Drakelands Tungsten Mine Was Rescued with a £2 Million Loan

Plymouth’s huge Drakelands tungsten mine has secured its short-term future with a £2 million loan – but will be conducting a major financial review into its finances as it is now more than £60million in debt.

Australian-owned metals producer Wolf Minerals ltd has managed to secure an additional £2million immediate payment under its existing bridge loan so it can keep digging at the enormous opencast pit at Hemerdon, near Plympton.

It has actually expanded its bridge loan from £65million to £69million with another tranche of £2million available in two packages of £1million.

This can even be increased to £5million at the discretion of mining focused private equity firm Resource Capital Fund VI LP (RCF VI), which has provided the bridging funds.

The mining company, which is £63million in debt but has £11million in the bank, has also struck a deal with major lenders regarding outstanding fees and payments and has managed to put-off paying about £2.1million in interest and other debts until October 28, 2018.

But the company, which has been beset by problems at the mine and low commodity prices worldwide, stressed the new finance arrangements are only sufficient to support short-term working capital requirements and during the next three months it will undertake a strategic review of its funding. However the firm has seen a major turnaround in its fortunes at the mine, which employs 250 people, in the past three months.

Wolf has just reported record production at the mine, bouncing back after the Beast from the East cold weather hampered digging in March 2018.

Tungsten and tin production is now up 41 per cent and 67 per cent respectively during the past 12 months with June particularly strong. Throughout the year two million tonnes of ore was processed for the first time following a production record of 222,541 tonnes for the month of June.

And, after being bedeviled by low commodity prices the tungsten price has now gone up six per cent during the past three months and is now at its highest level since 2014.

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