Friday, August 14, 2009

High tungsten reading causes Hazelwood Resources to soar

MINING junior Hazelwood Resources says exploration drilling has indicated a high quality tungsten resource at one of its projects. Tungsten is the hardest element on the periodic table apart from carbon and also has a high melting point, so it's used in cutting and drilling tools and for high-temperature applications like light bulbs, heating elements and rocket engines.

Shares in Perth-based Hazelwood rocketed as much as 91 per cent and by late afternoon were up 61 per cent, or 7 cents, at 18.5c, after it said exploration drilling at its Cookes Creek project in Western Australia indicated a "massive" tungsten mineralisation.

One drill hole found a 13 metre interval with a 2.42 per cent grade of tungsten oxide and, in the same hole, there was a 26.48 per cent grade over a one metre interval.

"That is one of the highest readings that anyone has ever recorded for a tungsten exploration program," Hazelwood executive chairman Mark McAuliffe said, adding that a grade of 2-3 per cent was traditionally considered to represent a high quality resource.

More than 52 drillholes have intersected zones with tungsten oxide grades over 1 per cent at the Big Hill resource at Cookes Creek, indicating evidence of "high grade shoots", Hazelwood said.

Another six exploration wells are to be drilled and the company expects to release a revised mineral resource estimate by the end of August.

Hazelwood was originally intending to bulk mine the area, but Mr McAuliffe said the better-than-expected assay results mean it might conduct high grade mining in selected areas instead.

Hazelwood expects to commence feasibility studies for a tungsten project at Cookes Creek in September and Mr McAuliffe hopes the company will be producing its first tungsten by early 2010.

It's targeting annual output of 220,000 tonnes, or about 2-3 per cent of the world's tungsten output. Mr McAuliffe estimated that would convert to annual revenue of about $US40 million ($47m)

Hazelwood was continuing discussions with potential customers in China, Europe and North America, Mr McAuliffe said.

China currently produces and consumes about 70 per cent of the world's

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