North American Tungsten Corporation Ltd.
TSX VENTURE : NTC

North American Tungsten Corporation Ltd.

May 30, 2011 23:45 ET

North American Tungsten Establishes Special Committee for Mactung, Releases Second Quarter Financial Results and Provides an Update on Cantung Operations

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 30, 2011) - Mr. Stephen Leahy, Chairman and CEO of North American Tungsten Corporation Ltd. (TSX VENTURE:NTC) (the "Company" or "NTC"), announces the formation of a Special Committee for its MacTung Deposit, together with March 31st, 2011, 2nd quarter financial results and an update on operations at the CanTung Mine.

SECOND QUARTER HIGHLIGHTS:

Special Committee

The Company's Board of Directors has formed a Special Committee to evaluate opportunities for its MacTung deposit.

Tungsten prices reach another milestone

The MB European quotation for Ammonium Paratungstate ("APT") (has risen to US$463/metric tonne unit ("mtu") based on a range of (US$460-465). That average has risen 148% from a monthly low of US$187/mtu in July 2009.

CanTung production improving

The Company has received new production mining equipment during March and April 2011. Production in the third quarter to May 22 was 45,000 mtus, evidencing that output is improving significantly.

Financing

On March 31, 2011 the Company closed a public offering for proceeds of CDN$11,500,000 consisting of 23,000,000 units at a price of $0.50 per unit.

Updated 43-101 Compliant Technical Report

On February 9, 2011 the Company released an updated 43-101 compliant technical report on the Cantung Mine. The Company has increased its probable minerals reserves to an estimated 1,693,000 tons grading 1.17% WO3 as of October, 2010; in addition, indicated mineral resources are estimated at 2.45 million tons grading 1.11% WO3 and inferred mineral resources are estimated at 0.43 million tons grading 0.84% WO3.

SPECIAL COMMITTEE

In order to most effectively and responsively move forward to create greater shareholder value the Company's Board of Directors has established a special committee to explore all strategic alternatives relating to its 100% owned MacTung deposit. The timing of the Company's decision takes into account the status of the permitting and licensing, highly favorable tungsten price levels, significant global M&A activities, a growing worldwide demand for tungsten and related significant potential shortfalls in worldwide tungsten supply.

Stephen Leahy, Chairman and CEO, stated that the Company's MacTung tungsten resource is one of the largest high grade undeveloped tungsten-skarn deposits in the World. Ron Erickson, Director and Chairman of the Special Committee of the Board, indicated that an expedited path to exploit the potential of MacTung is the key objective of the Company.

The National Instrument 43-101 Compliant Technical Report on the MacTung Property – Yukon Canada ("Feasibility Study") dated April 3, 2009 prepared by Wardrop, A Tetra Tech Company showed a $276 million NPV and a $402 million CAPEX, all based on an Ammonium Paratungstate ("APT") price of US$300 per mtu.

FINANCIAL RESULTS

The Company reports a net loss of $7.7 million for the three month period ended March 31, 2011 ("Q2") and a $7.1 million drain on cash from operating activities before changes in non-cash working capital.

During Q2 concentrate sales totalled $11.4 million, compared with $3.7 million for the three months ended March 31, 2010 ("Q2 2010"). Mine operating costs were $16.7 million including depreciation of $0.60 million which resulted in a negative gross margin of $6.4 million for Q2.

In Q2, production was below plan due to development delays and poor underground and mill equipment availability. Concentrate production in this post re-start quarter was significantly below plan. Cash flows from operations after changes in non-cash working capital and increase in reclamation deposits were negative $3.0 million in Q2. Shortfalls in tons mined, grade and mill recovery negatively impacted cash flows. Production was 43,728 mtus of tungsten trioxide contained ("WO3") in concentrates. Tons milled during Q2 were 76,980 tons at a grade of 0.85% WO3 and mill recovery was 73.35%.

