The acquisition is consistent with the Company’s goal of holding high-quality, past-producing tungsten mines with the potential for development of significant additional tungsten resources in northern Portugal. Exploration is underway, commencing with data compilation, mapping and sampling on the property.

The Vale das Gatas mine was the second most prolific past producer of tungsten in Portugal, after Borralha, also owned by Blackheath. The Vale das Gatas mine closed in 1986 as a result of a significant decline in tungsten price. At its peak, the mine employed over 1,000 workers and produced up to 635 tonnes of tungsten concentrates annually. Ore was mined primarily from quartz veins containing the tungsten mineral wolframite together with lesser amounts of the tin mineral cassiterite. The average recovered grade of the mine was 0.35% WO3 (tungsten trioxide) per tonne. The Vale das Gatas mine is held in the Vila Verde exploration concession which covers an area of 62 square kilometres located about 100 kilometres east of Porto in northern Portugal.

At least twenty-four wolframite-bearing sub-vertical quartz veins have been identified over some 550 metres. No drilling was ever undertaken on the property and reports from miners who worked at Vale das Gatas until its closure have reported that these veins were to be the next source of ore for the mine. Initial work by Blackheath will focus on mapping and sampling of these veins as well as general exploration in the surrounding area. To date, Blackheath has identified approximately 300 old mine workings on the property.

Blackheath’s President & CEO, James Robertson, said: "We are delighted to add this historic tungsten producer to our portfolio under very favourable terms. Initial work will commence immediately with a view to a diamond drill program early next year."

Blackheath holds the option for Vila Verde from Mineralia – Minas, Geotecnia e Construcoes, Lda. ("Mineralia") – through an exploration concession (the "Concession") granted by the Government of Portugal. The Concession is granted for a period of up to five years, after which it may be converted into a preliminary exploitation licences and a final exploitation licence successively. Under the Agreement, Blackheath will undertake to fulfill the terms of the Concession, include a minimum exploration expenditure of EUR220,000 during the first two years. Blackheath will also pay Mineralia EUR25,000 within six months of execution of the Agreement, a further EUR100,000 upon the grant of a preliminary exploitation licence and a further EUR1 million upon mine production and the grant of a final exploitation licence, at which time Blackheath will hold a 100% interest in the project.