Wolf Minerals Limited – Developing the World’s Next New Tungsten Mine
OVERVIEW
Wolf Minerals Limited (ASX:WLF,AIM:WLFE) is an emerging tungsten producer focused on the redevelopment of the Hemerdon Ball tungsten and tin mine located in Devon, England. The property currently hosts a JORC resource of 401Mt @0.13%WO3 and 0.02% Sn with 117Mt , making it the world’s third largest known tungsten deposit as described by the the British Geological Survey.
The Company plans to develop the Hemerdon project into a low cost, large scale open pit mining operation. The redevelopment of the mine is expected to be completed commissioning of the processing plant planned in 2014. Wolf Minerals is managed by an experienced team of British and Australian mining professionals with a track-record of continued success.
INVESTMENT HIGHLIGHTS
- Completed DFS confirms robust project economics including low operating production costs forecast at just US$105/mtu
- £75 m of required ~£129 m (A$200 m) secured through senior debt
- Off-take agreements for 80% of production
- Third largest tungsten resource in the world
- Actively working toward becoming the first new Tungsten mine to go into production with redevelopment planned for 2013
KEY PROJECT
Hemerdon Tungsten Mine, Devon, England
The Hemerdon Tungsten Mine is located approximately 10 km north east of Plymouth, in Devon, England. The project site has access to existing infrastructure and borders near existing open pit clay mining operations. Wolf Minerals acquired the property in 2007 with a pre-existing planning permission valid until 2021. This planning permission was updated with input from Devon County Council and key statutory stakeholders in January 2011.
An extensive tungsten and tin deposit was first discovered at Hemerdon in the 1860’s. The mineralization is characterized by sheeted greisen veining and stock works containing wolframite and cassiterite. The vein system is hosted within a dyke like granite body. The mineralization starts from the surface and is contained within the steeply dipping granite body flanked by metamorphosed sediments. Hemerdon wasn’t developed until around 1914 when the need for metal in weaponry during World War I drove tungsten demand much higher. Commercial production continued although sporadically until the mine’s closure in 1945. The total production from Hemerdon during the war period was limited and represents about 1 month’s production from the new operation.
Between 1977-1981, the previous owner AMAX undertook a significant exploration program within the project area, completing 532 drill holes for 25,400m. The company also completed a comprehensive feasibility study and secured the current mining licence which is valid until 2021. AMAX had placed the project on hold due to falling tungsten prices.
In 2007, Wolf acquired the project via an option agreement for a 40 year lease, and began validating the historical drill data and updating the feasibility study. An infill drill program was also carried out, upgrading the resource to the JORC standard showing an estimated 401Mt @0.13%WO3 and 0.02% Sn with 117Mt within the Measured and Indicated categories. In May 2011, the Company completed a Definitive Feasibility Study (DFS) on the property, the results of which indicate robust economics based on a 3Mtpa operation over a 9.25 year life of mine. Production is estimated at approximately 350,000 mtu per annum of a wolframite tungsten concentrate with a grade of 65% WO3.
North View of the Hemerdon Feasibility Study Pit
The total funds required to advance Hemerdon into production are estimated at approximately £130 m. In November of 2012, Wolf secured £75 m though a senior debt facility and still has several options available for funding the balance.
Once in full commercial production, Wolf can seek permission to extend the pit boundaries to access additional ore, extending the mine life and potential returns of the project. The current pit design allows for an open pit with a maximum depth of approximately 200 m. During its exploration work, the previous operator AMAX completed two exploratory drill holes that have indicated continuity of mineralisation to a depth of approximately 400 m and with mineralisation still open at depth. This provides scope for an additional approximate five years’ ore production, increasing the life of mine to about 15 years. Wolf is also reviewing options to extend the mine beneath this extended pit to access this deeper ore through underground mining with a decline from the base of the open pit.
Aerial view of the planning permission extent at the Hemerdon Tungsten and Tin Project
Wolf is now finalizing an 80 percent off take agreement with two of the world’s largest tungsten producers: Wolfram Bergbau und Hutten AG, Austria, and Global Tungsten & Powders Corp, Pennsylvania, US.
In July 2012, Wolf opened a 600 m public access road in preparation for continued developed at the site. The redevelopment of the mine is expected to commence in early 2013 pending final funding with plant commissioning expected in late 2014.
SUMMARY
Wolf Minerals Limited is on the fast-track toward becoming the world’s next tungsten producer. The Company’s main focus is the redevelopment of the Hemerdon Ball tungsten mine located in Devon, England—the world’s third largest known tungsten deposit, expected to be completed in 2013. Wolf Minerals is managed by an experienced team of British and Australian mining professionals.
Wolf Minerals plans to develop the Hemerdon project into a low cost, large scale open pit mining operation. A completed Definitive Feasibility Study confirms robust project economics including low operating production costs forecast at just US$105/mtu. The Company is finalizing off-take agreements for 80 percent of production.
