North American Tungsten Corporation Ltd., Vancouver, BC., TSX : NTC, is the Western World's largest producer of tungsten concentrate, a strategic industrial metal required in a wide variety of products ranging from jet turbine engines and high-speed cutting tools to electronic circuitry and surgical instruments.

NTC is engaged primarily in the operation, development, and acquisition of tungsten and other related mineral properties in Canada.

The Company's 100% owned Cantung mine and MacTung development project make it one of the few tungsten producers with both a producing mine and strategic development asset in the western world.

The Company is the most significant producer of tungsten concentrates in North America.

The Company’s focus is increasingly on the development of the Mactung property. In 2008, there was considerable activity on the ground: a summer site program was conducted that included an in-fill drilling program, geotechnical drilling for site facilities and additional environmental studies.

Plans are currently being developed for the 2009 Mactung field program. The Company initiated the process of environmental review by the Yukon Environmental and Socio-economic ssessment Board (“YESAB”) and released Wardrop Engineering Inc.’s positive feasibility study of the project.

In December 2008, the Company finalized an agreement with Tundra Particle Technologies, LLC and Queenwood Capital Partners LLC. Tundra Diversified Industries LLC (TDI) has been formed.

The Company also entered into a supply agreement with TDI to supply concentrates and or APT and Tungsten Blue Oxide from its Cantung mine and Mactung mine should Mactung be brought into commercial production.

Pricing for these products is market based. Queenwood has invested US$2.5 million to purchase its interest in TDI. TDI will produce and market tungsten composites which will allow for immediate access to the developing lead replacement market.

As a result of the reorganization of Tundra Diversified Industries, LLC (“TDI”) (formerly Tungsten Joint Venture LLC “TJV”) the Company’s interest was reduced from 100% to 43.2%. The remaining 56.8% is held by Tundra Particle Technologies, LLC (“TPT”) as to 43.2% and Queenwood Capital Partners, LLC (“Queenwood”) as to 13.6%.

The Company’s interest in Tundra Diversified Industries is now accounted for as equity accounted investment.

As TDI issued its own equity to outside interests, a dilution gain of $3.08 million arose as a result of the difference between the Company’s share of the proceeds and the carrying value of the underlying equity.

BUSINESS OVERVIEW

Positive advances were made by the Company in the fiscal quarter ended December 31, 2008.

• Production at the Cantung mine increased by 6% over the first quarter of the previous year.
• Tungsten sales revenues rose by 49.7% over the first quarter of the previous year.
• Development work to exploit a new zone at the Cantung mine commenced.
• The Company released an update of ore reserves which confirmed that net depletion of the tungsten reserves has been relatively small.
• The feasibility study for the Mactung project was completed and released.
• Mactung is forecast to produce 752,000 MTU’s of Tungsten Trioxide per year over its first five years.
• Mactung’s pre-tax internal rate of return is projected at 23.5%; capital payback is expected within 2.9 years based on an APT price of $US 300 per mtu.
• Through the reorganization of Tungsten Diversified Industries LLC (43.2% owned) the Company will integrate forward into new tungsten products and uses that move the Company’s markets up the value-added chain.
• World tungsten prices have stabilized, largely avoiding the dramatic decreases of other commodities.
• Scheelite production increased 22% from 65,297 MTUS in Q1 2008 to 79,978 MTUS in Q1 2009.
• The net earnings were $4.92 million in Q1 2009 compared to a net loss of $4.0 million in Q1 2008.
• Quarter end working capital was $2.0 million compared to $0.70 million at September 30, 2008.

Mactung property

MacTung is one of the world's largest known undeveloped high grade tungsten-skarn deposits.

The Mactung property is located in the Selwyn Mountain Range and covers the area around Mt. Allan on the Yukon/NWT border, approximately eight kilometres northwest of MacMillan Pass.

The nearest settlement accessible by road, Ross River, is 250 km away to the southwest along the Canol Road, a drive that takes about six hours. The property is located at latitude 63º17'N and longitude 130º10'W, and the Cantung Mine is approximately 160 km to the south.

Geology

The Mactung deposit is located in the eastern Selwyn Basin, an outer miogeoclinal basin that formed on the then western margin of the North American continent. The dominantly thin-bedded siliciclastic rocks (shale, chert, and basinal limestone) grade to the northeast into the thick-bedded carbonate sediments of the variably subsiding Mackenzie Platform.

