As tungsten is rare and market participants commonly express discomfort with the fact that China is its dominant supplier, one might reasonably assume that investors would be flocking to companies with projects elsewhere around the globe. But that rush is simply not occurring. On the contrary, it is common to find tungsten miners whose stock quotes show low volumes and prices in the red.
Take Wolf Minerals (ASX:WLF), which is aiming to redevelop the Hemerdon mine. Located in the UK, Hemerdon is one of the world’s largest tungsten deposits, and Wolf is aiming to produce a shipping container of tungsten per day.
But the company is still in the fundraising stage.
“Raising money takes time at the moment,” said Jeff Harrison, UK operations manager.
Wolf has done fairly well this year with regard to creditors and large investors. After receiving credit approval for £55 million from three major banks, Wolf signed an offtake deal with two customers that includes terms for a £20 million loan.
Since then Wolf has secured another £3.2 million from shareholders Resource Capital Funds and Traxys Projects.
And the company announced that it has ceased to progress the existing credit offer of £55 million as the senior creditors put forth an offer to expand their position to £75 million. Approval is expected in October.
According to Harrison, the company needs all the money — £110 million — in place before it can begin to do anything on the ground.
Given the prospects for the project and the apparent confidence of some parties, it may be surprising that equity investors are not showing similar enthusiasm. The company’s average volume Wednesday was just over 63,000. Its share price year-to-date was down over 14 percent and down over 27 percent over six months.
WLF Price at posting:
26.0¢ Sentiment: None Disclosure: Not Held
