【Chinatungsten Online News Net- Tungsten News】

Wolf Minerals is now construction ready at its Hemerdon tungsten and tin project in the southwest of England.

Based on its economic importance and high risk of supply disruption, tungsten has been named a "critical" metal in recent British Geological Survey (BGS) and European Commission (EC) publications.

Tungsten is an essential industrial element with hundreds of end-use applications.

Hemerdon boasts the third largest tungsten resource globally, production is on track to commence in mid-2015, and offtake contracts already in place.

A US$75 million Bridge Finance Facility has been secured from major shareholder, Resource Capital Funds, to commence design and construction work, and Senior Project Finance Facilities of £75 million from ING, Unicredit and CAT Financial are in place.

Wolf has also finalised a £75 million fixed price, fixed term contract awarded to GR Engineering Services (ASX: GNG) for the design and construction of the process plant, and an £85 million Mining Services contract awarded to CA Blackwell Ltd to mine the open pit and build the mine waste facility.

First draw-down of the Senior Project Finance Facilities is subject to completion of conditions, including repayment of the existing £75 million RCF Bridge Finance Facility, due by June 7th this year.

All major permits to proceed with development have been received, and all properties to be acquired as a condition of the Planning Permission have been purchased.

Wolf's project remains on schedule to commence earthworks this month, with construction scheduled to kick off during the second quarter.

Capital costs of the 3 million tonne per annum tungsten project have been updated to a total of £123.2 million, which includes 450 tonnes of tin production.

Operating costs have also been updated, to a C1 cash cost of US$109 per 10 kilograms of tungsten.

Hemerdon contains reserves of 27 million, while 117 million tonnes in measured and indicated resources offers significant upside.

Notably, the tungsten market has strengthened significantly since the release of its definitive feasibility study in 2011, from US$360 per 10 kilograms to its current US$475 per 10 kilograms.

Tungsten production is presently dominated by China, and Chinese restrictions on production and export of concentrates are one of multiple factors supporting higher prices in the near and medium term.

Several potential producers of new tungsten expected to come on-line have failed to do so, due to technical and financing challenges.

This is likely to put further upward pressure on tungsten prices, likely to coincide with the scheduled commencement of production at Hemerdon in mid-2015.