First new U.S. tungsten project in years falls victim to financing woes

After the last domestic tungsten mine ceased production years ago, U.S. tungsten mines and mills have been idle. The glimmer of hope for a new tungsten mine in Nevada has been extinguished for now.

What might have become the first new tungsten operation in the United States in several years has been put on hold due to events in the global financial markets, exacerbated by the end of a proposed business merger between Golden Predator Mines and Midway Gold.

Vancouver-based junior Golden Predator (TSX: GP)) was hoping to start up its Springer tungsten facility in Pershing County, Nevada. It would have been the first U.S. tungsten producer since the world-class Pine Creek Mine and mill near Bishop, California, closed in 2000.

The former Union Carbide mine Pine Creek is now listed for sale on a Bishop real estate web site for $19.7 million.

The only current significant producer of tungsten ore in North America is Canada’s North American Tungsten.

The U.S. Geological Survey reported in 2008 that U.S. manufacturers consumed $520 million worth of tungsten last year. World tungsten supply had been dominated by Chinese production and exports for a number of years. However, the Chinese government has restricted the amount of tungsten that can be exported, banned foreign investment in Chinese tungsten mines and limited tungsten production.

Various companies now working toward developing tungsten deposits or reopening inactive tungsten mines can be found in Australia, Canada, China, Kyrgyzstan, Mexico, Spain, Thailand, the U.S., Uzbekistan, and Vietnam, according to the USGS.

A gold explorationist with Nevada gold properties, Golden Predator also acquired the Springer Mining Co. in December 2006, paying General Electric $4.5 million and assuming $1 million in reclamation obligations. General Electric had originally invested $71 million in the construction and commissioning of the tungsten mine and mill complex in Pershing County.

Golden Predator estimates that Springer hosts a historical resource estimate of 3.35 million tons granding 0.458% W03 and a modern 1,200 tpd mill.

By July 17, 2008, Golden Predator Mines and Midway Gold announced that they intended to enter into a business combination for a new company to be called Golden Predator Mines. The combination would have helped refurbish the Springer operation. The two companies would have a combined balance sheet of more than $23 million in addition to gold exploration projects, a gold royalty portfolio, and tungsten projects.

However, Midway issued a brief statement Tuesday saying that it had allowed the term sheet to lapse on Monday.

On Wednesday Golden Predator announced it will undertake a series of cost-cutting measures at Springer that will delay eventual startup of the Springer Mill. “All permitting activities and many operational readiness programs will continue, which should better prepare the company for the return of ordinary financial markets and the continuation of pre-startup activities.”

“Golden Predator recognizes the hard work, integrity and professional standards of the Springer work force over the past 21 months and wants to thank those that contributed to advancing Springer this far,” the company said in a news release.






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