Wolf Minerals Limited Wolf Gets Additional £5m,Tungsten Market Improves (3994P)
31 August 2017 - 4:10PM
UK Regulatory
TIDMWLFE
RNS Number : 3994P
Wolf Minerals Limited
31 August 2017
31 August 2017
Wolf Minerals Limited
Wolf Receives Additional GBP5 Million As Tungsten Market
Improves
Specialty metals producer, Wolf Minerals (ASX: WLF, AIM: WLFE)
(Wolf or the Company) is pleased to provide an update on the
Company's financing arrangements to support its short term working
capital, whilst additional funding requirements for long term
self-sustainable operations at the Drakelands open pit mine
(Drakelands) are being reviewed.
Highlights
-- Existing Bridge Facility increased from GBP40 million to GBP45 million.
-- Operating turnaround plan on schedule.
-- Price of tungsten increasing, currently US$269 per mtu.
-- Funds will be used to support operation of the Drakelands
mine as Wolf works towards commercial production and design
performance.
The Company is pleased to announce that it has received
confirmation from Resource Capital Fund VI L.P. (RCF VI) that the
release of the further GBP5 million, which represents the remaining
uncommitted amount of the existing bridge facility in place with
RCF VI (as announced on 28 June 2017) (the Bridge Facility) has
been approved on the same terms as previously announced.
The funds advanced under the Bridge Facility to date have been
utilised to progress the operating turnaround plan which is
currently on schedule, including:
-- Primary DMS Phase 1 modifications completed in August, with
Phase 2 implementation planned for 9 September. Initial results are
encouraging with availability above target and recoveries starting
to improve.
-- Refinery Phase 1 modifications were completed last week and
are currently being commissioned. Initial performance indicators
are on plan and Wolf expects an increase in throughput and
availability as a result. Phase 2 refinery changes are on schedule
for mid-October.
-- Gravity fines modifications are underway, with initial
changes taking place last week. The remainder of the works will
take place over the next 8 weeks to minimise the impact on
production, with commissioning into early November.
These modifications along with improved operating discipline
across the business are expected to provide the necessary
foundation for sustainable performance into next year.
In addition to the improvements in operating performance, Wolf
has also seen an improving trend in the price of tungsten, with a
44% increase since December 2016 from US$187 per mtu to US$269 per
mtu in August 2017. The strong price growth has been particularly
evident recently with a monthly increase of US$30 per mtu in both
July and August.
The combination of a rising tungsten market, improvements from
the operating turnaround plan and additional proceeds from the
Bridge Facility has provided an opportunity for the Company to
reassess its funding requirements to become a long-term
self-sustaining business.
Wolf Interim Managing Director, Richard Lucas, commented:
"The operating turnaround plan is progressing to schedule with
the initial results of recent changes reinforcing the plan's
objectives. In addition, the significant increase in the price of
tungsten in recent months reflects the anticipated improvement in
the market following a prolonged downturn. These are encouraging
signs, which support our long term business objectives and provide
a stronger platform for discussions on Wolf's future funding
needs."
Bridge Facility
The funding is being provided on the same terms as the Bridge
Facility announced on 28 June 2017, including that it will be fully
secured.
The Company anticipates receiving the drawdown of GBP5 million
under the Bridge Facility during September 2017.
As previously announced, if certain conditions precedent are
satisfied (including shareholder approval), the Bridge Facility
will mandatorily switch to a subordinated convertible loan in
October 2017, or a subordinated loan if those conditions are not
satisfied. As soon as reasonably practicable, the Company will seek
shareholder approval to enable the issue of the convertible note
and subsequent conversion into ordinary shares in accordance with
the convertible loan terms under the Bridge Facility. The
convertible loan is also conditional upon, amongst other things,
RCF VI obtaining FIRB approval.
ENDS
Numis Securities: John Prior/James
Black/Paul Gillam +44(0)20 7260 1000
Newgate: Adam Lloyd / Ed Treadwell +44 (0) 20 7653 9850
Wolf Minerals Limited: Richard Lucas +61 (0) 8 6143 2070
About Wolf Minerals
Wolf Minerals is a dual listed ("ASX: WLF", "AIM: WLFE")
specialty metals company. Wolf Minerals has recently completed the
development of a large tungsten resource at its Drakelands Mine,
located at Hemerdon, in southwest England.
This information is provided by RNS
The company news service from the London Stock Exchange
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