THE BOURSE WHISPERER: Specialty metal exploration and development company Wolf Minerals (ASX: WLF) (AIM: WLFE) has received an updated and increased credit approval from UniCredit Bank AG (UniCredit Corporate & Investment Banking), ING Bank N.V. and Caterpillar Financial SARL.

The amount of credit that has been approved is for £75 million ($115 million) in senior debt finance facilities to fund the commercial development of the company’s Hemerdon tungsten and tin project in Devon, in Southwest England.

Wolf said the continuing support of the three globally recognised leaders in mining project finance was a major milestone for the company in that it signals a strong endorsement of the confidence in the technical and financial strength of the Hemerdon project.

“This revised and increased senior debt package demonstrates the strength of the projected future cash flows to be generated by this world class, low cost tungsten and tin project and we look forward to finalising the funding package to bring this project into production,” Wolf Minerals managing director Humphrey Hale said in the company’s announcement to the Australian Securities Exchange.

Provision of the £75 million ($115 million) senior debt facilities is now subject to completion of the project finance documentation and all the usual conditions for a financing of this nature.

The financing is structured in such a way that a portion of the senior loan facilities will be supported by a guarantee provided by the German government’s Untied Loan Guarantee Scheme (Ungebundener Finanzkredit) and a loan guarantee under similar terms by the offtakers, Wolfram Bergbau und Hütten AG and Global Tungsten & Powders Corp.

Together, these guarantees will cover 50 per centof the senior loan facility and are subject to final approval of the guarantors, due diligence and documentation.

Wolf indicated the funding will be put towards the planned construction of the project, based on a Definitive Feasibility Study completed in May 2011.

This study confirmed the robust economic viability of the project and estimated a post-tax, ungeared net present value of £74 million ($114 million).

THE BOURSE WHISPERER: Cortona Resources (ASX: CRC) and Unity Mining (ASX: UML) have entered into a binding loan agreement.

The agreement will result in Unity loaning up to $1 million to Cortona to accelerate pre-development activities at the Dargues Reef gold project, aimed at delivering cost and time benefits to the development of the project.

Preliminary work has identified a range of tasks that may deliver positive outcomes to the development of the Dargues Reef gold project,” Cortona Resources said in its ASX announcement.

“Whilst Cortona and Unity will ultimately need to agree on the specific tasks, and the amount of funding allocated to such tasks, prior to Cortona drawing down on the Loan.”

Such tasks are likely to include:

–    Detailed engineering studies to evaluate whether elements of Unity’s Kangaroo Flat processing facility can be utilised, dismantled and transported to Dargues Reef in order to deliver cost and time savings;

–    A detailed survey of the proposed plant and infrastructure layout at Dargues Reef in preparation for the commencement of site works;

–    Mobilisation of earthmoving plant to Dargues Reef in preparation for earthworks, which is expected to require one month’s notice;

–    Relocating one or more of the Kangaroo Flat office buildings to Dargues Reef in preparation for the commencement of site works; and

–    Such other matters as may be agreed with Unity.

Cortona said the loan agreement reflects a bi-partisan view that prompt gold production at Dargues Reef is an important step towards creating a gold producing company.

The key terms of the Loan include:

–    Loan Amount: Up to $1 million, in staged drawdowns for uses pre-approved by Cortona and Unity;

–    Interest Rate: 10% p.a. payable quarterly in arrears;

–    Maturity Date: 12 months from the first drawdown date, with no penalty for early repayment;

–    Security: Any amounts drawn down under the loan are unsecured, unless the Scheme Implementation Agreement is terminated in which case the loan is to become secured by a first-ranking security over Cortona’s freehold land in New South Wales, Australia.

THE BOURSE WHISPERER: Poseidon Nickel (ASX: POS) has received the nod of conditional approval from Western Australia Premier Colin Barnett to recommence nickel mining at the Mt Windarra site in the North Eastern Goldfields of Western Australia.

