US Antimony estimates resource for Ontario tungsten project

United States Antimony (NYSE-A: UAMY) has released an initial resource study for its Fostung tungsten project in Ontario, outlining the potential of what could be North America’s next producer of the critical mineral.

The technical report, prepared by SRK Consulting, revealed a total inferred resource of 14.62 million tonnes grading 0.17% WO3, containing 53.6 million lb. of WO3. It replaces a prior estimate of 12.4 million tonnes grading 0.213% under a previous ownership.

Tungsten, due to its unique properties of having an exceptionally high melting point, nearly unmatched hardness and extreme density, is now used in many modern industrial applications, including aerospace, defense, electronics and energy.

Following years of prolonged underinvestment and export restrictions by top producer China, price of the metal has exploded. According to Fastmarkets data, the WO3 compound has surged by nearly three-fold over the past year.

At current levels of $1,890 per tonne, the raw metals at Fostung project would be valued at approximately $4.6 billion, prior to mining and processing costs, US Antimony noted.

Quick development

Located 70 km west of Sudbury, the Fostung property represents a key part of US Antimony’s business model to fast-track critical minerals projects for the North American market. The Texas-based company is currently the only fully integrated producer of antimony outside of China and Russia, operating a large smelting facility in Montana capable of producing 5 million lb. of the metal.

With eyes on adding tungsten production, US Antimony last year acquired the Fostung project from Transition Metals (TSXV: XTM) for $5 million cash and a 0.5% royalty. The aim is to quickly develop the project into an initial open-pit mine using existing infrastructure, then expanding into underground mining.

“We acquired the Fostung tungsten property in June of last year with the view that this deposit had the greatest potential to become the next North American producer of tungsten,” Joseph Bardswich, executive vice president and chief mining engineer, said in a press release. “Our business model is to ‘fast-track’ mining projects in an effort to meet the demands of our US military for certain critical minerals.”

Currently, China controls the vast majority of the worldwide tungsten supply and about 80-85% of global processing capacity. The US and Canada have not produced any tungsten concentrates since 2016.

“We are eager to continue with the recommended next phases of drilling, bulk sampling and metallurgical testing to advance the Fostung deposit from an inferred to a measured and indicated resource,” he added.

The company said it is now in the process of filing a request for US government funding under the Defense Production Act Title III (DPA Title III) in an effort to expedite its mining plan, adding that its Fostung deposit will likely be the first tungsten ore mined in either the US or Canada in over 10 years.

By midday, shares of United States Antimony fell by 9% to $9.66 apiece, in line with the broader market selloff. The company has a market capitalization of $1.35 billion.