Shares in Wolf Minerals suspended as it calls in administrators
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.