TUNGSTEN MINING NL — Interim / Quarterly Report 2013

Jul 30, 2013

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QUARTERLY REPORT FOR JUNE 2013

HIGHLIGHTS

Kilba Project, Gascoyne region, Western Australia

• Maiden drilling program completed, with total of 7,116m (24 diamond drill holes for 2,747m, and 42 Reverse Circulation holes for 4,369m):

• Maiden JORC 2012-compliant Resource announced.

• 5.0mt @ 0.27% WO3 at 0.1% lower cut-off limit (30% is in Indicated category and 70% in Inferred).

• Preliminary pit optimization and Strategic Planning Envelope:

• 5.2mt @ 0.25% WO3 open-pittable, at 5.5:1 strip ratio.

• Conventional drill and blast/ truck and shovel operation.

• Completion of diagnostic metallurgical tests and process study:

• Results confirm the tungsten is present as coarse-grained (1-2mm) scheelite.

• Plus 80% tungsten recovery achievable using a simple gravity concentration process route.

• Completion of Scoping Study and announcement of results:

• Open-pit mining project to produce 1.1 million metric tonne units (mtu) of tungsten (WO3-basis) over 7 years.

• Off-take discussions underway

• On target for first production 4Q 2014

• Capital cost A$56 million (includes contingency, 15%)

• Average LOM operating cost US$212/mtu

Tungsten Mining NL| ASX: TGN Quarterly Activities Report June 2013

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Koolyanobbing Project, Eastern Goldfields, WA

• A 2[nd] field reconnaissance and soil sampling program carried out:

• Indications are that individual high-grade zones of scheelite mineralization might bulk together into reasonable grades and thicknesses at certain locations.

Tungsten Mining NL (ASX:TGN) (“Tungsten Mining” or “the Company”) is pleased to release its quarterly activity report for the quarter ended June 30, 2013.

Kilba Project

The Company’s main focus for the quarter was to continue advancing the Kilba tungsten project in the Gascoyne region of Western Australia, and, to this end several significant milestones on the path towards development were achieved, namely a Maiden JORC Resource estimate and a positive Scoping Study result.

Kilba is located within the Gascoyne Region of Western Australia, 320 km northeast of the regional centre of Carnarvon, and 250km southwest of the town of Karratha. The principal access to the project area is provided by Northwest Coastal Highway, a sealed dual-lane carriageway with direct links to ports at Dampier, Geraldton and Fremantle. Access into Kilba is gained via the Uaroo-Glen Florrie Road, which leaves the Northwest Coastal Highway approximately 20km south of Nanutarra Roadhouse.

Maiden JORC Resource

Tungsten Mining completed the exploration program at Zone 11 located on Mining Lease 08/314 that commenced in November, 2012. The program involved 24 diamond drill cored holes totaling 2,747m and 42 Reverse Circulation holes totaling 4,369m and is reported in more detail in TGN announcement “Maiden JORC Resource” dated May 28, 2013, that, complimented by earlier exploration carried out by Union Carbide up to the 1980s, delineated a JORC-2012-compliant Resource of high-grade tungsten mineralization.

The current resource statement for zones 8 and 11 at Kilba, as reported in the above-referenced May 29, 2013, announcement, is reproduced hereunder:

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Table 1: Kilba Mineral resource estimate based on a 0.10% WO3 cut-off grade.

Zone
		Tonnes '000 t	WO3 %	WO3 t
	Category
8	Inferred	230	0.56	1,300
	Total	230	0.56	1,300
11	Indicated	1,300	0.30	4,000
	Inferred	3,500	0.24	8,500
	Total	4,800	0.26	13,000
Total	Indicated	1,300	0.30	4,000
	Inferred	3,700	0.26	9,800
	Total	5,000	0.27	14,000

At Zone 11, tungsten mineralization dips from surface at 25 to 65 degrees toward the south to southwest and is associated with skarns and calc-silicate units. Typically, high-grade mineralization is associated with retrograde skarn units which are often surrounded by low to medium grade disseminated scheelite mineralization in calc-silicate and sedimentary units.

Toward the east of the prospect, tungsten mineralization tends to occur in a single high-grade zone. In the central and western domains mineralization is associated with multiple shallow dipping low to medium-grade units, and in Zone 8, skarn mineralization dips steeply towards the north -northwest. Surface mapping has identified numerous skarn units at Zone 8 that have not been adequately drill- tested and future exploration will focus on evaluating these targets, as indicated in the following figure 1:

Figure 1: Kilba Project, showing projected zones of mineralization

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The drilling carried out to date by Tungsten Mining has demonstrated remarkably good continuity of the skarn mineralization, and the Company is confident that further in-fill drilling on 40m x 40m spacing will prove-up the resource to higher category levels consistent with more detailed levels of study. A 6,000m program of mainly Reverse Circulation (RC) holes is planned to be carried out during 2013.

