Primary Metals Inc.

Primary Metals Inc.

April 06, 2006 12:03 ET

Primary Metals Acquires Licence for Argimela Tin Deposit

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - April 6, 2006) - Primary Metals Inc. (TSX VENTURE:PMI) (the "Company") is pleased to announce the acquisition of the exploration licence for the Argimela Tin Deposit located 15 kilometres west of Primary Metals' operating Panasqueira tungsten mine in eastern Portugal. The licence, which may be converted into a production concession, has been granted to Beralt Tin & Wolfram ("Beralt"), a wholly owned subsidiary of the Company, for a renewable two-year period. Beralt is committed to make minimum exploration expenditures of EUR 130,000 during the initial two-year period and a further EUR 70,000 per year for each of the next three years. (EUR 1 is approximately CDN$1.42 at current exchange rates.)

"We are delighted with the acquisition of this licence," said Lewis Black, Chairman of Primary Metals Inc. "We consider that tin prices, which have recently increased, will continue to improve and that Argimela is potentially one of the largest tin deposits in the world. Together with our Panasqueira tungsten mine, which is one of the world's largest producers of tungsten concentrate outside of China, the Argimela Tin Deposit provides the potential for both diversification in the Iberian Peninsula and a path to increased profitability for the Company."


Historical estimates date back to 1960, and include the most recent 1979 estimate for an indicated near-surface open pit resource of some 65,000 tonnes of tin with 77.6 million tonnes at a grade of 0.057% Sn (0.57 kilograms of tin per tonne) including 18.38 million tonnes with a grade of 0.084% Sn (0.84 kilograms of tin per tonne), based on old mine workings and drill holes and including information developed by Beralt at that time. (These estimates are historical in nature and pre-date Canadian National Instrument 43-101. They are therefore non-compliant with NI 43-101, are not being treated as current resource estimates and should not be relied upon. However, the Company believes that these historical estimates provide a conceptual indication of the potential of the property and are relevant to ongoing exploration.)

The mineralogy of the deposit shows that tin (Sn) is present not only in cassiterite, a heavy oxide of tin, but also in stannite, a tin sulphide. There is some indication that historical analyses were carried out to determine only the tin contained in the form of cassiterite, since cassiterite was amenable to gravity concentration, and no analysis was typically undertaken for sulphide minerals. Analysis of a selected composite sample taken at Argimela and analysed at the Panasqueira mine laboratory showed 0.157% Sn in the form of cassiterite (oxide) and an additional 0.113% Sn as sulphide, probably stannite. A sample of similar selected material, taken by George Cavey, P. Geo., of OreQuest Consultants Ltd., Vancouver, BC and analysed by International Plasma Labs Ltd. in Vancouver BC, showed a total tin assay of 0.29% Sn and also 0.20% copper. This preliminary work indicates some potential for increase in the total tin content of the historical resource estimates and requires further investigation and confirmation. Amounts of copper and lithium minerals in the deposit will also be investigated.

The Argimela Tin Deposit exists in schists with mineralization in several sub vertical quartz veins, varying in width from 5 to 30 centimetres, with a 1-metre frequency and abundant veinlets and stockwork. Past drill holes show that this frequency of veins continues to depth. The historical estimates noted previously include material from surface to an average depth of 155 metres below surface to the 440-metre level. There are historical indications that mineralization continues to greater depths.


All available historical data, including available core from past drilling activities, will be reviewed and assessed by the Company in preparation for further exploration and confirmation of data. The company plans an initial work program that includes analysis of available core, assessment of the potential for higher grade zones within the deposit, a further 3,200 metres of core drilling and 4,200 metres of percussion drilling, reopening existing galleries, sampling and metallurgical studies.

Tin, like most metals, has increased in value due to a strong market demand. It is currently trading at US$8,350 per tonne on the London Metals Exchange, having risen from around US$6,000 in November of 2005 - a recent increase of some 39 %.

About Primary Metals

Primary Metals Inc. is a TSX Venture listed company which owns 100% interest in the Panasqueira tungsten mine in Portugal, currently producing wolframite concentrates containing some 120,000 MTU's of tungsten trioxide per annum (1 MTU = 1 metric tonne unit or 10 kilograms). The mine has operated almost continuously for 110 years. Significant increases in tungsten prices from US$85 to US$285 per MTU in the past year, along with current improved mining activities, have yielded profitable results and the Company has reported earnings of $0.56 per share for the first nine months of fiscal 2006. Further information may be found on the Company's website at and on SEDAR at

On Behalf of the Board of Directors,

"James Robertson"

James Robertson, P. Eng., Director

James Robertson, P. Eng., is a Qualified Person for Primary Metals Inc. and has reviewed and approved the information contained in this release. The historical resource estimates provided in this release are presented in a report dated July 18, 1979 on the Argimela Tin Prospect by Dan D. Greig for Essex Minerals Co., a subsidiary of United States Steel Corporation utilizing extensive information dating back to the 1960's.

This News Release contains forward-looking statements respecting the company's expectations as to the future price of tin, its planned work program, and potential mineralization, resources and reserves. Such statements are based on certain assumptions, including that recent demand for tin will continue or increase without a corresponding increase in alternate sources of supply, availability of capital, equipment and personnel to carry out the planned work program and accuracy within a reasonable range of reported historical exploration results, and involve various risks and uncertainties, including global economic factors, future commodity prices, lack of availability of equipment or personnel, and results of exploration. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Other important factors that could cause actual results to differ materially from the Company's expectations are disclosed under the heading "Risk Factors" and elsewhere in the Company's documents filed from time-to-time with regulatory authorities and on

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

Contact Information