VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec. 17, 2014) - Woulfe Mining Corp. ("Woulfe" or the "Company") (CSE:WOF)(FRANKFURT:OZ4) is providing a shareholder update on the Sangdong tungsten project, in the Republic of Korea.
(1) Results of the latest financial model update are:
| Phase 1* Mining Plan Options for -1 to Taebaek Levels |
| (Using 65% WO3 Concentrate Price of $US 15,000 per tonne) |
| |
| Annual Mill Feed Production Rate |
633,000 TPY |
792,000 TPY |
| Annual Revenue WO3 Concentrate** |
$US 46.6 million |
$US 58.3 million |
| EBITDA - Annual |
$US 23.6 million |
$US 30.1 million |
| EBITDA/ Share |
$CDN 0.075 |
$CDN 0.095 |
| Pre-tax IRR |
36% |
39% |
| NPV @ 8% Discount Rate |
$US 114 million |
$US 121 million |
| All figures above are 75% of total project values and attributable to Woulfe after the transaction with IMC. |
| Reserves Included in Phase 1 |
6.4 million tonnes grading 0.49% WO3 |
| Annual Production Rate |
633,000 tonnes |
792,000 tonnes |
| WO3 Processing Plant Recovery Rate |
85% |
85% |
| Annual WO3 Concentrate Production |
4,139 tonnes |
5,178 tonnes |
| Pre-Production Capital Expenditures |
$US73.4 million*** |
$US78.4 million*** |
| Mine Life |
10 years |
8 years |
| |
| * 3 levels out of 20 levels in Phase 1. |
| ** No Apt downstream minority revenue participation should have been included since February 2012. |
| ***Capex using all new equipment, including processing equipment from China and includes a 15% Contingency. |
The financial analysis uses part of the 2012 TetraTech reserves.
Woulfe Mining Corp. received the TetraTech Inc. Feasibility Study for the Sangdong Project in mid-2012. Review of the TetraTech study in 2013 by significant shareholder, Dundee Corporation, has been followed, starting in May 2014, by de-risking critical elements of the project involving:
- Additional 7,200 metres of Definition Drilling & 470 geotechnically logged holes.
- Phase 1 Mining detailed resource model by AMC Consultants Pty. Ltd. -- September 2014.
- Highly detailed mining plan using targeted and selective mining methods -- November 2014.
- Substantially reduced capital expenditures from $US151 million to $US73.4 million and $US78.4 million, for the 633,000 and 792,000 tonnes per year options, respectively, in processing plant and mining development.
Update
Phase 4 and 5 drilling programs totalling approximately 7,200 metres of diamond drilling increased the mineral resources confidence. This infill drilling was on 20 metres centres instead of on the previous 40 metre centres.
The TetraTech calculated Probable Reserve of 13.3 million tonnes at a grade of 0.425 % WO3 was for the entire deposit (for all 20 levels). In addition TetraTech included Inferred Resources in the HW Zone of 23.1 million tonnes at a grade of 0.66% WO3. A new NI 43-101 compliant resource block model and resource estimate for a section of the deposit above -3 level, was prepared to Feasibility Study accuracy for purposes of NI 43-101 by AMC Mining Consultants Pty. Ltd. of Australia ("AMC"). This was completed during the 3rd Quarter of 2014 and included Phases 4 and 5 drilling results. AMC's resource estimate included 3.81 million tonnes at a grade of 0.56% WO3 Measured and Indicated Resources & Inferred Resources in the HW Zone of 7.93 million tonnes at a grade of 0.68% WO3 (using a 0.40% WO3 cutoff grade).
During October, 2014, Woulfe commenced drilling the HW Zone above -1 level in a Phase 6 drilling program. The drilling by Woulfe so far has outlined Indicated Resources of 419,000 tonnes at a grade of 0.95% WO3 (using a 0.35% WO3 cutoff grade) undiluted, representing 6% of the total volume associated with the Inferred Resources above -3 level. The drill tested contained metal content therefore is substantially higher than predicted. Drilling continues with the aim of converting a further 3 million tonnes of Inferred Resources, above -3 level, to the Indicated Resources category, by early 2015.
Rock mechanics and stope design analysis data was substantially increased by undertaking oriented core drilling and increasing geotechnical logging of drill holes. Turner Mining and Geotechnical Pty. Ltd. of Australia, retained originally by TetraTech, completed the rock mechanics analysis to Feasibility Study accuracy for purposes of NI 43-101. Rock mass data from less than 30 drillholes was increased to data from over 500 drillholes and included in excess of 40,000 measurements.