Scoping Study

The Scoping Study (“Study”) is based on the Maiden JORC-2012 compliant Resource estimate as per Table 1 above that the Company released on May 29, 2013. The Company confirms it is not aware of any new information or data that materially affects the information and that all material assumptions and technical parameters underpinning the Mineral Resource estimate in the relevant market announcement continue to apply and have not materially changed.

The prime Study objective was to posit a likely project scenario and establish whether it would be in the interests of the Company to pursue such a project. The Company is pleased to report that the Study met this objective.

In compiling the Study, Tungsten Mining prepared:

• Preliminary pit optimization and Strategic Planning Envelope;

• Broad-level mining and production schedules;

• Metallurgical process flowsheet;

• Major process equipment selection;

• Assessment of infrastructural requirements, including access, power, water, communications, offices, workshops, shift rosters, transportation, product consignment and accommodation;

• Capital expenditure estimates;

• Operating cost estimates; and

• Operating Plan.

A summary of the salient points from the Scoping Study for the K i l b a Project is set out in table 2 below:

Table 2: Scoping Study Summary

Item	Outcome
MiningProgram	Open cut;truck-and-shovel
Capital expenditure	A$56 million
Ore Feed rate to Process Plant	750,000 tpa
AverageWeightedOperatingCosts(LOM)	US$212/mtu
Initial Production(average,first 2years)	291,000 mtupa of contained WO3
Average Production afteryear 2	99,600 mtupa of contained WO3
Mine Life	7years
First production	4Q 2014

Mining

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The proposed mining method is conventional drill-and-blast, truck-and-shovel, load/haul/dump, open pit mining. The mining engineering unit of the consultancy, CSA Global, determined the Strategic Planning envelope and carried out the mine modeling and pit optimization work used for the Scoping Study.

Dilution and ore recovery factors were applied to the mineral inventory, resulting in a mineral resource used for mine planning, design and cash-flow analysis of 5.2M tonnes at an average grade of 0.25% WO3. This mineral resource within the pit shell includes dilution of 5% and 95% mining recovery. The bottom cut-off grade of 0.10% WO3 for the Kilba deposit was calculated from key economic parameters.

Various mining production scenarios were examined. The scenario that was adopted as the base case of the Study was to extract ore at the rate necessary to completely utilize a 750,000tpa capacity, but initially to treat only the higher grade portion of mined ore above a 0.3% cut- off limit. Pre-strip is not required, as the mineralized zones outcrop at surface.

The mining schedule is structured such that effectively seven (7) years of open cut ore production is mined in a little over three years. The total production has been sourced from pits based on the optimization studies.

The plant will process higher grade ore in the first three years and in later years process the lower grade stockpiled ore. This brings forward a large quantity of high-grade ore and maximizes product output in the first 2 years with a positive effect on the project economics, allowing early project payback. There is also scope that additional high grade mineralization might be identified from further drilling at a later date along the line of strike of the tungsten mineralization, thus potentially allowing this mode of production to be sustained for several additional years.

This scenario resulted in mining taking place in only the first 3 years of the project, at a rate of 1.7Mt of ore per year (nominally 300,000 cubic metres of total material shifted per month). High-grade ore only is processed at the rate of 750,000tpa for approximately 3½ years, and the lower- grade ore below 0.3% WO3 cut-off is stockpiled for later processing in the remaining 3½ years of the project.

During the course of the next phase of study, Tungsten Mining will test these assumptions by infill drilling to increase the confidence in the Resource outlined by the optimized pits. Geotechnical work will be undertaken to assist in the final open pit designs.

The main Kilba excavation, in zone 11, is a single elongated pit approximately 1.2km long, up to 300m wide and up to 120m deep. Fresh rock (non-weathered) extends almost to surface, and a realistic pit slope of 55[o] , typical of other open cut mines in similar ground, with a 6m wide basal floor, was assumed.

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Figure 2: Schematic of Zone 11 pit outline

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Process

A process flowsheet was devised, based on the metallurgical testwork carried out. This resulted in a very conventional tungsten plant with a circuit employing 2-stage crushing, rodmill grinding and gravity separation in spirals and tables in parallel size streams.

A preliminary mass balance based on the sizing data and process response of the Kilba ore during the laboratory testwork was devised. All the major items of equipment to handle the duty of 750,000tpa of ore fed to the plant were sized, and up-to-date costs were used to factor an overall plant capital cost.

Diagnostic metallurgical tests were carried using a composite sample from a large-diameter drill core to characterize the Kilba ore in terms of its gravity-release behavior, and to give a prediction of the overall tungsten recovery achievable into a saleable concentrate.

