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).