Watershed

The last quarter of 2013 was important to Vital Metals, a Western Australian based mining company, because of it being granted mining leases by the Queensland government to mine for tungsten on its Watershed project, in far north Queensland, 35 kilometres north west of the Mount Carbine tungsten deposit and 160 kilometres north west of Cairns.

All Required Approvals Have Been Granted for the Watershed Project to Proceed

The Watershed project that is located in undulating open forest country at the headwaters of the Mitchell and Palmer Rivers, now has all the necessary authorisation to begin construction of a tungsten mine at the site.

Off-Take Partner Sought for Watershed Operation

Vital Metals has commenced a major pilot scale metallurgical program, as part of the Watershed project, that will provide it with defining parametres for the correct processing of Watershed ore. Vital Metals is also distributing marketing samples of the ore in order to attract off-take partners for the operation once the mine begins production. The getting the Watershed project through the approvals process has been a major achievement for Vital Metals, a feat that has considerably enhanced the project's profile within the world tungsten industry.

During the last quarter of 2013 Vital Metals also arranged visits to the Watershed project site by a number of Japanese groups who showed interest in becoming involved with the project's further development. The site visits were arranged with the assistance of Vital Metals joint venture partner, JOGMEC, (Japan Oil, Gas and Metals National Corporation. The site visits included groups active in the tungsten and mining industries who were interested in reviewung the watershed project and aquiring an interest in its operation. JOGMEC has a 30 percent interest in the Watershed project and has a right to transfer its stake in the project to a Japanese company offering an off-take interest and willing to take responsibility for arranging their particular share in ongoing finance of the project.

Watershed is one of the Top Ten Unexplored Tungsten Deposits in the World

The Watershed project deposit contains 49.2 million tonnes of tungsten bearing ore which ranks it among the top ten unexploited tungsten deposits in the world outside of China. The Watershed deposit was discovered by Utah Development Company Limited in the early 1980's. Vital Metals acquired the project in 2005 and have been undertaking exploratory drilling at the site ever since. Mineralised ore has been defined over a strike length of 1,500 metres to a depth of 450 metres. It is open at depth and along strike. In addition to the Watershed deposit, explorative drilling has also identified other strikes at Desaily North, Desailly and Watershed South.

Watershed Project at an Advanced Stage

The Watershed tungsten project is now at an advanced stage with only the Definitive Feasibility Study, currently being undertaken, to be completed in the first quarter of 2014. This study is investigating the mine planning issues of pit design, wall stability and scheduling, the design of the tailings dam and waste dump, the metallurgical flowsheet and plant design and a bulk sampling campaign from two underground adits that were made into the resource in 2008. The Indigenous Land Use Agreement has been signed with the Western Yalanji people and registered with the National Native Title Tribunal and the mining leases have been granted.