Tungsten

[Tackler]

Primary Metals buys new low-profile mine equipment

2005-08-19 14:35 ET - News Release

Mr. James Robertson reports

PRIMARY METALS INC.: NEW low-profile MINE EQUIPMENT ARRIVING AT PANASQUEIRA

Primary Metals Inc., further to its news dated June 15, 2005, in Stockwatch, has completed the planned acquisition of new mine equipment. Three new low-profile load/haul/dump (LHD) underground mining units are arriving at the company's operating Panasqueira tungsten mine in Portugal together with two low-profile jumbo boom underground drilling rigs. A third low-profile jumbo drill rig is scheduled to arrive by the end of October, at which time all planned mine equipment acquisitions will be on-site and the entire mine will be operated using new, low-profile equipment.

The advantages of using the low-profile equipment include mining less waste rock and, together with improvements in operating schedules and efficiencies, result in the delivery of an increased tonnage of higher-grade tungsten material to the processing plant. Delivery of these new mining units has been earlier than expected and will enable the company to take greater advantage of the current, high tungsten prices when operations resume by the end of this month, following the scheduled annual August vacation period.

In addition, underground development drilling will be under way at that time, followed by new underground dumper units for additional underground mine development. The acquisitions are being financed by a combination of lease-to-own arrangements and cash from current operations.

The mine hoist from level 3, where much of the current mining activity is focused, to level 2, where the mined ore is crushed and conveyed to surface, is also being rebuilt and recabled in preparation for extended hours of operation at the end of this month. Approximately one-third of the underground conveyor belt is also being replaced with new material.

The processing plant is also being refurbished and mill availability has been increased from two to three shifts per day, five days per week. New processing equipment has been ordered for delivery later this fall; an increase in tungsten recovery is expected as a result at that time.

The capital expenditures for this current initial phase of mine improvement and new development total $1.5-million (U.S.) to date. Further expenditures are planned to improve efficiencies and production levels and to undertake further mine development including completion of access to level 4, which is 90 metres below the current level 3 mining level, and will provide tungsten ore in future years.

The Panasqueira mine has a long history of production of high-quality wolframite concentrates and is a dominant producer of tungsten concentrates outside China. Recent news releases and further information concerning primary is available on the company's website and under Primary's profile at SEDAR.