LONDON (Alliance News) - Wolf Minerals Ltd said Monday it has agreed to a temporary deferment of debt payments and entered into a new bridge loan facility as it works towards commercial production at its tungsten mine in Devon.
Wolf Minerals said it has established a standstill period and restructure of its GBP64 million of outstanding senior debt with its creditors. The standstill, limiting the events of default on Wolf Mineral's debt, will hold until Devon County Council delivers its decision on the extension of the Drakelands mine planning permission beyond 2021, expected before the end of 2016.
The restructure means all Wolf Mineral's senior debt principal repayments are deferred until January 2018 and the period of repayment is extended until June 2023, conditional on the planning permission being granted.
Wolf Minerals has also entered a 12-month GBP20 million bridge loan facility with Resource Capital Fund VI LP. The fund is a major shareholder in Wolf Minerals, and if not prepaid the loan will switch to a three-year subordinated loan, convertible into equity dependent on the satisfaction of certain conditions.
Wolf Minerals said the refinance will aid in its efforts to improve production at the tungsten mine, which has been hit by processing plant underperformance and a finer ore than expected, along with low tungsten prices. Wolf Minerals will launch a programme of equipment changes and design modifications, and also expects the ore to become coarser in the course of mining.
"The executed agreements enable Wolf to continue its focus on improving operations at the Drakelands mine to enable the project to reach its true potential. We are starting to see improvements in production following the commencement of the work program in the processing plant and remain confident that Wolf, with its large production capacity and location in a first world country, is well positioned within the global tungsten market", said Russell Clark, managing director of Wolf Minerals.
Shares in Wolf Minerals were down 1.6% at 4.92 pence Monday.
By Adam Clark; adamclark@alliancenews.com
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