Almonty Industries and Woulfe Mining Corp have entered into a non-binding letter of intent (LoI) to combine the businesses of the two companies and create the leading tungsten company outside China. The combined business will have two producing tungsten assets in Spain and Australia, and pre-construction assets in South Korea and Spain.

The merged entity will serve as an attractive platform for further accretive growth and consolidation in the global tungsten sector. Completion of the merger is subject to completion of due diligence process by both companies, expected to be completed within the next 30 days, and the satisfaction of certain conditions.

Under the terms of the merger, Almonty would acquire all outstanding common shares of Woulfe at a fixed price of Can$0.08 per share to be satisfied by each Woulfe share being exchanged for a fraction of an Almonty common share with such fractional Almonty common share having a fair market value on the effective date of the proposed transaction of Can$0.08.

The fixed price represents a 22.7% premium to Woulfe’s 30-day volume weighted average price (VWAP) for the period ending January 26, 2015. Upon completion of the merger, Woulfe shareholders will own approximately 41% to 48% of the merged entity, depending on the Almonty VWAP.

Woulfe’s principal asset is the Sangdong Tungsten/Molybdenum Project in South Korea, 187km southeast of Seoul. The property comprises 12 mining rights with an aggregate area of 3173 hectares.

Almonty’s principal assets are the Los Santos tungsten mine, producing 1100 tonnes/year of WO3, and the Wolfram Camp tungsten and molybdenum mine in Queensland Australia, which produced 700 tonnes of WO3 in 2013. In addition, Almonty is working towards commissioning of the Valtreixal tin/tungsten mine in north western Spain with anticipated production in 2017.

Woulfe’s president and CEO Michel Gaucher says, “By combining Woulfe and Almonty, we are creating the premier tungsten producer outside of China. The complementary expertise of Almonty’s and Woulfe’s highly experienced technical teams combined with an enhanced access to capital through the merger, will potentially advance the Sangdong project to production on an accelerated timeline. We believe this new company will provide investors with an ideal way to gain broader exposure to the tungsten sector.”

 

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