Woulfe Mining Corp WFEMF

These things happen frequently around here ...

[74volfram]

At least after major milestones.  In January it was the AMC feasibility release (we saw the news release but we never saw the full study).  Now the unexpected final feasibility based on the TT study.  which is quite compelling and I would have thought finally sufficient to get the project financed and on its way.  and just as timely, here comes the new merger agreement.

Merger exchange rate is set at 0.1029 AII shares for each WOF share. so if AII SP goes up, so does WOF. The previous Almonty-Dundee transaction in June was at 0.1 AII share per WOF share.  So we are getting a 3% better deal than  Dundee got last month.  in terms of relative valuation, the exchange rate is close to the deal we were offered in January (40.2% vs. a bracket 41% to 48%; and 0.1029 vs. a bracket 0.0942 to 0.123).  I would have thought the two companies were fairly close to even value now. but I guess Almonty figures they have already paid good cash in June, so they are staying on the mid to low end of the January ranges.

I think the merger is necessary in this environment. I looked at the feasibility report numbers again. These guys have done great things with the mine planning.  Even so, the price of tungsten is so low now that only fully costed low OPEX operating mines are viable.  to give an example, the NPV of Sangdong is still a respectable 90M at 12000 USD WO3 price, but drops to 10M at 10000 USD WO3 prices.  With China spiraling down a nasty stock market crash, most minor metals are virtually frozen.  This will stop soon enough I am sure, but the latest tungsten quoted range in today's Asian Metals is now 10,000 - 11,000 USD.

Potential for share price appreciation.  I think in this environment  the A&W combination will appreciate faster than the individual companies would.  Five years ago Woulfe would have moved up faster due to blue sky potential.  These days the successful low cost producers will be the first ones to benefit from the eventual upswing.  And if they also have a great new property in development the combination is highly positive.