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Wolf confirms debt rescheduling and bridging loan

Wolf Minerals has reached agreement with its major shareholders, its lenders and its concentrate offtake partners on a funding arrangement to ensure its Drakelands tungsten/tin mine can continue to ramp up operations to full, commercial production. The key points of the agreement are:

1.      A standstill of the senior debt conditions until either Devon County Council extends the Drakelands planning permission for an expiry date beyond 2021 or 31 January 2018.   

2.      The Senior Debt principal (£64 million outstanding) repayments deferred until January 2018 and tenor conditionally extended until June 2023.

3.      A minimum £20m bridge loan facility for 12 months with Wolf’s major shareholder Resource Capital Fund, which can be increased to £30m at RCFs discretion. If not repaid within the 12-month period, the loan switches to either a 3-year subordinated convertible loan or a 3-year subordinated loan. The loans will carry interest at rates between 10% and 15% per annum and may be repaid with cash or shares. RCF current holds a 56.3% interest in Wolf.

Wolf’s offtake partners have agreed to the restructuring and will extend the company’s supply agreements in line with the extension to the senior debt.

The Drakelands mine, which commenced production in September 2015, has struggled to reach planned production rates owing to the failure of certain equipment in the plant and poor recoveries due to the ore being finer than expected. In addition, the company has been hit by low tungsten prices on the world markets since startup.

Wolf is implementing a series of modifications in the plant and expects mining to transition to coarser ore over the coming year.

Wolf confirms debt rescheduling and bridging loan: WLFE

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