The application included all of the necessary environmental and infrastructure approvals, which Poseidon indicated have been assessed by the Department of State Development and other agencies over the last few months.

The company’s proposal for the recommencement of nickel mining and processing operations at the Mt Windarra site includes:

–    Recommencement of nickel mining at the Mt Windarra underground mine;

–    Commencement of nickel mining at the new Cerberus ore body located on the same tenement package;

–    Construction of a nickel flotation concentrator plant capable of a minimum throughput of 700,000 tonnes of ore per annum;

–    Construction of a gold tailings re-treatment facility; and

–    Installation of in-pit tailings deposition via a slurry pipeline to South Windarra.

The Windarra nickel project is located on tenements managed under the Poseidon Nickel Agreement of 1971, which requires that in addition to the normal statutory approvals, Poseidon is to supply reasonable evidence of its marketing (offtake) and project financing necessary for the fulfilment of its proposals.

The final formal approval is subject to Poseidon demonstrating it has project financing and offtake contracts in place.

Premier Barnett, in his role as Minister for State Development, has given Poseidon until 30 June 2013 to meet these financing and offtake commitments.

Under a Deed of Covenant associated with the Agreement, Poseidon was also required to submit a revised Mine Closure Plan to DSD.

This has been submitted, as required, and approved in similar terms to the mining proposal.

“This is an enormously important and successful outcome for Poseidon as it essentially gives statutory approval for the project subject only to final financing and offtake,” Poseidon Nickel managing director and chief executive officer David Singleton said in the company’s announcement to the Australian Securities Exchange.

“This announcement clears the environmental and construction approval risk for the project prior to financing, and as a result we maintain an expectation of nickel mining restarting in this area of the Goldfields.

“We recently announced the completion of the Definitive Feasibility Study for the project and as announced previously are continuing our preparations for financing the project.”

Poseidon Nickel described the Windarra project as a higher-grade nickel sulphide deposit that has demonstrated high recovery levels through a standard nickel floatation concentrator.

The total current Mineral Resource is located at two positions approximately 10 kilometres apart and includes the existing brownfields mine at Mt Windarra and a new discovery at Cerberus.

Poseidon has completed a Definitive Feasibility Study (DFS) and is targeting initial concentrate production in 2014.

The concentrator plant to be constructed at Mt Windarra is expected to have a minimum throughput capacity of 700,000 tonnes of ore per annum.

THE BOURSE WHISPERER: Following the announcement of further delays to the development of the Oakajee Port at Geraldton in Western Australia, Padbury Mining (ASX: PDY) confirmed its commitment to the project.

Padbury Mining managing director Gary Stokes said he had been working with a number of mining companies in the region to bring this project to fruition.

He indicated Padbury was working to this end through the use of intellectual property it acquired from Yilgarn Infrastructure, the developer of the original Chinese backed bid for the development.

The intellectual property is held by Padbury’s fully owned subsidiary Midwest Infrastructure (MWI) and is essentially held in escrow to be moved to a new company (NEWCO) which would ultimately own the project.

Stokes said that despite contrary views, Padbury has done a lot of work on updating the original financial modelling undertaken by Yilgarn and in more recent times has been engaged in discussions regarding the port and rail design.

“Oakajee is critical for the future of the Midwest and in particular for the mining companies in the region who have a combined JORC compliant source of some 13 billion tonnes and a regional potential of some 50 billion tonnes or predominantly magnetite ore,” Stokes said in Padbury Mining’s announcement to the Australian Securities Exchange.

“The critical element is the port and MWI has been working closely with its financial and legal advisers developing a structure for NEWCO which could have 51 per cent Australian equity with Board control and the remaining equity being provided through Chinese multi-company equity and from other participants who may want to play a role.”

Padbury said it was adamant the development of Oakajee has strategic significance for the region and its structuring of NEWCO is designed to comply with FIRB and other requirements that may arise in the strategically sensitive Mid West region.

