tungsten producer in feb world class potential, page-15

Sorry to hear CNQ caught you on the wrong foot but then if you had not sold the shares would probably linger at 9c still. :-)

The wait till production start could very well be sweetened with news re off-take agreement(s), drill results or additional Chinese export restrictions.

There is another company out there that currently is ramping up production of a tungsten concentrate from tailings. It's Largo Resources with their Currais Novo project in Bahia state, Brazil. It is very similar to Carbine's phase I project although Largo produces a >65% Scheelite concentrate. Largo has published a preliminary economic assessment that describes the off-take agreement in great detail. You can have a look at the PEA at SEDAR. It has been filed on 28/01/2011. The pricing mechanism works as follows: The off-take price for the >65% concentrate is set at 77% of the European APT price provided it moves within a curtain of between $130 and $240. Below the bottom price and above the ceiling price the difference is split 50/50. So at an APT price of $450 Laro will receive (240+(210/2))*0,77=$266/MTU.

Since the announcement of Largo's off take agreement the supply/demand situation has become even tighter with several countries identifying tungsten as a strategic metal and the Chinese restricting exports further and further. So it appears reasonable to expect that Carbine should be able to sign (an) off-take agreements(s) that is/are at least as favorable as Largo's. Taking into account the expectation of rising prices a new formula should allow Carbine to profit from potential price increases stronger than Largo (at least that's what I am hoping for). At the very least a fixed ceiling price should be TOTALLY UNACCEPTABLE. Assuming an average selling price of $250 per MTU and name plate production of 50t/month we'd see revenues of 60,000MTUs*$250= $15 million per annum. That's much better than what had been estimated in the past.

Carbine should take any and all profits from the tailings project to the bank in order to be able to fully finance its hard rock plant out of its own pockets. This would allow them to avoid shareholder dilution going forward. The rather low number of shares outstanding provides a very attractive leverage and should not be surrendered for no particular reason.