Wolf Minerals: The First UK Mine in 45 Years

About the company

Wolf Minerals Ltd is an ASX (WLF) and AIM (WLFE) listed specialty-metals company currently developing the Hemerdon Tungsten and Tin Project (“the Project”), a tungsten mine in Devon, Southwest United Kingdom.  The company commenced construction in February 2014 and is on schedule and fully-funded to begin production in the September quarter of 2015. The development is the first new metal mine in the United Kingdom in more than 40 years and currently the only fully-funded tungsten project in development globally.

When complete, the Project will produce approximately 5,000 tonnes of tungsten concentrate and 1,000 tonnes of tin concentrate per annum. In March 2015, the company announced a 34% increase to its proved and probable ore reserve to 35.7 million tonnes through steeper pit walls, effectively extending the 10-year mine life by a further three years. Wolf Minerals’ Hemerdon Tungsten and Tin Project is the third largest in the world and will provide at least 300 direct and indirect jobs throughout the life of the mine.

About the investment

Resource Capital Funds (“RCF”) originally invested A$2M as part of a A$4M equity raising in 2009 aimed at completing a pre-feasibility study on the Project. RCF continued to support the Company investing equity both on and off-market through to August 2011, when Wolf Minerals accepted an offer from RCF for a US$6.3 million 12-month secured development capital facility to enable the company to commence initial project development activities at the Project. In 2012, RCF provided a US$82 million development funding package to the company comprised of a US$75 million, 12 month secured Bridge Finance Facility and the purchase of a 2% gross revenue royalty for US$7 million.

This funding package allowed Wolf Minerals to continue the development of the Project without waiting for public equity market support, ensuring critical path activities were not delayed including essential permitting and approvals. It was structured with interaction from Wolf’s management team to provide the Company with a 12-month window to raise the required equity for the Project at a more acceptable share price.

In early 2014, Wolf successfully completed the main equity raising for the Project. The fundraising was done in a better price environment than otherwise would have been the case without RCF support. RCF’s participation in the raise totaled approximately A$75 million, funding from which was used to retire the bridge. RCF now hold approximately 40% of Wolf Minerals. RCF Principal Chris Corbett maintains a non-executive director role bringing experience in mining, corporate business development and investment management to the Board.

Flexible funding options

RCF is able to employ a range of investment styles and works with management teams to structure transactions that reflect the risks and opportunities associated with each company. The funding package provided to Wolf Minerals has provided the flexibility and resources needed to complete the construction phase of the Project in a timely manner.