The TetraTech high volume bulk mining method was necessarily reviewed. Based on the AMC resource model, the mining method was fundamentally changed to adapt to the variable nature of the mineralization envelopes. The new mining model and associated operating costs estimated to Feasibility Study accuracy, for purposes of NI 43-101, were completed by Services Miniers PRB Inc. of Val d'Or, Canada ("PRB") and A-Z Mining Professionals Limited of Thunder Bay, Canada.
The TetraTech processing plant flowsheet included the key use of a Chinese proprietary collector, of unknown composition, and whose supply would not be guaranteed. To eliminate this concern, an alternative collector was tested and found to provide better results than the Chinese product. Commissioned by Woulfe, this work was supervised by Mr. Rod Elvish, metallurgist, of Australia, who had previously been retained by TetraTech for Feasibility Study metallurgical testwork and process flowsheet design. The reduced mining rate and de-risking of capital expenditures indicated a significantly smaller (50%) processing plant would be optimal. Bumigeme Inc. of Montreal, Canada has just completed a Preliminary Economic Assessment accuracy design and cost estimates on the processing plant, based on the Chinese 20 tonne pilot plant test flowsheet. Woulfe also revisited the use of gravity separation to reduce the mill feed portion sent to flotation. Testwork just completed at SGS Lakefield in Canada confirmed the use of flotation on all mill feed for WO3 recovery. The processing plant flowsheet is similar to that proposed by TetraTech, using flotation to produce a 65% WO3 concentrate.
Environmental studies and approvals have been completed. Permits required for the present state of project advancement have been awarded.
Combining the AMC updated resource estimate and the mining study by PRB identifies reserves of approximately 6.4 million tonnes at a grade of 0.49% WO3. An updated project financial model including the reserves and potentially mineable resources was developed to ensure project viability continues.
An updated Feasibility Study will be completed by Woulfe's consultants during the 1st Quarter of 2015. The main outstanding components requiring completion to the amended NI 43-101 Feasibility Study accuracy are:
- Processing plant engineering and cost estimates
- A detailed Hydrogeology study
The Feasibility Study team consists of:
| A-Z Mining Professionals Limited |
Study management, financial analysis & report preparation |
| AMC Consultants Pty. Ltd. |
Geology and resources |
| Rod Elvish |
Metallurgy |
| Services Miniers PRB Ltd. |
Mining |
| Turner Mining & Geotechnical Pty. Ltd. |
Geotechnical |
| Bumigeme Inc. |
Processing |
The completed Feasibility Study will, based on a positive study, be followed immediately by project financing and construction.
Malcolm Buck, P. Eng. of A-Z Mining Professionals Limited, a "Qualified Person" under National Instrument 43-101, supervised preparation of the information that forms the basis of the written disclosure in this news release.
(2) The IMC $US 10 million loan, due December 15, 2014, has been extended to September 15, 2015, on the condition that the minority interest of Woulfe in a downstream APT operation be cancelled. There was no assurance of a revenue stream to Woulfe as a minority participant and 100% leveraged participant in this operation.
On Behalf of the Board of Directors
Woulfe Mining Corp.
Michel Gaucher, CEO and Director
About Woulfe Mining Corp.
Woulfe Mining Corp., through its wholly-owned subsidiary, Sangdong Mining Corporation, is dedicated to developing the Sangdong tungsten-molybdenum mine which was historically one of the largest tungsten mines in the world and one of the few long-life, high-grade tungsten deposits located outside of China. Woulfe Mining Corp. is listed on the Canadian Stock Exchange.
This Press Release contains certain information that may constitute "forward-looking information" under applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements about strategic plans, including future operations, future work programs, capital expenditures, discovery and production of minerals, metal prices and currency exchange rates, timing of geological reports and corporate and technical objectives. Forward-looking information is necessarily based upon a number of assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information, including the risks inherent to the mining industry, adverse economic and market developments and the risks identified in Woulfe Mining Corp.'s annual information form under the heading "Risk Factors". There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. All forward-looking information contained in this press release is given as of the date hereof and is based upon the opinions and estimates of management and information available to management as at the date hereof. Woulfe Mining Corp. disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.