Playfair Mining Ltd.

Playfair Mining Ltd.

January 15, 2007 16:01 ET

Playfair Mining Ltd.: Favourable Metallurgy and Capital Cost Estimates for Grey River Tungsten

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 15, 2007) - Playfair Mining (TSX VENTURE:PLY) is very pleased to announce that it has received a favourable metallurgical assessment of a bulk sample from the company's Grey River, Newfoundland deposit and has also received a positive review of this report from an independent third-party.

Playfair Mining commissioned SGS Lakefield Research Europe to conduct metallurgical testing of a Wolframite-bearing bulk sample from Grey River, Newfoundland. SGS also prepared a preliminary capital cost estimate for the construction of a traditional gravity separation plant for this project. Playfair then commissioned a review of the SGS report from GraviTa Inc., an independent third party who noted, "..the ore is ideally suited to inexpensive and efficient treatment by gravity concentration."

SGS is the metallurgical market leader in metallurgy, particularly in the development of gravity flowsheets, having significant experience in gravity flow sheet development world-wide. With more than 7,000 employees world wide, they have significant metallurgical facilities in Canada, Chile, Australia, Mexico, South Africa and the UK.

Mike Hallewell, BSc, C.Eng, General Manager, Metallurgical Operations, Cornwall, UK was the QP that supervised the testwork which was a follow up to initial metallurgical scoping testwork carried out on a wolframite-bearing sample from Grey River in 2006 that indicated the material was amenable to a simple traditional gravity concentration process.

In part, the SGS Phase Two Scoping Testwork Report states, "The estimated capital cost of a traditional gravity separation plant is US$3.7 million, the major share of this capital being crushing and concentrate dressing sections." While the construction of a gravity separation plant is only one component of the potential capital costs that would be required to bring the Grey River project into production, the importance of this initial cost estimate is explained by Neil Briggs, President of Playfair Mining, "Relative to the historical resource(i) on this property, the opportunity to potentially expand this deposit through additional underground work, and the current supply and demand fundamentals for tungsten itself, this construction cost estimate is very attractive as Playfair works to advance this deposit. It has been the company's goal to put Grey River into production in the most cost efficient manner possible and this initial capital cost estimate for the separation plant assists us dramatically in working towards this objective."

The independent review of the SGS report was carried out by Richard Burt, President of GraviTa, who is recognized as one of the world's leading experts on gravity concentration technology. He has published more than 50 papers on a variety of subjects including the authoritative work on gravity concentration processes, equipment selection and plant design, titled Gravity Concentration Technology which was published by Elsevier in 1984. Mr. Burt has 43 years of experience in minerals processing including 40 years of experience related to gravity concentration. Mr. Burt concludes, "Having reviewed the reports and correspondence between SGS and Playfair Mining, provided by Playfair for review, the writer can confirm that the work to date has been appropriate, and successfully carried out, allowing suitable, phased, decisions to be made regarding the potential for proper treatment of the Grey River tungsten ore. The proposal for further work has been reviewed, and apart from a couple of minor suggestions, is considered to be the most appropriate. It should provide sufficient information for the optimum plant to be engineered."

With Phase One and Phase Two of Metallurgical Testing now complete, Playfair will undertake a third and final stage of testing. As described by Mr. Burt of GraviTa, "The third and final stage of the test programme will develop the optimum flowsheet, and provide enough information for a suitable plant to be engineered, and for the owners to develop their project economics with full confidence especially with regard to the optimum recovery and concentrate grade." Following the recommendations set forth in the Phase Two Scoping Testwork from SGS and the positive review of these recommendations by GraviTa, Playfair intends to collect a five ton representative sample from underground at Grey River in order to carry out pilot scale metallurgical testing to confirm, refine and improve the results to date.

In conjunction with a program of underground exploration, Playfair will use the metallurgical data contained in the SGS reports along with the initial capital cost estimates for the construction of a gravity separation plant to further this advanced stage property towards production. This advancement towards production at Grey River comes at a time when Playfair is simultaneously executing aggressive exploration programs on other tungsten projects.

Current Tungsten Market

Playfair Mining's focus on advancing its Canadian tungsten projects towards production comes at a time of strong tungsten prices (relative to prices experienced prior to 2005). Tungsten is an extremely hard, heavy, steel-grey to white metal that is remarkable for its robust physical properties and vast uses and cannot be substituted in many industrial applications. Tungsten is a strategic metal and emerging economies such as India and China are consuming increasing amounts of tungsten. Until 2005, China was the world's largest exporter of tungsten concentrate but rapid industrialization within China, structural economic changes, and changes in economic policies towards industry have resulted in the restriction of tungsten exports from China. China is now the world's largest consumer of tungsten. Escalating Chinese consumption, in conjunction with the ongoing demand in the world's principal economies along with the supply issues noted above, has resulted in increases in the price of tungsten. Tungsten prices have increased significantly from a level of US$65-95/MTU in 2004 to an average price of approximately US$250 in 2006. Tungsten prices are generally quoted per Metric Ton Unit ("MTU" - one hundredth of a metric ton of 1,000 kilograms) of contained tungsten trioxide (WO3) in Ammonium Paratungstate. One MTU contains 10 kilograms of WO3 and is the standard weight measure of the tungsten trade. Ammonium Paratungstate is an intermediate product in the production of tungsten metal for which prices are available. A price of US$250 per MTU equates to US$25 per kilogram or US$11.26 per pound.

About the Company

Playfair owns 4 tungsten deposits(i), Grey River (Newfoundland), Risby (Yukon), Lened (Northwest Territories) and Clea (Yukon). Playfair's primary focus has been the Grey River deposit where consistently favourable results have advanced the project towards production.

Property Tonnes % WO3 MTU's Company
Grey River 473,000 0.97 458,500 ASARCO 1970
Risby 2,700,000 0.81 2,187,000 HBED 1982
Lened 737,000 1.14 840,200 Union Carbide 1986
Clea 257,000 0.93 239,000 Placer Dome 1980
Total 4,167,000 0.89 3,724,700

(i) Estimates of tungsten resources are historical in nature, predate and are noncompliant with NI 43-101. Playfair is not treating the historical estimates as current mineral resources or reserves. Playfair has not undertaken any independent investigation of the resource estimates nor has it independently analyzed the results of the previous exploration work in order to verify the resources, and therefore the historical estimates should not be relied upon. However, Playfair believes that these historical estimates provide a conceptual indication of the potential of the occurrences and are relevant to ongoing exploration.

Mr. Michael Moore, P. Geo is the qualified person who has reviewed the technical information contained in this release on behalf of Playfair.

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D. Neil Briggs, President and Director

No Stock Exchange has Approved or Disapproved the Information Contained Herein. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Playfair Mining Ltd.
    D. Neil Briggs
    President and Director
    (604) 687-7178 or Toll Free: 1-888-244-6644
    (604) 687-7179 (FAX)