is a virtue : ) below is an interview with BW yesterday GLTA
Woulfe Mining is one of only a handful of new tungsten producers coming on-stream in the next year or so, and expects to begin commissioning in the second half of 2013 – with first production shortly after. It is doing all this in South Korea, at the Sangdong tungsten-molybdenum project in the southern part of the country. “We looked around the world and we thought South Korea was a very safe destination to take peoples’ investments,” ceo and president Brian Wesson told Metal Bulletin. “It’s AAA Moody’s rated, it’s easy to raise finance because it’s a developed country, there are no royalties on minerals, and there’s no export tax,” he added. The country is also welcoming to foreign investors, according to Wesson, with a strong legal system and a supportive government. “We’ve heard a lot of talk about going into Africa and how good it is, but for every one person who makes money there, four people lose money,” Wesson said. “Mainly, though, it came down to the asset. For 40 years, it was the biggest tungsten-producing mine in the world,” he added. In the late 1980s, China emerged in the sector and suddenly the market was swamped with cheap material. As a result, Sangdong closed in 1992, and was not acquired by Woulfe until 2006.
The company then carried out an extensive feasibility study, concluding in April 2012.
The tungsten project has a mine rate of about 1.2 million tpy of ore per year, Wesson said, and a net present value of $535 million. “The internal rate of return is 65.5%. We’ve done our feasibility study and we’ve brought in a strategic partner, which is the International Metalworking Co [IMC],” he said. “This is a Berkshire Hathaway company, which is owned by Warren Buffett. They’re supplying $70 million. We’re also talking to Shinhan Bank in Korea, which could provide $150 million in debt,” he added. The next step, Wesson said, is to complete the due diligence required to proceed, after which financing agreements will be finalised. “Once that’s done, we can start building.
That’s what our market is waiting for.
In the last three years, our market cap has gone from $8 million to $127 million,” he said.
“We need $131.5 million in capex and then we can look to start in March next year, which will allow us to be in production by the end of 2013,” Wesson added. The company is then expecting to produce about 4,000 tpy of, as well as about 1 million lb of molybdenum. Woulfe is also planning to build its own refinery in South Korea to convert concentrates to ammonium paratungstate, with technology supplied by IMC, in exchange for a 55% stake in the plant. “I’m not really concerned by the illiquid market. If you look at it, that’s why we did a strategic deal,” Wesson said. “IMC have been buying product from all over the place. Now, all our production will go straight to them at the spot price. Tungsten is rarer than any other metal because it’s needed so widely.”