Woulfe Mining is on schedule to bring its Sangdong tungsten-molybdenum mine into production in 2013. The company is working to catch up on delays to the feasibility study resulting from moving the metallurgical and test work to China.
This process involved changing the design of the mine access to expand the existing access tunnel, with work starting next month. Woulfe is also purchasing the land from the county to enable construction of the mine to start.
Woulfe’s president Brian Wesson says, “We appreciate the understanding and support we have received from our shareholders as we move to de-risk the company and build, what will be the world’s largest producing tungsten mine. We will be able to push forward with the Sangdong access tunnel and land purchase next month after we receive the funds from the convertible debenture.”
An offering of Can$20 million was announced earlier this month, to ensure the project would remain on schedule to begin production next year. “The convertible debt strengthens the treasury and allows the company to move forward on Sangdong, maintaining the momentum and getting to cashflow as quick as possible which is the most important objective. We have provision to buy back 30% of the notes and once the company is in production with strong cashflow we could buy back stock. As funds become available to secure against the volatile world and move to production, we remove a huge amount of risk for our shareholders,” says Brian Wesson.
Woulfe is also in negotiations with international and domestic Korean banks for a project debt facility of up to US$110 million, with indications that the banks approached are comfortable with approving a debt package for Sangdong.
In partnership with IMC, Woulfe is developing the Sangdong mine which is about 187km southeast of Seoul. It was one of the world’s largest and most renowned tungsten mines before Korea Tungsten closed down operations in 1993 due to falling commodity prices. Woulfe has spent the last 21 months building the Sangdong team to reopen the mine.