North American Tungsten Corp. will temporarily close down its Cantung mine near the N.W.T.-Yukon border in October, the company announced Monday.

In a release, president Stephen Leahy cited declining tungsten prices and increasing stockpiles of ore for the company's decision to suspend operations at the mine effective Oct. 15.

The mine will then be put on a "care and maintenance program," with the hopes that it can be brought back into production when market conditions improve, Leahy said.

"This has been a difficult decision as we have seen our tungsten team evolve to be among the best in the world," Leahy stated in Monday's release.

"I expect that a tungsten supply shortfall will develop as the world economy improves. We fully intend to pursue plans to return the mine to full operations after markets have significantly firmed."

Leahy said the company will now focus on exploring at its Mactung deposit this summer, although it says it will conduct exploration drilling at Cantung as well.

The Cantung mine is located in the western Northwest Territories, just east of the Yukon border. It is accessible by a 300-kilometre all-weather road from Watson Lake, Yukon.

Almost every business in the town will be affected by the mine's shutdown, said Norm Griffiths, president of the Watson Lake Chamber of Commerce.

"The grocery store does supply. There [are] supplies that come from just about all of the business aspects," Griffiths told CBC News on Monday.

"There is also many of the other stores who would be selling anything from bug dope to rain gear or any of the industrial-type clothing required. So yeah, it affects everybody all across the whole spectrum."

The Cantung mine has gone through several owners since prospectors discovered a tungsten deposit there in 1954. North American Tungsten reopened the mine in December 2001, according to the company's website.

Work was suspended two years later, when North American Tungsten was placed under creditor protection, but production resumed in 2005.