Wolf extends bridge loan to support UK tungsten project
PERTH (miningweekly.com) – ASX- and Aim-listed tungsten and tin producer Wolf Minerals has secured an additional £10-million from financier Resource Capital Fund (RCF) to support its Hemerdon project, in the UK.
Wolf on Thursday reported that RCF had increased Wolf’s existing bridge loan facility from £30-million to £40-million, with the potential to increase to £45-million at the discretion of RCF.
Wolf told shareholders that the additional proceeds under the bridge facility would provide the company with funds to advance its operational turnaround plan at the Hemerdon project, and would enable the company to continue to progress discussions with third parties as part of a strategic review of the financial alternatives available in the current tungsten price environment.
The Hemerdon project has continuously experienced reliability and performance issues with the ramp-up of the processing plant, and the progress towards steady-state production has been delayed.
In addition, tungsten prices also remain lower than anticipated, despite a constrained global supply, Wolf says.
As a result, the company is now implementing an operational turnaround plan focused on building an operating platform, which can support future volume increase and optimise performance.
Meanwhile, subject to shareholder approval and the satisfaction of a number of other conditions precedent, the bridge facility will switch to a subordinated convertible loan in October this year, or a subordinated loan if those conditions are not satisfied.
As part of the amendment to the bridge facility amount, the minimum conversion price of the subordinated convertible loan has been reduced from 13c a share to the lesser of 7c a share, and the price of any subsequent equity issued as part of any broader recapitalisation transaction.
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