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The feasibility study is based on mining 1.2Mt from the Main and Footwall ore bodies above the valley floor (probable tungsten reserve 13.3Mt @ 0.425% WO3 with a cut-off of 0.24%WO3). The feasibility considers a window of 11.5 year mine life based on reserves. Infill drilling is ongoing in the eastern hanging wall and western extensions of all three mineralised zones above the valley floor with a view to further upgrading the 53.9 Mt of inferred resources and extending the mine life.
The ore will be mined by mechanised drift and fill methods and trucked to surface, crushed through a two stage crushing circuit and delivered to a fine ore bin. Comminution is via a primary rod and secondary ball mill that grinds and feeds the ore to a sulphide molybdenum/bismuth flotation circuit. The tail of the sulphide float is then processed through a tungsten ("WO3") oxide float at a recovery of 85% of the tungsten in concentrate. The concentrate is then processed through an APT refining plant to produce approximately 400,000 mtu (metric tonne units (10Kg) equivalent to 4000 tonnes) of Tungsten (WO3) per annum in the form of Ammonia Para Tungstate ("APT") which is then sold for the manufacture of hard metal tooling.
The feasibility study further makes provision for the extraction of by-product molybdenum and bismuth in a sulphide concentrate circuit. However no value has been attributed to the recovered metal as the downstream process for the concentrate is still in a design stage. Further it was believed prudent to include the capital and mining costs for owner mining; however, it is likely that one of the many tunneling contract companies in Korea will be used to develop the mine at a substantially lower unit cost. This has not been considered as tenders were not available at the closing date for the feasibility study inputs.
Summary of Feasibility
The feasibility study was prepared under the direction of Tetra Tech, an industry leading, international engineering firm, supported by a globally recognized feasibility study team, all of whom are independent of the Company, including:
First ore accepted to the process plant is targeted for 2013 following a 15 month construction phase beginning in 2012. Probable Mineral Reserves of 13.3 Mt of ore grading 0.425% WO3 results in an 11.5 year mine life. Initial capital costs are estimated to be $151.3 M including a pre-development cost of $8.2 M and including a contingency of $7.8 M.
Following completion of the phase 2 drilling and further historical data compilation at Sangdong Mine, Tetra Tech have estimated the Mineral Resource above the valley floor (the Upper Section) as given in the table below. Woulfe are continuing to drill and explore within the accessible working areas to refine the Resource.
Mineral Resource for the Upper Section of the Sangdong Mine
The Mineral Resource below the valley floor at the mine (the Lower Section) is all within the Inferred category and is estimated as given in the table below.
Mineral Resource for the Lower Section of the Sangdong Mine
Probable Reserves are the economically minable portions of the Indicated Mineral Resources as demonstrated by scheduling the mining of the Main and Footwall Zones using transverse drift and fill mining. The Probable Reserve is as follows:
Sangdong is an underground mine that was formerly worked from the 1930's to 1992 when it closed due to low tungsten price. The mining method selected had to be a very flexible design to accommodate mined-out areas but suited to high-productivity, trackless mining. The three sub-parallel mineralised zones, the variable dip, and the previously mined-out areas ruled out many options. Drift-and-fill was identified as the optimum method and a number of variations were assessed from mining on true dip, apparent dip, and horizontally. After a detailed review, transverse drift-and-fill proved to be the most viable method.
Ore will be hauled from underground in 40 tonne trucks to the primary crusher at a nominal rate of 3,500 tpd. Following the primary crusher, the ore will be conveyed through a secondary crushing circuit to a final crush size of 13.5 mm and conveyed to a fine ore bin. The ore is then milled in two stages via rod and ball mill circuit to a target grind of 75 microns. Thereafter a bulk sulphide flotation step is undertaken for the production of a combined molybdenum and bismuth concentrate (containing gold) that will be set aside for future processing. The sulphide flotation tails are then subjected to a two stage flotation process using a modified Petrov cycle for the recovery of a scheelite concentrate. Test work to date has demonstrated 85% recovery and 67% grade of WO3. The scheelite concentrate is then transferred to the APT Plant where it is subjected to a sodium carbonate leach for the recovery of tungsten and by product metals in order to produce standard grade ammonium para-tungstate (APT) for sale.
The project is well supported by local infrastructure, having been the site of an active mine. Local road networks are of high quality. Two new 10 MVA power lines will be installed by Korea Electric Power Corporation ("KEPCO") by the end of 2012. The site has sufficient power and an abundance of water for construction purposes.
