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Carbine Tungsten attracts offtake interest


Carbine Tungsten (ASX: CNQ) is moving closer to securing an offtake partner for the Hard Rock Project, with a Letter of Intent now inplace from an International Trading House to secure half of the projected plant production output.

Importantly for Carbine Tungsten - the off-taker has indicated in the letter that a significant proportion of the Hard Rock Project’s funding requirements may be met by a loan or equity facility arranged by them.

The Hard Rock Project is scheduled to commence production at an average of 265,000 metric tonne units of Tungsten concentrate commencing in the March quarter of 2014.

The project is currently in the initial environmental permitting and engineering phase and is in many aspects a “brown fields” project development. Early construction activities have commenced particularly in clearing and preparing existing infrastructure components for re-use.

The Indicated Resources on which the project is based stands at 18.1 Mt at an estimated global average grade of 0.14% WO3, with a further Inferred Resource of 29.3 Mt at 0.12%WO3.

A recent “Hard Rock” Feasibility Study delivered project economics including:

- Project Life: 15 Years
- Capital expenditure, including working capital, estimated at $53.8 million
- Pre-Tax internal rate of return (IRR) = 60% Net Present Value (NPV) = A$161 million at a discount rate of 8%
- Payback Period = 1.5 years

The Letter of Intent follows on from the A$2 million dollar strategic placement investment made by the multinational construction and mining group Mota-Engil earlier this year, which
also represents a key strategic investment by an experienced construction and mining company with specialist tungsten knowledge and interest.

Carbine Tungsten had $1.6 million in cash at the end of October 2012.


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