Woulfe Mining (TSXV:WOF,OTCQX:WFEMF,FWB:OZ4) awarded a mining development and production contract to Youngin Industries Corporation and in doing so, also announced that mine production cost will be lower by 49% and will increase the project NPV from US$400.3 million to US$535.2 million, taking IRR from 46.0% to 65.6%.
As quoted in the press release:
The Youngin mine production plus pastefill costs totals $25.64 per tonne of ore mined compared with $38.30 per tonne mined estimated in the Feasibility Study. This improvement in costs came as a result of replacing projected Canadian mine costs in the Feasibility to firm Korean costs. Other benefits include reduced capital allocation (US$20 million) for the mine fleet and subsequent reduction in pre-production ore mining and mine development costs.
Tetra Tech is working on updating the mineral resources to include the last five months of drilling. With this update an updated addendum of the feasibility will be released that will include the revenue from byproducts and the benefits resulting from the lower mining cost. Reducing the mining cost will have a significant impact on mine cut-off grade which will be expected to increase the resource base.
Woulfe Mining CEO Brian Wesson said:
The lower mining cost results in a NPV in line with the company’s expectations and prior valuation. The project is robust and low risk as Korea is an OECD developed country.