Woulfe Mining Corp WFEMF

state of the mine at year's end

[74volfram]

- Resource assessments:
First assessment after the drilling program (October 15 2014) indicates 21300 tons of metal based on the 0.40% cutoff.
December 17 update indicates 31000 tons of metal (Phase 1 Mining Plan and financial model)
Second update (December 18 2014) indicates additional 2700 tons in "well–defined resource" at the Hanging Wall  (not included in the Phase 1 Mining Plan).

- What to expect next:
Altogether the two updates indicate a 50% increase of mine reserves over the first assessment. The trend is in the right direction.
Given the good agreement of modeled vs. actual results for the latest HW drillings, there is the reasonable chance that a large part of the inferred HW resources will eventually (soon?) be moved to the "measured or indicated", commercially meaningful category.  This would more than double today's reserves.  

- HW caveat:
HW was never mined in the past for a reason.  It is the mineralized zone closest to the surface, with weak geology.  HW is also not uniform or as well defined as the other zones.  At the beginning of Woulfe, extraction from HW was going to be the main focus of the new mine. A series of HW drillings produced mixed results and the plan was abandoned in favor of low-cutoff mining of the other three zones above water level.  In contrast, the new HW drillings seem to have had much better success.  Now that they are putting extraction from HW back in play (would this be a "Phase 2" mining plan?), I will be very interested to know how in actuality they are going work it out.

- Mining Plan:
Phase 1 Mining Plan seems reasonable and low-cost, compatible with tungsten prices at or below current levels. Abandoning the APT JV was in my opinion a positive development for Woulfe.

- IMC loan/share deal:
IMC loan/share deal should put a floor on future valuation of the company (35M for 25% = 30-35c SP depending on potential further dilutions and conversion of options).  30c is also the exercise cost of the highest-priced options (held by Korea Zinc and Dundee).  So I expect that to be the SP at closing of IMC deal - to take place before the 30c option expiration date (August 2015).

- Off-take agreement:
It would be very interesting to know the terms of the IMC off-take agreement.  Specifically if it is at market price or at discount, and what are the yearly requirements.  The December 17 update used $15,000 per ton (November market price) for the financial analysis.

- Cash at hand:
Should be very low. I expect more shares for pay this month, and as a complete guess, a 6-month $2M loan in January instead of the anticipated $4M PP for the full year.

- Idle speculation:
Financials in the December 17 update show the NPV for 75% of company - that is after the IMC transaction. This is the first time the dilution is explicitly mentioned in the financial projections. Idly speculating here it is some indication the IMC transaction may be about to happen.