TIDMWLFE
RNS Number : 9391C
Wolf Minerals Limited
23 January 2015
23 January 2015
Quarterly Activities Report
For the three months ending 31 December 2014
Specialty metals development company, Wolf Minerals Limited
(ASX: WLF, AIM: WLFE) ("Wolf" or "the Company") is pleased to
provide the following update on its Drakelands open pit mine
("Drakelands") currently being constructed at the Company's world
class Hemerdon tungsten and tin project ("the Project") in Devon,
southwest England, for the three month period to 31 December
2014.
Highlights for the December 2014 quarter include:
ü Construction of Project 67% complete as at quarter end.
ü Construction remains on track and fully funded with dry
commissioning scheduled to commence in March 2015, and production
expected Q3, 2015.
ü Development expenditure of A$50.3 million for the quarter.
ü Geotechnical diamond drill programme completed with potential
to increase ore reserves by 15% to 23% within existing planning
permission.
ü Laboratory Services and Power Supply contracts awarded for the
Project.
Commenting on the December quarter performance, Wolf's Managing
Director, Russell Clark said:
"This has been another successful quarter for Wolf. The Project
remains fully funded and construction activity remains on track,
with dry commissioning scheduled to commence in March 2015.
Contracts for power and laboratory services have been finalised and
the establishment of our employee team is progressing well, with
key technical personnel now in place. In addition we have completed
the geotechnical drilling programme with the results highlighting
great potential to increase both our ore reserves and mine
life."
Continued Draw-down of GBP75M Senior Debt Finance
During the quarter Wolf drew-down GBP17.5 million of the GBP75
million senior debt finance facilities to fund the construction of
the Project, and at the end of the quarter a total of GBP27.5
million had been drawn.
The senior debt finance facilities comprise a GBP70 million term
loan facility and a GBP5 million bond facility, and have been
provided by a consortia of leading, global mining financiers;
UniCredit Bank AG, London Branch, ING Bank N.V. and Caterpillar
Financial SARL.
The Project remains fully funded from existing facilities
available to the Company through construction and to positive cash
flow.
Project Construction Update
The construction of the Project commenced in February 2014.
The Company is pleased to advise that, as at the end of the
December 2014 quarter, construction was 67% complete and remains on
schedule. The Project's Engineering-Procurement-Construction
("EPC") contractor, GR Engineering Services Limited (ASX:GNG)
("GRES"), expects to commence dry commissioning of the plant in
March 2015, with the hand over to Wolf scheduled for the third
quarter of 2015.
By the end of the December 2014 quarter, significant further
progress had been made at the site including:
-- Continued progress on the Mine Waste Facility. This facility
accommodates the waste from both the mine and the processing plant
and is one of the key components of the Project. As expected,
construction of the facility has slowed during the winter months
and is still on track to be available for the scheduled plant
commissioning.
-- All structural concrete pours are now complete.
-- Structural steel erection is well underway and is 44% complete.
-- All plant equipment has been delivered to site or is in
transit to site, allowing for immediate installation as the
foundations or supporting steelwork becomes available.
-- Administration, laboratory and amenities buildings have been
completed and will be commissioned in early 2015.
-- Development of the open pit continued with the excavation
waste used in the construction of the Mine Waste Facility. There is
no overburden removal required to access the orebody, as it is
exposed at surface from historic operations.
-- Over 100,000 tonnes of ore have been stockpiled at the mine.
This ore was extracted during the mining of waste used for the
construction of the Mine Waste Facility and will form the basis of
the initial feed to the processing plant.
-- Recruitment of key professional staff has continued with the
Company having 37 employees working directly for Wolf Minerals (UK)
Limited at the end of the December quarter with a number of new
recruits to start in January 2015.
-- At the end of December there were over 350 people working at the project site.
-- Tree planting and stone wall reconstruction activities
commenced during the quarter, with 40,000 trees to be planted by
June 2015.
The total development expenditure for the December 2014 quarter
was A$50.3 million with the majority related to payments for
construction progress to the EPC contractor and the mining
contractor.
Geotechnical Diamond Drilling Programme Completed
As reported in the September 2014 quarterly report, the Company
has undertaken a geotechnical diamond drill programme around the
perimeter of the open pit, designed to provide more comprehensive
data on the waste rock. The aim of the programme is to assess the
potential to steepen the pit walls within the existing Planning
Permission which will allow for a deeper pit and an increase in ore
reserves.
The six hole geotechnical drilling programme was completed
during the December 2014 quarter, with initial analysis suggesting
potential to increase ore reserves by between 15% to 23% within the
existing planning permission (refer to announcement dated 1
December 2014). Detailed design and re-assessment of ore reserves
will be undertaken during the current quarter.
Assay Laboratory Services Contract Awarded
During the quarter Wolf finalised and awarded the Assay
Laboratory Services contract for the Project to SGS (refer to
announcement dated 22 December 2014).
Under the terms of the contract SGS will provide all the
necessary assay laboratory services at the Project for a five year
period. Services will include the assay of grade control samples,
process plant samples and final product samples. SGS will also
provide verification and certification of the products being sent
to customers.
SGS is the world's leading inspection, verification, testing and
certification company and has more than 80,000 employees and more
than 1,650 offices and laboratories around the world.
Power Supply Contract Awarded
Subsequent to the quarter, the Company announced it had
finalised and awarded the Power Supply contract for the Project to
DONG Energy (refer announcement dated 6 January 2015).
DONG Energy is 59% owned by the Danish Government and its UK
businesses include offshore wind power, exploration and the
production of oil and gas.
The contract was awarded following a tender process conducted by
The Energy Services Partnership Ltd. Under the contract DONG Energy
will supply a projected 82GWh to the operation for a three year
period.
Both the forecast power prices and the assaying costs, from the
Assay Laboratory contract, are in line with estimates contained in
the Definitive Feasibility Study of May 2011, and will contribute
to Wolf being a low cost tungsten producer.
Construction Progress - On-site Time Lapse Photography
The Company's website has time lapse photography showing the
progress of both the processing plant site and mine site which can
be seen at:
http://wolfminerals.com.au/content/page/live-streaming-video.html
:
ENDS
For further details, please contact:
Wolf Minerals Limited +61 8 6364 3776
Russell Clark admin@wolfminerals.com.au
Numis Securities
John Prior/James Black/Paul Gillam +44(0)20 7260 1000
Newgate Threadneedle
Tim Thompson / Adam Lloyd / Ed Treadwell
/ Helena Bogle +44 (0) 20 7653 9850
About Wolf Minerals
Wolf Minerals is a dual listed ("ASX: WLF", "AIM: WLFE")
specialty metals company. With global demand for tungsten rising
and future global production expected to be constrained, Wolf
Minerals is developing the third largest global tungsten resource
at its Hemerdon project, located in southwest England. The Company
has strong cornerstone investors and project finance and
environmental permitting is in place. Wolf has also secured all
major contracts for the project, with GR Engineering appointed as
the EPC contractor and CA Blackwell being awarded the Mining
contract. Production is expected to commence in mid-2015.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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