The tests, mainly laboratory sink-float tests in heavy liquids of various densities separating different top-sizes of ore from 10mm to 0.25mm, indicated that the tungsten is present as coarse-grained scheelite, that the optimum liberation size of the tungsten is around 1 - 2mm, and that it should respond well to conventional gravity separation using, for example, spirals and shaking tables. An overall tungsten recovery of at least 80% was indicated.

Follow-up gravity separation testwork to verify the gravity response of the ore was conducted. These tests comprised shaking table trial separations, and further demonstrated that there should be no problem in producing a prime concentrate from the Kilba ore at a high

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tungsten recovery.

There was no magnetic or paramagnetic fraction in the sample tested, nor any sulphides. However, these may occur in practice and the project design does cater for their removal from the gravity concentrate.

The power component in the Study is based on diesel-powered generators, and Tungsten Mining is currently investigating the opportunity to reduce the unit rate for power by utilizing gas turbine generators.

Capital Cost

A breakdown of the capital expenditure required to implement the K i l b a Project is as follows:

Table 3: Project Capital Expenditure

Item	Cost($M)	Comment
Processplant	44	750ktpa gravity plant
Infrastructure	9	Camp, buildings, water, airstrip
Stores	3	15% of capital equipment
Total	56	Includes 15% contingency

The major capital component of the Project is the process plant. Mintrex estimated the plant capital cost by first deriving a viable process flowsheet based on the testwork results, then determining a major equipment list for the scale of operation envisaged (750,000t per annum) utilizing industry standard plant availability and utilization for this type of plant, based on a continuous working roster schedule.

The capital cost of the processing plant with the following specification was estimated:

• Annual duty: 750,000tpa

• Utilization: 7,500 hours per year

• Name plate capacity: 100t/h

• Two-stage crushing circuit

• 200t surge bin

• Open-circuit rod mill to 1.5mm

• 3-stage spirals

• Regrind ball mill

• 2-stage tables

• Classification by high-frequency screens

• High-rate thickener

• Concentrate dressing off-site

• Standard EPCM on-costs

• Contingency - 15%.

Total site power requirement is 3.8MW. This will be supplied from on-site diesel generators owned and installed by a service provider.

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Operating Cost

Mintrex estimated process operating costs based on the proposed plant circuit and throughput.

Table 4: Estimated Operating Costs

OperatingCost	Unit cost$/t	$/mtu,average
Mining	2.20	70
Processing	22.00	104
Administration	8.00	38
Total Operating Cost		212

Koolyanobbing Project

During the quarter a second reconnaissance trip, following up on work reported for the previous quarter, was made to the Koolyanobbing project near Southern Cross to conduct additional night lamping and to carry out sampling for soil geochemistry analyses. This work has allowed Tungsten Mining to focus-in on the more prospective areas and tenements, and will continue to be followed up.

Other Project Opportunities

Again, as with the previous quarter, several tungsten projects both in Australia and overseas were brought to Tungsten Mining’s attention and were evaluated. The company recognizes that such opportunities may continue to arise within the tungsten sector, and that they may be able to add value to the Company by leveraging on our knowledge and expertise in tungsten mining. These opportunities will be evaluated on their individual merits, but with our primary focus likely to remain development of the Company’s 100%-owned Kilba Project.

Corporate

Cash Management

During the quarter, the company paid exploration expenses of approximately $1.4m, and corporate or administration expenses of $0.16m. The cash position decreased by $1.59m, to a balance of $0.67m at quarter end. Budgeted cash flow for the September quarter is $0.5m, made up of exploration costs of $0.3m and administration/corporate expenses of $0.2m. Budgeted spend is not committed spend, and is subject to variation dependent on various operational factors.

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Announcements

The following announcements were made in the Junequarter:

June 21, 2013 Change of Director's Interest Notice June 20, 2013 Escrow Release, Appendix 3B & MD Employment Share Issue June 19, 2013 Scoping Study Clarification June 12, 2013 Positive Scoping Study Results - Kilba Project June 05, 2013 BRR Webcast - Maiden JORC for Kilba May 28, 2013 Maiden JORC Resource at Kilba Project April 29, 2013 Quarterly Activities Report and Cash Flow Statement April 16, 2013 Significant High Grade Intercepts at the Kilba Project April 11, 2013 Mines and Money Conference - TGN MD Interview

Competent Person’s Statement

The information in this report that relates to Exploration Targets and Exploration Results is based on information compiled by Peter Bleakley, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Bleakley has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Bleakley is a consultant to the mining industry. This report is issued with Mr Bleakley’s consent as to the form and context in which the exploration results appear.

