Mason Res Corp MSSNF

Tungsten mine hangs in balance as Woulfe faces cash crunch

[laurant]

TORONTO (miningweekly.com) – Woulfe Mining, which is advancing the development of the Sangdong tungsten mine, in South Korea, late last week said it was facing a cash crunch following a company-wide investigation after the resignation of the former executive management team in February. ( THAT WOULD BE BRIAN WESSON )

The board and acting CEO Hubert Marleau initiated a comprehensive investigation into the company and its subsidiaries to ensure business continuity. The investigation had identified issues relating to liquidity and the ability of the company and its subsidiaries, including Sangdong Mining, to meet various payables beyond the next few months.

Woulfe said its board and interim CEO recognised the seriousness of these issues, including the potential impact on its ability to advance the Sangdong project “in the manner and timing anticipated”.

The company said it had started an internal review to further preserve cash, reduce costs and enhance corporate efficiencies.

Woulfe said it was in negotiations with various parties to provide a short-term financing solution to meet its obligations and to provide funds to advance the flagship project, although there was no guarantee that such financing might be available.

Meanwhile, the current board review also investigated, with the assistance of Dundee, the technical aspects of the Sangdong project and identified “considerable” additional testwork that was needed to bring the project to commercial preparedness, which was deemed to require more funding to complete. ( Brian Wesson feasibility study )

Meanwhile, all staff and employees remained on site at Sangdong, planning further technical work and assessment.

Woulfe’s announcement late on Friday sent its TSX-V-listed shares plunging by more than 35% on Tuesday, to trade at C$0.13 apiece in the afternoon.