IN efforts to support development of its major UK-based Hemerdon tungsten mine, Perth company Wolf Minerals has signed a non-binding heads of agreement for tungsten offtake and a loan facility with two companies.
The offtake agreements, with Austrian company Wolfram Bergbau und Hutten (WBH) and US-based Global Tungsten and Powers (GTP), cover 80 per cent of the Hemerdon mine’s expected annual tungsten concentrate output for a minimum of five years.
Hemerdon is expected to produce an average of 345,000 metric tonne units of tungsten trioxide in concentrate per annum, as well as 450t of tin, starting in 2015. In addition to the recently
announced debt facility of £55 million, WBH and GTP will provide Wolf with a £20 million loan facility, which will form part of the project funding package.
Hemerdon – which was mined for Tungsten during World War I up to the end of World War II for armament production — will cost around £120 million to build, and is expected to secure supplies to the UK and the wider European Union.
Wolf expects to complete the final documentation for the offtake agreements in the second quarter 2012.
“The signing of a long term offtake contract with two of the largest tungsten producers represents a significant milestone in the development of the Hemerdon tungsten mine,” Wolf chief executive officer Humphrey Hale said. Tungsten has been classified a ‘critical mineral’ by the UK, the US and Europe after China – which mines about 85 per cent of worldwide tungsten supply – tightened controls on its tungsten exports.
By Reuben Adams