Capital expenditures at CanTung for mining equipment, power generation and underground haulage ways were $6.5 million in Q2 compared to $0.15 million in Q2 2010. Expenditures on Mactung were $0.24 million in Q2 compared to $0.30 million in Q2 2010. Cash flows from issuance of capital stock in Q2 were $11.5 million and share issuance costs were $0.78 million. Cash flows from capital lease obligations and equipment and CAT loans increased by $4.7 million in Q2.

The second quarter financial statements and MD&A were filed on SEDAR for public access and may also be accessed from the Company's website www.natungsten.com.

CANTUNG OPERATIONS UPDATE

During the quarter ended March 31, 2011, the Company continued its re-start of production at its 100% owned CanTung Mine. Production was affected by numerous start-up operational issues including delays in the installation of more efficient power generators, limited mill equipment availability and slower than expected delivery of its new underground mine equipment. Accordingly, the Company was unable to run its mill at its forecasted efficiency resulting in production substantially below levels planned for the quarter.

With the completion of the delivery and installation of a significant amount of new equipment and systems late in the second quarter, production started to improve dramatically evidenced by production of some 45,000 mtu's from April 1 to May 22nd. The Company believes that it has resolved substantially all of the issues at this time and believes that a go forward production rate of approximately 25,000 mtu's/month is achievable with a consistent rate of underground development. The Company continues to seek ways to increase production beyond this level, primarily through additional underground development and enhanced recovery in the mill.

Operating costs at the mine were also negatively impacted by the operational issues during the quarter. The Company will continue to seek cost reductions in all areas of operations including reduced fuel consumption due to the newer, more fuel efficient power systems.

The Company will also be conducting ongoing underground exploration focusing on the West Extension below the 3600' level. Additional surface targets will be further reviewed and evaluated.

With record high tungsten prices currently at US$460 - US$465 per mtu and all of the Company's production contracted through market based off-take agreements, the Company very much looks forward to the future.

INVESTOR RELATIONS

The Company has retained the services of Mr. Jason Roy as Investor Relations consultant. Mr. Roy has over 6 years of experience in the Investor Relations field. He has worked with numerous publicly traded companies in diversified sectors.

ABOUT NORTH AMERICAN TUNGSTEN CORPORATION LTD

The Company is a publicly listed Tier 1 Junior Resource Company engaged primarily in the operation, development, and acquisition of tungsten and other related mineral properties in Canada. The Company's 100% owned Cantung mine and Mactung development project make it one of the few tungsten producers with both a producing mine and strategic development asset in the western world. Mactung is one of the world's largest known undeveloped high grade tungsten-skarn deposits.

ON BEHALF OF THE BOARD OF DIRECTORS

Stephen M. Leahy, Chairman & CEO

Cautionary Note

Safe Harbour Statement under the United States Private Securities Litigation Reform Act of 1995 and similar Canadian legislation: Except for the statements of historical fact contained herein, the information presented contains "Forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and similar Canadian legislation. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes", or variation of such words and phrases that refer to certain actions, events or results to be taken, and other factors which may cause the actual results, performance or achievements of North American Tungsten Corporation Ltd. To be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the actual results of reclamation activities, the estimation or realization of mineral reserves and resources, the timing and amount of estimated future production, costs of production, capital expenditures, future prices of commodities, possible variations in ore grade or recovery rates, efficacy and efficiency of milling process, failure of plant, equipments or processes to operate as anticipated, accidents, labour disputes and other risks in the mining industry. Although North American Tungsten Corporation Ltd. has attempted to identify important factors that could cause actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained herein and in North American Tungsten Corporation Ltd.'s other filing incorporated by reference.

Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Resources: This press release may use the terms "Measured," "indicated" and "inferred" Resources. United States investors are advised that while such terms are recognized and required by Canadian regulators, the United States Securities and Exchange Commission does not recognize them. "Inferred Mineral Resources" have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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