Tungsten

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Playfair buys two high-grade tungsten properties

2006-02-02 10:06 ET - News Release

Mr. Neil Briggs reports

PLAYFAIR ACQUIRES TWO HIGH-GRADE TUNGSTEN PROPERTIES

Playfair Mining Ltd. has advanced significantly in its goal to becoming one of the world's principal developers of new high-grade tungsten resources, through signing an agreement to acquire a suite of tungsten properties from Yukon prospector Ron Berdahl. Mr. Berdahl's commitment to tungsten property acquisition dates back more than a decade and its is Playfair's acknowledged good fortune to enter into an agreement to acquire these carefully accumulated properties with historic tungsten resources. Playfair has entered into an agreement to purchase a 100-per-cent interest in the Risby, Lened and Clea tungsten properties. With the completion of this purchase, Playfair will increase the historic resources of tungsten under its control seven times from 500,000 to 3.5 million metric tonne units.

Historic resources at Grey River are 473,000 tonnes of 0.97 per cent WO3 (458,500 metric tonne units). At Risby, the historic resources are 2.7 million tonnes at a grade of 0.81 per cent WO3 (2,187,000 metric tonne units). At Lened, historic resources are reported at 737,000 tonnes at a grade of 1.14 per cent WO3 (840,200 metric tonne units).

The properties are to be purchased from Whitehorse-based prospector Mr. Berdahl who retains a 3-per-cent net smelter return royalty, one-sixth of which may be purchased by Playfair for $500,000. The purchase is subject to completion of satisfactory due diligence by Playfair and to exchange approval. A finder's fee is payable in connection with the transaction.

A metric tonne unit is equal to 10 kilograms per metric tonne and is the standard weight measure of the tungsten trade. Tungsten prices are generally quoted as United States dollars per metric tonne unit of ammonium paratungstate (APT), an intermediate product in the production of tungsten metal for which price quotes are generally available. Tungsten prices have surged in the past two years from $60 (U.S.) to the current level of $260 (U.S.) per metric tonne unit of APT.

The Risby tungsten deposit is a scheelite-bearing skarn occurrence in the Ross River area, Yukon, accessible by a 25-kilometre tractor road from an all-weather highway. In 1982, Hudson Bay Exploration and Development Company Ltd. (HBED), based on 40 diamond-drill holes, calculated an ore reserve of 2.7 million tonnes (2.98 million tons) of 0.81 per cent WO3 using a 0.4-per-cent WO3 cut-off grade and a minimum three-metre thickness. HBED note that, "The drilled intersections have been critically reviewed in terms of geologic continuity, realistic cut-offs and practical mining," and, "The ore reserves were calculated using polygonal ore blocks for each intersection."

The Lened deposits are scheelite-bearing skarn occurrences located between the world-class Cantung and Mactung tungsten deposits along the Yukon/Northwest Territories border. A winter road from the town of Tungsten to the Howard's Pass lead-zinc deposit passes within 13 kilometres of the Lened property which is about 40 kilometres north-northwest of Cantung. Extensive work by Union Carbide Corp. included 168 drill holes totalling 23,019 metres (75,522 feet). In 1982, Union Carbide calculated total mining reserves of 737,000 tonnes (812,400 tons) having an average grade of 1.14 per cent WO3. These reserves occur in three separate but closely related bodies called Western, Stephens and Emma, and were calculated by five separate methods. There are a total of 18 known tungsten showings on the property and two of these appear to have significant potential. For example, an intersection of 1.75 per cent WO3 over 5.4 metres is reported in one of these locations.

Both HBED and Placer Dome have drilled a siliceous skarn containing tungsten on the Clea property in the Selwyn tungsten belt, one of the world's largest tungsten districts. No historical resource calculations are presently available to Playfair for the Clea property.

Playfair president Neil Briggs commented: "Yukon and the adjacent Northwest Territories have an extraordinary tungsten endowment. According to the Yukon Geological Survey, the region contains an estimated 20 per cent of known global tungsten. Playfair is delighted to have obtained such significant properties in a world-class tungsten area."

Playfair now controls three advanced-stage tungsten projects, Risby, Lened and Grey River, with historical resources totalling close to 3.5 million of contained tungsten metric tonne units and considerable potential to add more with further exploration. In addition, Playfair now controls two early stage projects, Granite Lake and Clea, with excellent targets already identified.

Playfair is advancing rapidly toward its goal of becoming become one of the world's principal developers of new high-grade tungsten resources.

Michael Moore, PGeo, is the qualified person who has reviewed the technical information contained in this news release on behalf of the company. Estimates of tungsten resources are historical in nature, predate and are non-compliant with National Instrument 43-101. Playfair is not treating the historical estimates as current mineral resources or reserves. Playfair has not undertaken any independent investigation of the resource estimates nor has it independently analyzed the results of the previous exploration work in order to verify the resources, and therefore the historical estimates should not be relied upon. However, Playfair believes that these historical estimates provide a conceptual indication of the potential of the occurrences and are relevant to continuing exploration.