![Funding talks went stale]()
Funding talks went stale
SÃO PAULO (Metal-Pages) 27-Feb-13. Woulfe Mining says production at the Sandong tungsten-molybdenum project in South Korea is not now expected to start until mid-2014. It follows the resignations of President and CEO Brian Wesson and Business Administration Vice President Amelia Wesson from the Vancouver-based company on Wednesday.
The Wessons had been working on a deal to close $151 million worth of financing on the mine for the past year, though as talks dragged on they reached an impasse.
Woulfe Chairman David Constable was keen to praise their work in the past three years, but told Metal-Pages:
"In order to close the thing in a timely manner, we were going to have to change the faces sitting across the table."
Separate finance and offtake talks with IMC and loan discussions and Shinhan Bank are expected to raise around $200 million to cover contingencies, including higher mining industry costs.
Constable, who expects financing to be concluded in April or May, says the company may appoint an interim CEO with experience in dealing with the financial aspects of the business for a few months. A permanent successor, whose key strength is project development will then be chosen, though IMC is not expected to play a part in selecting candidates for either role.
Production was previously scheduled to go ahead in the first quarter of 2013, but having seen talks drag on without a conclusion, Constable is now looking at 2014 as a being more realistic.
"We are probably looking at production mid-next year, that's probably the best we can do," he said.
With mining and blasting ready to start, milling of existing stockpiles could take place if executives wanted to the spend the money, but they prefer to wait for an APT plant to built, once financing is concluded.
Constable would have been happy to see tungsten APT prices rise in Europe by 45/mtu to $350-356/mtu in the past two weeks, amid renewed interest as buyers restock. Operating costs at Sandong run to $200/mtu.
The expected mine life at Sandong currently spans 11.5 years, though this may extended to 30-40 years as drilling goes deeper into flooded areas of the mine, engineers calculate.
Woulfe and IMC last year last year agreed to establish a Korean joint venture company owned 45% by Woulfe and 55% by IMC.
The APT joint venture has agreed to acquire no less than 90%, and up to 100%, of Sangdong’s tungsten concentrate production in an off-take agreement guaranteed by IMC.
IMC has agreed to acquire between 90-100%, of the joint venture’s production under a separate off-take deal.
-By John Evans in São Paulo (john@metal-pages.com)