An NI 43-101 compliant preliminary economic assessment (PEA) of Woulfe Mining’s Muguk gold project in South Korea indicates it’s a potentially viable project that will return a positive net discounted cash flow.

The company says no insoluble technical issues were identified in the PEA which could prevent the project from proceeding and it now has the incentive to continue to advance the mine.

Woulfe’s president Brian Wesson says, “The PEA indicates that the project is economic as it has a positive NPV. We are also excited that this was based on mining one of the nine veins on the field and does not include any of the silver.

“Muguk was Korea’s largest producing gold project and developing the Three Brothers vein will allow for exploration of the field that has substantial underground development,” he said.

The PEA was based on a mine design and schedule underpinned by an inferred mineral resource of 728,000 tonnes grading 7.0 grams/tonne gold. Capital expenditure of US$60 million will be needed to construct the processing plant, access decline, engineering and construction management. The company estimates the mine will break even in its sixth year of operation.

The Muguk gold-silver mineralization is hosted within a series of parallel, steeply dipping quartz veins that extend discontinuously for up to 2000 metres along strike and to a known depth of 800 metres. The average width of the veins is typically less than 1 metre, but can be up to 2 metres in width in places.

The Three Brothers vein and the No 2 vein are the most significant mineralized structures in the goldfield, however there are a number of other veins including Baksan, Geumyong, and Nos 1 and 7-11 veins which have only been partly explored and developed.

In other news, the company and its South Korean subsidiary, Sangdong Mining, have entered into a strategic arrangement with IMC International Metalworking Companies BV and its affiliates.

Once IMC has completed due diligence on the arrangement, it will advance Sangdong Can$5 million to progress its tungsten-molybdenum mine and in turn acquire a 25% interest in the project on payment of a further Can$30 million.

Woulfe and IMC are jointly establishing a Korean company (APT JV) which will be 45% Woulfe-owned and 55% IMC-owned to build a tungsten concentrate processing facility.

“We are excited and honoured to have concluded our negotiations for the strategic alliance of the company with IMC. We believe that working with one of the world's largest tungsten end users, is extremely beneficial for Woulfe Mining,” says Brian Wesson.

www.woulfemining.com

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