MANAGEMENT
Humphrey Hale – Executive Managing Director
Mr. Hale has 20 years experience in the mining industry. This experience has principally been gained through exploration, resource development and mine feasibility roles for mining and exploration companies in various commodities. He is a past founding director of a private gold exploration company in Queensland. Mr. Hale spent 5 years with an exploration and mining consultancy where he gained experience in multiple commodities before taking on management of near mine exploration including a major feasibility study to establish an underground mine for AngloGold Ashanti.
Richard Lucas – Chief Financial Officer and Company Secretary
Mr. Lucas has been appointed as Chief Financial Officer and Company Secretary. He reached Director level at PWC and was seconded to Lihir Gold as Commercial Manager. Mr Lucas was more recently with the Geotech Group as Chief Financial Officer.
John Hopkins – Chairman
Mr. Hopkins is a professional company director and chairman. He is a law graduate of the University of Western Australia and was admitted to practice as a barrister and solicitor for more than 35 years. He has been on the board or chairman of nearly 20 publicly-listed companies since 1985 (both in Australia and Canada) and as such has been involved in the financing and development (and subsequent M & A activities) of many gold, base metal, energy (coal and oil & gas), mineral sands and other resource projects in both Australia and overseas.
More recently Mr. Hopkins founded Fireside Resources Ltd., as Executive Chairman, an Australian public company which has acquired a number of resource projects in Indonesia. This company was acquired in 2010 by ASX-listed Indo Mines Ltd. He was chairman of ASX-listed emerging gold producer Adamus Resources Ltd (ADU) and oversaw its transition from explorer to producer. Recently he has stepped down as Chair of ASX-listed companies Dragon Mountain Gold Ltd (DMG) and gas explorer Exoma Energy Ltd (EXE) following management moving to China and Queensland respectively. Mr. Hopkins is a Fellow of the Australian Institute of Company Directors.
Don Newport – Director
Mr. Newport brings a wealth of mining project finance experience to the company. He is based in the UK and has more than 35 years of banking experience, of which 25 years spent in the mining and resource sector. He recently retired as the head of Standard Bank’s Global Mining Finance Business. Prior to moving to Standard Bank, he led the Barclay’s Capital Mining Sector Team. He has led or been closely associated with a number of significant mining corporate and project financing and has undertaken a variety of financial advisory roles. Mr. Newport is an Associate of the Chartered Institute of Bankers and holds the Certified Accountant’s Diploma in Accounting and Finance.
Jonathan Downes – Director
Mr. Downes has more than 16 years’ experience in the minerals industry and has worked in various geological and corporate capacities. He has experience in nickel, gold and base metals and has been intimately involved with numerous private and public capital raisings. Mr. Downes was a founding director of Hibernia Gold (now Moly Mines Limited) and Siberia Mining Corporation Limited (now owned by Monarch Resources Limited). He was an Executive Director of Siberia Mining Corporation Limited and is currently a Non Executive director of Graynic Metals Limited, Non Executive Director of Sabre Resources and the Managing Director of Ironbark Zinc Limited.
Jim Williams – Director
Mr. Williams is a highly experienced mining consultant with a long and successful career spanning the globe in open pit and underground mining engineering. He served as Chief Mining Engineer for Bechtel in Australasia, Principal Mining Consultant for Minproc Engineers and CEO for Laverton Gold. Most recently, he was the founding Head of Mining for Fortescue Metals Group Ltd. As a Consulting Engineer he has reviewed more than twenty Feasibility Studies for major international banks. Mr. Williams is a graduate of the Camborne School of Mines. He is also a Chartered Engineer and a Fellow of the AusIMM and a past Chairman of the Perth Branch.
Adrian Byass – Director
Mr. Byass has more than 16 years’ experience in the mining and minerals industry. This experience has principally been gained through mining, resource estimation, and mine development roles for several gold and nickel mining and exploration companies. Through his experience in resource estimation and professional association membership, he is a Competent Person for reporting to the ASX for certain minerals. Mr. Byass has also gained experience in corporate finance and financial modeling during his employment with publicly listed mining companies. He was a founder of Siberia Mining Corporation Limited (now owned by Monarch Resources Limited) and Hibernia Gold (now Moly Mines Limited). He is currently an Executive Director of Ironbark Zinc Limited.
Chris Corbett – Director
Mr. Corbett has more than 13 years’ experience in mining, corporate business development and investment management. He is currently employed by Resource Capital Fund. His prior experience was gained in mine development, production and construction with contractor Byrnecut Mining Pty Ltd and corporate and divisional business development roles with Wesfarmers Limited. He is a graduate of the University of Western Australia with degrees in Engineering and Commerce and has also completed postgraduate qualifications in Mining and Finance. Mr. Corbett is a member of Engineers Australia and a member of the Australian Institute of Company Directors.
