Wolf Minerals reports that tungsten prices improved in Q2 16 with the ammonium paratungstate (APT) price reaching US$225/mtu in May, up from an average of US$172/mtu for the March quarter. APT is the main traded intermediary tungsten product on which tungsten concentrate prices are based. The company notes, however, that the price remains some US$160/mtu lower than when it commenced construction of its Drakelands mine in March 2014.
Wolf continues to work with the EPC contractor, GRES, to optimise the plant operations after a number of manufacturing faults in equipment have impacted on production. In addition, mill recoveries have been detrimentally affected by the nature of the near surface ore mined thus far, which has exhibited much finer particle size (due to the weathering of the soft ore) than predicted over the life of the mine. The company has completed a drill programme to gather additional metallurgical data on particle size and the distribution of mineralisation within the ore body, which it will use to refine the mining plan to ensure that the ore blend suits the processing plant.
Wolf and GRES have together agreed modifications to the tin circuit and the mine dispatched the first tin concentrate in June.
The problems in the plant have meant that Wolf has not met its contractual concentrate supply commitments to customers and although the contract terms are automatically extended until the shortfall is met, the company may incur a price penalty. Wolf is in discussions with customers to reduce or defer this penalty.
The company has requested drawdown of the remaining £9 million of the subscription facility set up with major shareholder, RCF, earlier in the year.
Wolf continues to optimise plant operation as prices improve: WLFE