Cantung Mine

The Cantung Mine is located in the western Northwest Territories, Canada, approximately 300 km northeast of Watson Lake, Yukon, close to the Yukon border. The mine is a primary producer of tungsten concentrate from open pit and underground mines. It was opened in 1962.

Land Tenure

NATC has leases from DIAND covering the mine and associated service areas. The current leases are listed in the table below. Scott Wilson RPA has relied on NATC data for this information and has not independently confirmed the status of the claims and leases.

Reserves

The CanTung mine has a NI43-101 probable reserve of 1 million tons at 1.17% WO3 (1.1 million MTU'S); indicated resource of approximately 3 million tons at 1.21% WO3 (3.2 million MTU'S); and an inferred resource of 734,000 tons at 0.74% WO3 (493,000 MTU's). These reserves were calculated as of September 2006.

Production

The mine is expected to produce 400,000 metric tonne units of concentrate a year.

Jennings Property

On January 7, 2008 the Company announced that Agnico-Eagle Mines Limited exercised its option to increase its interest in the Jennings tungsten/molybdenum property from 50% to 70% via C$4 million in exploration expenditure by December 31, 2010.

The Jennings property agreement was established on April 25, 2006 whereby Agnico-Eagle Mines Limited agreed to spend C$400,000 on exploration to acquire an initial 50% of the property. The property is located near the BC-Yukon border about 85 kilometers west of Watson Lake, Yukon, Canada. North American Tungsten may elect to form a participating Joint Venture or convert its 30% working interest to a 2.5% NSR after Agnico-Eagle Mines Limited fulfills its C$4 million expenditure requirement.

Agnico Eagle previously released drill results from their drill program which indicated tungsten (WO3) grades of up to 0.120% and molybdenum (MoS2) grades of up to 0.167%.

A diamond drilling program was completed during the 2008 summer drilling season in which eight NQ core holes were drilled totaling 4,026 meters.

Total expenditures on the project in 2008 were approximately $1.2 million.

Outlook

For the long term, the Company expects that the development of the Mactung project will enhance the Company’s position as a leading supplier of tungsten concentrates.

Production from the Cantung mine may permit the Company to maintain its market share until Mactung production commences; however this will depend on the ability of the Cantung mine to increase its ore reserves through its current underground and surface exploration efforts.

The Company has embarked on a very aggressive underground diamond drilling program at the Cantung mine utilizing contracted diamond drills to identify additional resources.

The Company has recently acquired additional key pieces of mining equipment to facilitate development access to resources identified by the diamond drilling program. The Company is in the process of establishing a copper recovery circuit at the Cantung mine.

The Company published an updated 43-101 compliant mineral resource and reserve update for the Cantung Mine on January 29, 2009 extending the current mine life to approximately Q3 2010.

Production for Q1 2009 was 79,978 MTUS from 100,607 tons of ore grading 1.17% WO3 which exceeded the highest production quarter of fiscal 2008 of 75,633 MTUS produced in Q4 2008.

The Company continues to develop additional value added initiatives through the use of tolling arrangements to APT and Tungsten Blue Oxide working with key industry manufacturers with the view of enhancing cash flows.

The Company has recently benefitted from a weakening in the Canadian dollar combined with rapidly decreasing fuel prices as well as relatively resilient tungsten commodity prices.

GLOSSARY OF TERMS

• APT: ammonium paratungstate is an intermediate product which is one of the principal chemical forms in which tungsten is traded
• Concentrates: the valuable fraction of an ore that is left after waste material is removed in processing
• MTU: metric tonne unit of 1 percent of a metric tonne (22.046 pounds) of contained WO3
• Scheelite: A brown tetragonal mineral, CaWO4. It is found in pneumatolytic veins associated with quartz, and fluoresces to show a blue color. Scheelite is a mineral of tungsten
• STU: short ton unit of 20lbs. WO3 contained in concentrate
• TBO: tungsten blue oxide is a finely divided blue-violet crystalline powder used primarily for the production of tungsten metal powder and tungsten carbide
• Ton: equal to 2,000 pounds
• Tonne: a metric unit equal to 2,204.6 pounds
• Tungsten concentrates: concentrates generally containing between 40 and 75 percent WO 3
• W: the elemental symbol for tungsten
• West Extension: a continuation (down dip and to the west) of the main E-Zone ore body
• WO3: tungsten tri-oxide (containing 79.33% W) a compound of tungsten and oxygen.