Shares in Wolf Min­er­als sus­pended as it calls in ad­min­is­tra­tors

The Daily Telegraph - Business - - Business - By Jon Yeo­mans

DEVON-BASED tung­sten miner Wolf Min­er­als has fallen into ad­min­is­tra­tion af­ter fail­ing to se­cure a fund­ing life­line, putting 200 jobs at risk.

Wolf op­er­ates the open-pit Drake­lands Mine near Ply­mouth, which was hailed as the first new met­als mine in the UK for 40 years when it com­menced pro­duc­tion in 2015. It had pre­vi­ously been mined dur­ing the world wars to make mu­ni­tions.

The com­pany’s shares on the Aim mar­ket have been sus­pended and it has ap­pointed ad­min­is­tra­tors at Aus­tralian-based firm Fer­rier Hodg­son. Though its op­er­a­tions are in the UK, its head­quar­ters are in Perth and it is also listed on the Aus­tralian Stock Ex­change, where it was forced to sus­pend trad­ing last month af­ter de­lay­ing the pub­li­ca­tion of its ac­counts.

Wolf said it had been “un­able to sat- is­fac­to­rily con­clude its dis­cus­sions with its key fi­nan­cial stake­hold­ers” and was “not in a po­si­tion to meet its short­term work­ing cap­i­tal re­quire­ments”, forc­ing it to cease trad­ing.

The miner is 56pc owned by pri­vate eq­uity fund RCF, which as of July had ad­vanced up to £69m to the com­pany as a bridge loan. Wolf also has a se­nior debt fa­cil­ity of £73m with four banks that ex­pires in 2023. A re­pay­ment of £2.1m on this loan had been due on Oct 28. John Meyer, of SP An­gel, said he was op­ti­mistic the mine could be saved.

“We sus­pect a num­ber of po­ten­tial new buy­ers have been wait­ing for this event – to ac­quire a ready-made tung­sten mine in a first-world lo­ca­tion.” Martin Potts, of FinCap, said the com­pany had strug­gled with a pro­cess­ing plant that was not able to re­cover as much tung­sten as promised. “Fun­da­men­tally, the op­er­at­ing re­sults weren’t there,” he said. “Who­ever takes it on will need deep pock­ets. Any po­ten­tial buyer has to be coldly re­al­is­tic about the chances of a pro­cess­ing plant work­ing.”

Wolf ’s op­er­a­tional prob­lems have been com­pounded by a weak­ness in the price of tung­sten, which is used in tools and elec­trodes. An­a­lysts said prices could climb as a re­sult of Drake­lands’ clo­sure. At the time of its com­mis­sion­ing RCF es­ti­mated it was the third largest tung­sten mine in the world.

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