Shares in Subiaco-based Wolf Minerals Ltd surged almost 30 per cent today, after the company said it expected to achieve significant annual revenue from tungsten production at its Hemerdon project in the United Kingdom.
The company believes the project is capable of producing 3000 tonnes per annum of tungsten metal, and based on a tungsten price of US$250 ($285) per metric tonne unit, anticipates annual revenue in the order of US$75 million ($85 million).
The mine is also expected to produce 500tpa of tin valued in excess of US$8 million ($9.1 million) at today's prices.
Acquired by Wolf in December 2007, the Hemerdon project in south-west England is thought to be one of the largest tungsten and tin deposits in the world, and work is underway to bring a 1982 feasibility study up to date and the mine into production.
After opening at $1.30, news of the positive outlook sent the company's shares soaring by 30 per cent to an intraday high of $1.69, before settling to a closing price of $1.65.
Wolf later issued a clarification, reiterating that there was no guarantee that these (or any) production rates or revenues would be realised as the project economics were currently being reviewed by the company.
The company has commissioned SRK Global to produce the JORC-compliant resource and Wolf expects to have the resource completed and announced in February 2008.
Wolf managing director Humphrey Hale said that confirmation of previous AMAX drilling data would allow for a rapid re-assessment of the feasibility study and along with the already granted planning approvals, the company had an excellent platform to become one of the world's largest tungsten producers in a short period of time.
"We consider that Hemerdon offers exceptional large scale, low risk, long life production as well as providing further exploration opportunity, with the extent of mineralisation beneath the pit yet to be determined," Mr Hale said.
Wolf said its likely tungsten metal haul of 3000tpa, was only exceeded by China (63,000tpa) and Russia (4500tpa), while world demand for tungsten had increased by approx 3000tpa over the past five years.
