Morgans Research

Found this piece from Morgan's CIMB

Carbine Tungsten (CNQ)
redeveloping the Mt Carbine tungsten mine
Mt Carbine tungsten produced tungsten intermittently from the late 1880s. From 1974 the Mt
Carbine tungsten mine operated profitably for over 13 years after the application of photometric
ore sorting was used to upgrade ore fed to the processing plant. The mine closed when the
tungsten price was significantly weakened by Chinese selling in the late 1980s, with the APT
price declining from US$150/mtu to around US$50/mtu. Prior to the onset of the Global
Financial Crisis in late 2008, tungsten was trading at US$250/mtu. In 2011 it rose to a peak of
US$450/mtu, and remains around US$350/mtu.
CNQ commenced re-treating tailings from previous operations to establish and optimise its
process flow sheet and demonstrate the quality of the concentrate. Environmental approval for
the development and approval of the Plan of Operations was received to process 12Mt of
at-surface stockpile material, at a rate up to 3Mtpy. Carbine Tungsten secured a US$15M loan
facility from Mitsubishi RtMJ in September 2014 to fund this development. The real prize is the
redevelopment of the hard rock open pit. Under the terms of the agreement, Mitsubishi has the
right to purchase 50% of the product. Carbine Tungsten is currently evaluating financing options
for this development. Longer term there is substantial exploration and expansion upside.

Previous operations have demonstrated
the metallurgical performance of Mt
Carbine. CNQ is now funded by a
US$15M loan facility from Mitsubishi to
construct a plant to process tungsten
bearing stockpile material. They are
evaluating funding options to re-develop
the hard rock mine and expand the
processing capacity. CNQ is off its lows,
and I’d expect the share price to
strengthen with satisfaction of the CPs for
the Mitsubishi facility.