Wolf Minerals Limited (ASX:WLF,AIM:WLFE) announced that it has executed a binding term sheet with Resource Capital Fund VI L.P. to provide a standby equity facility to strengthen the Company’s balance sheet during the ramp-up of the processing plant at the Drakelands open pit mine.

 

As quoted in the press release:

 

The terms of the standby equity facility provide that RCF VI, an associate of current major shareholder Resource Capital Fund V L.P. (“RCF V”), will subscribe for a maximum amount of £25 million (approximately A$51 million) at 9.19p (approximately A$0.19) per share (“Issue Price”), an approximate 13% premium to the share price as at close on 28 January 2016 on the ASX (the “Facility”).

 

The Facility enables the Company to request RCF VI to subscribe for fully paid, ordinary shares at the Issue Price at any time during the six month period following establishment. Drawdowns from the Facility will be used to support operations at Drakelands and facilitate the Company’s debt repayments.

 

Wolf MInerals Managing Director, Russell Clark, stated:

 

The Company welcomes the high-value support from RCF VI. The offer to subscribe for shares at a premium to the current share price indicates its confidence in the project and positive view on the long-term tungsten market dynamics. The establishment of the Facility will enable the Company to focus on ramping-up the processing plant at Drakelands at a time when the tungsten price has fallen almost 50% since construction of the plant commenced in March 2014.

 

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