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Wolf Minerals on track at Drakelands project

Wolf Minerals is on track to deliver first production to customers in September 2015, the tungsten miner said...

Wolf Minerals on track at Drakelands project

Wolf Minerals (LON:WLFE) is on track to deliver first production to customers in September 2015, the tungsten miner said, as it updated on progress in the June quarter at its Drakelands open pit mine in Devon.

Last month, the firm smashed through a key milestone - as it said first ore had been put through the processing plant.

Russell Clark, the managing director, said today: "Commissioning of the processing plant is continuing and the flow sheet is working as envisaged. We are now working with GR Engineering towards the "Performance Test" in August, ahead of the plant being handed across to Wolf."

Clark added: "The infrastructure surrounding the processing plant has also been completed on schedule, including the laboratory, the administration building, water dams and the mine waste facility - all necessary to allow commissioning to be undertaken."

As at the end of June, a total of £60 million of the £75 million senior debt finance facilities had been drawn to fund the construction.

Clark added: "As we transition into production, we have broadened our management capability, having hired an experienced business development professional, Ms Emma Hall.

"Emma will focus on managing arrangements with existing offtake partners and maximising the value of our production streams. In addition we will continue to assess merger and acquisition opportunities in the specialty metals sector, with a view to Wolf expanding beyond a single asset company."

He added: "As we look to the next quarter, our focus will be on delivering first product to customers in September, and ramping up the plant to full production by early 2016. We are working through a six month trial of seven day a week operations, and we will be seeking to formalise this arrangement permanently by the year's end."

The average ammonium paratungstate (APT) tungsten price published by Metal Bulletin for the quarter was US$242/mtu, which was a 14% reduction from the average price for the previous quarter, and some $118/mtu (metric ton unit) lower than when construction of the Wolf project started in March last year, the firm noted.

City broker Numis said "everything was coming together for the final push" but that the only thing not playing ball was the tungsten price.

"However, demand remains sound in Japan and Europe, driven by steady output from the auto sector, and with some supply withdrawn from the market," it noted.

Numis rates the shares 'add' and targets 23p.

Shares eased today 0.79% to stand at 15.625p.

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