About Tungsten

Tungsten is an extremely hard and dense grey-white metal which has the highest melting point of all metals and the highest high-temperature tensile strength. It is mainly in the form of tungsten carbide, or so-called “hard metal” that it is used as the hard-wearing surfaces in virtually all highspeed industrial machine tool applications, where it cannot be readily substituted. Such applications account for around 65% of tungsten consumption globally, while another 18% is used in steel alloys where high-temperature tensile strength, low coefficient of expansion or corrosion resistance is critical. Other important use categories are chemical catalysts used in the oil industry, fluorescent compounds, lighting and contact plates in high-capacitance electronic devices or storage batteries. The emerging economies, such as Brazil, India and China, are especially consuming increasing amounts of tungsten, as they strive to emulate the extent of industrialisation of the developed countries.

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Until 2005, China was the world's largest exporter of tungsten concentrate but rapid industrialization within China, structural economic changes, and changes in economic policies towards industry, have resulted in the total ban on exports of tungsten concentrate and restrictions of other tungsten exports from China, such as APT.

China is now the world's largest consumer of tungsten. Escalating Chinese consumption, in conjunction with the ongoing demand in the world's principal economies, have resulted in increases in the price of tungsten by 70% over the last five years. Tungsten prices are quoted per metric tonne unit (mtu) of contained tungstic oxide (WO3). One mtu is 10 kilograms of WO3 and is the standard weight measure of the tungsten trade. Ammonium Paratungstate ("APT") is an intermediate product in the tungsten fabrication chain, and the prices for individual shipments of mine tungsten concentrates under long-term supply agreements are typically calculated according to a set percentage (“pay factor”) of the APT price, which can typically be around 80%. The governing price basis of APT used for determining concentrate shipment prices is often that which is quoted weekly or twice-weekly in electronic trade magazines such as Metal Bulletin and Metal-Pages.

Due to the Chinese position on export restrictions, and to the strong global demand for tungsten, particularly in the developing countries, the fundamentals of the tungsten market remain strong, and Tungsten Mining, with its high quality assets in good mining jurisdictions in Australia, believes it is very well positioned to become a significant supplier of tungsten in a short time frame.

About Tungsten Mining

Tungsten Mining NL was admitted to ASX on 13 December, 2012. The Company is focused on development and exploitation of tungsten deposits. The management and Board of the company have previous experience in tungsten mine development and operations. Tungsten is the right sector to be in, with sound fundamental drivers giving strong demand and firm pricing. Visit our website at www.tungstenmining.com.

For further information contact:

Paul Berndt Managing Director Tel: +61 8 9477 3031 info@tungstenmining.com Colin Hay PPR Public Relations Tel: +61 8 9388 0944 colin.hay@ppr.com.au

Further information about the company's activities may be found at www.tungstenmining.com

Tungsten Mining NL| ASX: TGN Quarterly Activities Report June 2013

Appendix 5B Mining exploration entity quarterly report

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

	Tungsten Mining NL
	ABN 67 152 084 403 Consolidated statement of cash flows
			30 June 2013
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net Operating Cash Flows			Current quarter $A’000	Year to date (12 months) $A’000
			(1,436) (169) 9	(3,570) (1,086) 40
			(1,596)	(4,616)
Cash flows related to investing activities 1.8 Payment for purchases of:(a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (Investment in Subsidiary) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)			-	(300) (119)
			-	(419)
			(1,596)	(5,035)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

1.13	Total operating and investing cash flows (brought forward)	(1,596)	(5,035)
1.14 1.15 1.16 1.17 1.18 1.19	Cash flows related to financing activities Proceeds from issues of shares, options, etc. Proceeds from sale of forfeited shares Proceeds from borrowings Repayment of borrowings Dividends paid Other (Equity Raising Costs) Net financing cash flows	- -	5,110 (525)
		-	4,585
1.20 1.21 1.22	Net increase (decrease) in cash held Cash at beginning of quarter/year to date Exchange rate adjustments Cash at end ofquarter	(1,596) 2,270	(450) 1,124
		674	674

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.23 Aggregate amount of payments to the parties included in item 1.2 1.24 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
	85

• 1.25 Explanation necessary for an understanding of the transactions

Item 1.23 relates to Directors Remuneration, Directors Fees and Superannuation Contributions.

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

.

• 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

• • See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount available $A’000	Amount used $A’000
Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration			$A’000
			300
			200
Total			500

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details),,	674	2,270
Total: cash at end of quarter(item 1.22)	674	2,270

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
	E77/1944	100%	100%	0%
	NIL

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	79,054,379	34,054,379	-	-
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	15,000,000	-	Exercise price $0.40	Expiry date 30 June 2016
7.11 Debentures (totals only)
7.12 Unsecured notes(totals only)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Compliance statement

1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

2 This statement does give a true and fair view of the matters disclosed.

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Notes

1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

• See chapter 19 for defined terms.

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