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PrintWolf Minerals is set to commence project development activities at the Hemerdon tungsten project, after securing a A$6 million capital facility from Resource Capital Fund.
Hemerdon is the world’s fourth largest tungsten deposit.
Today's facility follows a positive Definitive Feasibility Study on the Hemerdon project which indicated a robust project with potentially: low cost tungsten production with tin credits, a mining license in place for 10 years with permission to extend mine life to 14 years and first production in first quarter of 2014.
Key DFS parameters included:
- NPV of £74 million (A$118 million)
- Internal Rate of Return (IRR) of 21% - 26% based on an ATP price of US$360 - US$415 per mtu
- Current ATP price is US$460/mtu.
- C1 Cash Cost of US$105/ mtu with CAPEX of £104 million (A$166.5 million) and
- Pay Back Period of 2.75 – 3.25 years
The DFS pit design and mine life is only limited by the current, approved planning permission, with the permission to develop the mine removing risk and allowing the company to move towards production quickly.
Wolf also announced today that discussions on indicative terms for the senior debt facility for Hemerdon have commenced with European and Australian banks.
The company said the new funding facility will enable; the construction of a significant public road as part of the project development; continuation of archaeological trenching over the proposed minesite ahead of construction; and funds will also be deployed in engaging further key personnel.
First production of tungsten with tin credits is forecast for the March quarter 2014.
The project would provide a politically stable source of supply for European and North American end users. Auguring well for the project is the positive outlook for tungsten.
The largest end-use for tungsten is in the manufacture of hardmetals (cemented carbines), which represented approximately 54% of global consumption in 2009. This is followed by the steels/alloys sector with around 27% of global consumption. Mill products (13%) and other applications (6%) make up the remainder.
Wolf will look to extend Planning Permission (Mining Licence) to mine the Measured and Indicated Resources which lie outside of the approved planning permission pit design. This will add a further two years to Hemerdon’s operating life.
The DFS two stage pit design provides an opportunity to steepen the final pit walls, resulting in a potential increase of a further three years to the mineable reserves, for a combined total of five additional years (~50%) to the DFS mine life.
Longer term, mineralisation at Hemerdon is open at depth to 400 metres and along strike, providing the opportunity to expand pit design further and extend mine life by many years.
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