Transcription of Finance News Network Interview with Wolf Minerals Limited (ASX:WLF, AIM:WLFE) CEO and Managing Director, Russell ClarkLelde Smits: Hello I’m Lelde Smits for the Finance News Network and joining me from metals developer, Wolf Minerals Limited (ASX:WLF, AIM:WLFE) is its CEO and Managing Director, Russell Clark. Russell welcome back to FNN.
Russell Clark: Hi Lelde.
Lelde Smits: Wolf Minerals started construction of your flagship Hemerdon tungsten and tin project in the UK, in February this year. What has occurred since?
Russell Clark: We’ve been very busy. I guess the primary thing that we’ve achieved is the equity raise, where we raised just under 100 million pounds. And that’s provided us the funding to build the project and get it through to first positive cash flow, which will be in 2016. Lot of activity happening on the site, lot of earthmoving, the processing plant site has now been levelled off and we’ve poured the first concrete. We will see steel starting to be erected in the next couple of months. And on the mine site, we had to demolish the old processing plant from the Second World War, that’s just about completed. The haul road has been built and they’re getting ready to start the construction of the mine itself.
Lelde Smits: You’re targeting production at Hemerdon by the third quarter of next year. How are you tracking?
Russell Clark: We’re on track, we had a good start in February, the English summer surprisingly has been very warm and sunny and we’ve been getting very good progress. The first concrete pour was actually about a month earlier than we had originally anticipated. So I think we’re on track as far as the plant goes and looking to have the plant built by the - sort of beginning of the second quarter next year. And first delivery of concentrate planned for the third quarter of next year.
Lelde Smits: What progress have you made with the processing plant and mine waste facility and how are they taking form at the moment?
Russell Clark: The mine waste facility needs to be constructed by January of next year. It’s on track, we’ve cleared the topsoil off, we’ve had to form a number of catchment dams to catch water that may run off in the event of a rainstorm. That’s all happening, it’s in place, the processing plant as I said has been levelled off, the primary foundations for the big bins have been poured. The engineering company is very happy with the English contractors it’s getting. We’ve got a lot of the equipment already arriving on the site and being stored there, and no long lead time items that are going to cause us any dramas. So on track, lots of people involved, not having any problem hiring people, there’s a lot of interest about this project and a lot of excitement in the local area.
Lelde Smits: What else is happening at the site?
Russell Clark: Well we’ve got to get this project up and built on time and on budget, that’s forefront in our minds. But we’re also looking to see how we can enhance this project. We’ve approved the 350,000 pound drilling program to drill holes around the perimeter of the pit, which we hope will allow us to steepen up the walls and deepen the pit which will add reserves, potentially another three or four years of life. And also enquiring as to see whether or not we can work on Sundays, currently under the planning permission that we’ve got, we have to close on a Sunday. And if we can get the ability to work on a Sunday, it has the potential to increase our production by 15 to 20 per cent. So that’s a way of optimising this project and again, we could do that without interfering with the build.
Lelde Smits: Wolf Minerals raised about $185 million for Hemerdon in March. Where exactly have the funds been deployed?
Russell Clark: Primarily the funds are going into the capital costs of the project, the building, the concrete, the steel, the equipment and the formation of the mine site, and the waste dump and the haul roads. Some of that money has been put aside in cost overrun facilities and other facilities that we were required to put in place by the banks, and which we’re not planning on touching. But we’re funded through the positive cash flow, we’re in a very good state financially and I have no expectation of us having to come back to the market, ahead of production being met.
Lelde Smits: Wolf Minerals does describe the Hemerdon project as containing the third largest global resource of tungsten. What is your view of the supply demand situation at the moment?
Russell Clark: Our view has always been that the supply of tungsten is going to get tight going forward, as demand for tungsten continues to rise with global growth. And really that view hasn’t changed. We’re seeing growth rates in the tungsten side or demand side of four or five per cent, or 4,000 or 5,000 tonnes per year. And our project will produce around 3,500 tonnes in approximately one year of growth.
And really there are no projects coming on-stream behind us for another three or four years. And the forecasters, the people who know these things or profess to know these things, are forecasting a continuing rise in tungsten price to maybe from the current levels of $3.80, to maybe $4.80 by the middle to end of next year. And this project is very leveraged to the tungsten price.
Lelde Smits: Finally Russell, what are Wolf Minerals’ immediate priorities and the timeline you’ve set to reaching them?
Russell Clark: The key priority naturally is to get this project built on time and on budget, and we’re on track to do that. As I said, we’re looking to enhance and optimise the performance of this project by increasing the reserves where we can, and seeing if we can’t get seven day a week operations. So we’ll be working on all of those things over the course of the next 12 months and I think if we can deliver on time and on budget, it will just be another feather in our cap for a project that many people just haven’t believed the milestones that would be met, that have been met.
Lelde Smits: Russell Clark, thank you so much for the update from Wolf Minerals.
Russell Clark: Thanks Lelde.
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