The initial capital cost for Sangdong is estimated (in Q1 2012 dollars) at $151.3 million
with an accuracy of +/-15%, including a contingency of $7.8 million. The contingency allowance was calculated to be 7.5% of direct costs. Life of mine sustaining capital costs are estimated at $58.2 million.
Site operating costs, are $61.84 per tonne processed, as summarized below:
Based upon the foregoing and long term tungsten price provided by Roskill, the following economic parameters are indicated, including contingency:
There are initiatives currently underway which may further enhance project economics, including:
Key permits are in place with the following approvals required later in 2012 and 2013. Sangdong -- Drawings submitted to Korean architects to verify they comply with Korean county building code prior to lodgement for approval, expected in June 2012. This does not delay the project as initial earth works and demolition of old buildings will move ahead.
Woulfe has completed the detail design in parallel to the feasibility which has allowed the Company to advance the project and is in a position to initiate development of the production decline this quarter and finalise contracts for the construction of the process plant. Construction will proceed in June and progress through the winter to be commissioned in 2013. The Company is budgeting to create an ore stockpile of 200 Kt from initial mining and process 800,000 tonnes in the first 12 months (200 Kt from stockpile and 600 Kt from underground stopes).
In May 2010, Woulfe commissioned Tetra Tech to complete the Sangdong feasibility study in accordance with NI 43-101 reporting guidelines. The Mineral Resource estimate was supervised by Paul Gribble C.Eng, Mineral Reserve estimate and Mine Plan supervised by Jon Gliddon C.Eng, Process Plant design and costing by Contromation was reviewed and approved by Andy Carter C.Eng, APT Plant design and costing supervised by Rod Elvish C.Eng, Tailings and Backfill design and costing Karlis Jansons P.Eng, other capital and construction costs provided by Hanmi Global Korea and were reviewed and agreed by Jon Gliddon C.Eng.
The scientific and technical information in this release has been reviewed and approved by Jon Gliddon C.Eng, General Manager UK for Tetra Tech, and overall manager for the feasibility study. Mr. Gliddon is an Independent Qualified Person within the meaning of NI 43-101.
Readers should refer to the feasibility study Technical Report for further details of the project development. The feasibility study Technical Report will be filed in accordance with NI 43-101 on SEDAR (www.sedar.com) within the required 45 day statutory period and on the Company's website.
On Behalf of the Board of Directors
Woulfe Mining Corp.
Brian Wesson (FAusIMM)
President, CEO and Director
About Woulfe Mining Corp.
Woulfe Mining Corp. is a TSX-V listed company with a diversified portfolio of mining licenses for tungsten, molybdenum, gold, base metals and uranium-vanadium in South Korea.
The Company's current projects include the Sangdong tungsten-molybdenum mine, historically, one of the largest tungsten mines in the world; the Muguk gold-silver mine, formerly South Korea's largest gold mine, as well as a number of other properties with significant known mineralization and excellent regional exploration potential.
Woulfe has high expectations for near-term, low-cost production. The Company has assembled a highly skilled, in-country, bilingual technical team and a board of directors with an outstanding track record of success.
For more information, please contact --
Nicola Street Capital
Mobile phone +1 (415) 595-0865
Renmark Financial Communications
Office phone +1 (514) 939-3989
Woulfe Mining Corp.
+1 604 684 6264
+1 604 684 6242 (FAX)
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-looking statements and forward-looking information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. We have made certain assumptions about the forward-looking statements and information and even though our management believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that the forward-looking statement or information will prove to be accurate. Furthermore, should one or more of the risks, uncertainties or other factors materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. These risks, uncertainties and other factors include, among others, the following: commodity price volatility; discrepancies between actual and estimated production, mineral reserves and resources and metallurgical recoveries; mining operational and development risk; litigation risks; regulatory restrictions, including environmental regulatory restrictions and liability; failure to complete the strategic arrangement described in this release, including because of the failure to satisfy the conditions to closing of the transaction, risks of sovereign investment; currency fluctuations; speculative nature of mineral exploration; global economic climate; dilution; share price volatility; competition; loss of key employees; additional funding requirements.
There can be no assurance that forward-looking statements or information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, you should not place undue reliance on the forward-looking statements or information contained herein. Except as required by law, we do not expect to update forward-looking statements and information continually as conditions change and you are referred to the full discussion of the Company's business contained in the Company's reports filed with the appropriate regulatory authorities.
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