarantees a minimum floor price, a small scaled discount from quoted tungsten commodity prices and a defined exclusive option to negotiate participation rights for the future development of the company's additional assets, specifically the MacTung deposit located some 100 miles north of the CanTung mine. The loan agreement provides for a cash advance of $3-million (U.S.) ($4.5-million (Canadian)) toward start-up costs for the CanTung mine with repayment scheduled over a 36-month period.
These arrangements are of major significance for the mutual benefit of all parties and solidify a long-term relationship with two of the world's leading producers of tungsten products. Further, it demonstrates confidence shown in the company's world-class tungsten reserves and provides to the company's allies an alternate Western world source of supply. The CanTung mine, upon commencement of production, will again be the largest producer
of tungsten in the Western world and the only operating tungsten mine in North America. With the signing of these agreements, the company will move toward the
closing of the previously reported financing of $6-million (Canadian) without further delay. Upon closing of the equity financing tranche, the company will move to restart the CanTung mine with production scheduled to commence before the end of the year The company has identified its senior management operating team which it will hire once a production decision has been made.
The company is in possession of valid authorizations to commence operations and is in the process of completing certain reports to be submitted to the regulatory authorities prior to startup.
North American Tungsten Corporation owns 100 per cent of the CanTung mine
and the MacTung deposit. These assets represent the Western world's largest high-grade proven tungsten resource and comprise some 15 per cent of the world's proven resource base.
Sandvik and Osram Sylvania will also commence a review of the MacTung deposit data, to be followed if warranted, by a prefeasibility study at the cost of Sandvik and Osram Sylvania. Sandvik and Osram Sylvania have the exclusive option to negotiate a mutually acceptable agreement to participate in the future development of the deposit. The MacTung deposit
contains treasured, indicated and inferred resources of approximately 30 million tonnes grading 0.94 per cent tungsten, and is considered to represent a very substantial quantity of contained tungsten relative to the world's tungsten resources. This represents over 12 million mtu. The Yukon government is opening up the access road to the mine, and the company expects to complete a road maintenance agreement with the Yukon
government. North American Tungsten acknowledges and thanks the Yukon government and its officials for their co-operation and efforts by providing a positive timely response and commitment to assist the company with its start-up plans. |
