Tungsten

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Primary Metals Reports Another Profitable Quarter with Earnings of CDN$0.10 per Share
Tuesday August 29, 3:10 pm ET

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 29, 2006) - Primary Metals Inc. ("Primary" or the "Company") (TSX VENTURE:PMI - News) has announced consolidated financial results, reported in Euros, for the first quarter ended June 30, 2006. The Company reported net earnings after non-cash income taxes for the quarter of EUR 898,000 (CDN$1.27 million) or EUR 0.07 (CDN$0.10) per share as a result of the continued strength in operations at the Company's Panasqueira tungsten mine in Portugal. Earnings before non-cash income taxes were EUR 1.19 million (CDN$1.67 million) or EUR 0.10 (CDN$0.14) per share.

Highlights for the first quarter of fiscal 2007 include:

- Net earnings per share, before non-cash income taxes, of EUR 0.10 or CDN$0.14 (EUR 0.08 or CDN$0.12 diluted)

- Net earnings per share, after non-cash income taxes, of EUR 0.07 or CDN$0.10 (EUR 0.06 or CDN$0.09 diluted)

- Net earnings, after non-cash income taxes, of EUR 897,587 or CDN$1,265,777 (EUR 1,186,267 or CDN$1,672,874 before non-cash income taxes)

- Tungsten sales of EUR 4,761,827 or CDN$6,715,128

- Completion of a positive NI 43-101 independent technical report on ore reserves and tungsten resources at Panasqueira (see News Release dated June 23, 2006)

- Continuation of planned surface and underground improvements

- Continuing strength in tungsten price

"We continue to commit the Company to the long-term operation of our profitable Panasqueira tungsten mine following the delivery of a very favourable independent technical report and assessment of ore reserves," said Lewis Black, Chairman of the Company. "Earnings continue to be affected by the weakness in the US dollar. The expenditures on new equipment and refurbishment that have been made and those planned for the near future, together with the mine development work underway, are expected to result in improvements in operations and continuation of tungsten production from the mine for the long term."

The focus on mine development is starting to show some positive impact on mill feed grade at the mine. The average grade of mill feed for the first quarter was 0.21% WO3, a slight improvement over the average of 0.20% WO3 for the previous quarter. Additional low profile mine equipment has been ordered for delivery late this year and is expected to result in further improvements in mine efficiencies.

An extensive refurbishment program has been underway at the mine in preparation for recommencement of operations following the annual three-week August holiday. Work has included replacement of mine hoist cables, extensive repair and maintenance work, and installation and tune-up of new equipment.

The Panasqueira mine has a long history of production of high quality wolframite concentrates and is the dominant producer of high-grade tungsten concentrates outside China. Results from the first quarter together with the Management Discussion and Analysis of Results and other information are available at www.sedar.com and at the Company's website at www.primarymetals.ca.

On Behalf of the Board of Directors,

James Robertson, P. Eng., Director

James Robertson, P. Eng., is a Qualified Person for Primary and has reviewed and approved the information contained in this News Release.

This News Release contains forward-looking statements respecting the company's expectations as to the results of planned work programs, potential mineralization, resources, reserves, mine production levels and future tungsten prices. Such statements are based on certain assumptions, including continued demand for tungsten, availability of capital, equipment and personnel to carry out and complete the planned work programs and accuracy within a reasonable range of reported exploration and development 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 and development. 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 www.sedar.com.

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