Wind power generation project at Panasqueira

Primary Metals has engaged Enernova – Novas Energias, a subsidiary of Electricidad de Portugal (EDP), the sole transmitter and largest producer and distributor of electricity in Portugal, to commence construction of eolic wind energy generators on Primary Metal’s Panasqueira tungsten mine in central Portugal. Construction is planned to start in the first quarter of 2008 and will include six or seven 2 MW generators, which will be located on hilltop land to the north of the property. The electrical power generated will be directed to the national grid.

Under the terms of the agreement, originally signed in July 2001, Enernova will pay the company’s wholly owned subsidiary, Beralt Tin and Wolfram, €65,000 (C$100,000) upon the start of construction. A further €500,000 (C$750,000) will be payable upon start-up of the generators, scheduled for the first quarter of 2009.

Beralt has been receiving €4,000/y (C$6,000) to reserve the area for Enernova’s use since 2001. After start-up and during the 25-year term of the contract, Beralt will be paid €27,500 (C$41,000) annually plus a further €2,000 (C$3,000) per MW of installed capacity.

Primary Metals, through Beralt, owns a 100% interest in the Panasqueira tungsten mine in Portugal and is currently producing some 100,000 MTU/y of tungsten trioxide in concentrates. Tungsten is currently trading at around $260/MTU. The Panasqueira mine has a long history of production of high-quality wolframite concentrates and is the dominant producer of high-grade tungsten concentrates outside China.