“There is no doubt that the Mid West rail and private user infrastructure cannot be developed and / or financed without the participation of Chinese customers and their banks,” Stokes said.

“Investment in the Mid West region is dominated by Chinese companies and a regional infrastructure financial model and a modular approach to both the private user infrastructure and rail system linking clusters if foremost in our thinking to date.

“A regional solution is required in which both North (Weld Range) and South (Karara) hubs are developed concurrently through economic necessity, with the North being driven by hematite initially and the South by magnetite, predominantly by Gindalbie.”

Padbury said it has held discussions with a number of large infrastructure specialists as it is firmly of the view the Oakajee project requires a significant balance sheet to support its development and with the backing of long term investors such as pension funds.

Stokes said that whilst the recent decision by Mitsubishi to put OPR on hold was disappointing he was keen to point out that MWI would continue to pursue the Oakajee port and rail development and would make its intellectual property available to participants willing to bring this project to fruition.

“We have been waiting for three years and we cannot wait any longer,” he said.

“A group of miners who want to see Oakajee developed as soon as possible has been formed and is working together towards that end.

“Without a port and rail, the Mid West will not become the economic driver for the State that it should and with the support of China it is possible to make this work but the critical thing is that we all have to work together, none of us can make it work on our own.”

THE BOURSE WHISPERER: The market capitalisation of Western Australian ASX-listed companies continued their upward trajectory during October according to Deloitte.

Deloitte’s WA Index increased 1.8 per cent during the month to close at $145.38 billion.

Given all the bad iron ore news filtering around the sector it is something of a surprise to see iron ore producers leading the pack.

Deloitte indicated the reason for this is the seemingly insatiable Chinese appetite for the commodity.

WA-based iron ore stocks put on a healthy 14.5 per cent during October, which Deloitte said was driven largely by a speculated growth in demand for steel, combined with customers taking advantage of the low prices to replenish stocks.

“Renewed confidence in the short to medium term demand for steel has brought much needed relief to WA’s iron ore industry, and is allowing producers to re-evaluate whether previously halted projects are now feasible,” Deloitte WA mining leader Tim Richards said.

Deloitte did point out, however the caution currently being demonstrated by investors due mainly to the announcement of China’s GDP data for the September quarter, which was released mid-October.

The Chinese economy grew by 7.4 per cent year on year in the third quarter, the slowest rate since early 2009.

Deloitte said the idea of slower growth occurring in China had spooked fears of lower levels of investment in infrastructure and commercial construction, negatively impacting base metals nickel, zinc and aluminium, whose prices fell by 12.4 per cent, 11.4 per cent and 9.9 per cent respectively.

The All Ordinaries outperformed the WA Index in October, boosted by the strength of key iron ore producers BHP Billiton (ASX: BHP) and Rio Tinto (ASX: RIO), as well as strong performances from the big four banks which announced robust annual profits.

Junior resource stocks to gain the attention of Deloitte’s WA Index for the month of October included Marengo Mining (ASX: MGO) and Central Petroleum (ASX: CTP), who posted increases in market capitalisation of 52.4 per cent and 44.7 per cent respectively.

Marengo Mining experienced a 52.4 per cent increase in its market capitalisation during October, increasing by $63 million to $182 million.

Marengo is focussed on its Yandera project, which it claims to be one of the largest undeveloped copper projects in the Asia-Pacific Region.

In early October, Marengo presented at the Resources Rising Stars Conference in Queensland, outlining the considerable resource potential of the Yandera project and the company’s future development plan, helping to drive the share price appreciation experienced over the course of the month.

Central Petroleum’s market capitalisation increased by $84 million, to close the month at $270 million.

Deloitte put this increase down to Central’s joint venture with Santos (ASX: STO) for the further exploration and potential development of permits in the Amadeus and Pedirka Basins in central Australia, which was announced in early October.

The arrangement relieves Central of the obligation to provide substantial capital, with Santos to fund exploration activities, in return for up to a 70 per cent interest in the areas of interest.