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To: LoneClone who wrote (72343)	12/12/2010 7:42:04 PM
From: LoneClone	Read Replies (1) \| Respond to of 194002

Woulfe sees output by 2012 at Korea tungsten mine miningweekly.com By: Liezel Hill 10th December 2010 TORONTO (miningweekly.com) – TSX Venture Exchange-listed Woulfe Mining will start production at its Sangdong tungsten mine in South Korea during 2012, CEO Brian Wesson said in Toronto on Friday. The company announced last month it would sell 51% of the project to Korea Zinc, in return for C$38-million and around C$75-million of project funding. Korea Zinc will also take a 13,4% stake in Woulfe itself. The agreement still needs shareholder approval, but Wesson said he has received indications from a majority of the firm's big investors that they intend to back the deal. A vote is scheduled for January 21. Woulfe plans to start operations at Sangdong, a big producer of tungsten until it closed in the early 1990s, at 1,2-million tons a year, to produce 400 000 mtu/y of ammonium paratungstate (APT) and 500 000 lb/y of molybdenum. But the company is designing the plant with a capacity of 2,4-million tons, which would give it the option to increase output in the future, Wesson said. The company wants to get into production as soon a possible to start generating cash and take advantage of a strong tungsten market. Tungsten prices have surged over the last year, from some $120/mtu in December 2009 to about $320/mtu this month. Most production of the metal, used to strengthen steel and prevent corrosion, comes from China, which is curbing exports to ensure domestic supply. "Korea could take all the tungsten that we could produce but, strategically, Japan is also knocking on our door," Wesson said. Although the firm is giving up a majority interest in the Sangdong project, the benefit to shareholders is that Woulfe will be carried through to production and still own 49% of the asset, while maintaining a “clean” balance sheet, he said. It has also managed to finance the project without committing to offtake agreements to secure the funds, which leaves Woulfe and Korea Zinc free to negotiate optimal terms for all the production from Sangdong, he said. The breakeven price for the Sangdong mine was calculated at around $167/mtu in a scoping study earlier this year. KORES INTEREST Although Korean Zinc was able to move more quickly on a transaction, Woulfe also had talks with government-owned Korean Resources (Kores), which remains interested in putting money in the Sangdong asset, Wesson said. "They have told us that they want to invest, how that will happen I don't know." Korea Zinc is the world's biggest producer of refined zinc. It has a $5-billion market capitalisation and has forecast sales revenue of $3,2-billion this year. Shares in Woulfe Mining were down 1,52% on Friday afternoon, at 32,5 Canadian cents each.