Woulfe Mining Corp.
TSX VENTURE : WOF
OTCQX : WFEMF
FRANKFURT : OZ4

Woulfe Mining Corp.

August 01, 2012 08:30 ET

Woulfe Mining Clarifies and Restates Certain Disclosure

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 1, 2012) - Woulfe Mining Corp. ("Woulfe" or the "Company") (TSX VENTURE:WOF)(OTCQX:WFEMF)(FRANKFURT:OZ4) Woulfe Mining Corp reports that as a result of a review by the British Columbia Securities Commission (BCSC), it is issuing the following news release to clarify, retract, restate and update certain of its previously issued technical reports, investor relations presentations, reports and disclosures on its website www.woulfemining.com.

Updated Preliminary Economic Assessment:

The Company has revised the pricing assumption utilized in the preliminary economic assessment on the Muguk property having an effective date of April 27, 2012 and entitled "Preliminary Economic Assessment on the Muguk Property" (the "PEA"), as announced on March 14, 2012 in order to be in line with pricing assumptions used by comparable issuers. The new base case pricing assumption will be US$1,400/oz as compared with US$1,600/oz as disclosed in the PEA.

As a result of this change, the Company restates its financial model results to reflect the new base case such that the undiscounted net pre-tax cash flow for the Muguk Property is US$37.0 million. The net discounted pre-tax cash flow, using a real pre-tax discount factor of 8%, is US$9.8 million. Payback of capital (in both discounted and undiscounted terms) is within six years and IRR is 13%. The Company advises that investors should rely on the new base case data and that results based on the pricing assumptions in the PEA should be considered as a sensitivity analysis only.

Further, a preliminary economic assessment should not be considered to be a pre-feasibility or feasibility study, as the economics and technical viability of the project has not been demonstrated at this time. The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Furthermore, there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserve do not have demonstrated economic viability.

A revised preliminary economic assessment for the Muguk Property is currently being prepared by AMC Mining Consultants Pty Ltd., with the revised base case assumptions noted above and will be available on SEDAR in due course.

Other than the revisions to the base case pricing assumptions, the content of the PEA will also be amended to address the following items:

  • To remove certain disclaimers in Item 3 - Reliance on Other Experts.
  • To remove certain references to disclosures which appear to establish mineral reserves, noting that no mineral reserves have been established at the Muguk property.
  • To remove references to the words "ore" and "orebody" to describe mineralization at the Muguk property.
  • To provide a detailed breakdown of the costs associated with the recommended work program for the Muguk property, being the advancement of the Muguk property and the completion of a pre-feasibility study thereon. The total estimated cost of this program is between US$1.580 million and US$2.440 million.

Disclosure Review:

The Company's website, presentations, a valuation report and certain news releases contained the following information:

  • references to historical, non-NI 43-101 compliant, resource estimates for both the Sangdong and Muguk properties.

  • tables and information containing total resource numbers which added inferred resources to other categories of resources in respect of the Sangdong property, or which used a category of mineral resources, specifically "unclassified mineral material", not permitted by NI 43-101 in respect of the Muguk property.

  • disclosures of further potential on exploration targets for the Muguk property.

  • disclosures of estimated net present value and capital expenditures for the Muguk property that were inconsistent with those set forth in the PEA.

  • tables and information containing reserves and resource numbers which did not report to what extent mineral resources were included in mineral reserves in respect of the Sangdong property.

  • disclosures of 'gross metal values', 'in-situ values' or 'metals equivalents' and disclosures of economic analysis based on inferred resources without the appropriate cautionary language required by NI 43-101 in relation to the Sangdong property as in a link to a valuation report prepared by a third party at the request of the Company.

  • disclosures of annual production estimates for molybdenum at the Sangdong property when molybdenum was not included in the current feasibility study for the Sangdong property and without a current resource for molybdenum on the Sangdong property.

While the Company dedicated significant internal resources to verify the information contained above, the disclosure to the public through the Company's website, presentations, press releases and reports was not in compliance with National Instrument 43-101 ("NI 43-101").

The Company wishes to further clarify information as follows:

  • Contents of the presentation and the website failed to indicate that the disclosure was approved by a Qualified Person as defined by NI43-101. Going forward, all website content and materials distributed to the public will provide disclosure on the Qualified Person responsible for such content.

  • A non-NI 43-101 complaint historical resource estimate for the Muguk Property was reported by Korea Resources Corporation (KORES) in 1998 to contain a combined resource of 1,418,980 tonnes @ 13.5 g/t gold, 72.8 g/t silver (615,956 oz gold and 3,321,599 oz silver). A qualified person has not completed sufficient work in order to classify historical resource estimates for the Muguk property as current mineral resources or reserves and the Company is not treating these historical estimates as prepared by KORES or otherwise as current mineral resources or reserves but as historical estimates for informational purposes only that should not be relied upon.

  • Resource statements regarding the Muguk property as found in the Company's March 12, 2012 press release, referencing estimates of "unclassified mineralized materials" are not 43-101 complaint. The Company retracts this disclosure for the Muguk property and clarifies that the PEA as authored by AMC Mining Consultants Pty Ltd. is available on the Company's SEDAR profile. The only current resource calculations that have been approved by or on behalf of the Company are as stated in the PEA, being an Inferred Mineral Resource, at a cut-off of 4 g/t gold, of 900,000 tonnes at 10 g/t with an average vein width of 1.2 m.

  • The Company retracts its disclosure concerning the potential of exploration targets at the Muguk project. Potential additional resources are conceptual in nature only and should not be relied upon. There has been insufficient exploration to define a mineral resource outside either current NI 43-101 compliant resource areas and/or areas of historical resources. It is uncertain if further exploration will result in the delineation of any additional mineral resources. Estimates for potential resources is based on the presence of step-out mineralized drill holes, known mineralized zones open along strike and/or laterally or at depth for exploration, known roll front trends that are favourable for mineralization not fully explored, lowering the cut-off grades for known mineralization, geochemically and/or geophysically anomalous areas indicating potential mineralization not previously drill tested, size of favourable land holdings, and potential acquisitions immediately adjoining the Company's properties.

  • The Company retracts its prior disclosure in the presentation to estimated net present values and capital expenditures for the Muguk property and clarifies that the forthcoming amended PEA will report that at an assumed gold price of US$1,400 per ounce, the Muguk property provides an undiscounted net pre-tax cash flow is US$37.0 million. The net discounted pre-tax cash flow, using a real pre-tax discount factor of 8%, is US$9.8 million. Payback of capital (in both discounted and undiscounted terms) is achieved during Year 6 of operation. The internal rate of return (IRR) is 13%. The life of mine capital cost estimate for fixed plant items is US$60.2 million. This includes US$20 million for the processing plant, $19.4 million for the access decline, US$7.0 million for engineering, procurement, and construction management and US$4.3 million for sustaining capital.

  • A non-NI 43-101 compliant historical resource estimate for molybdenum at the Sangdong property was reported by Korea Engineering Co. Ltd. in 2001 and a memo of Paul Matthews and Heywood Bates in 2008. A qualified person has not completed sufficient work in order to classify historical resource estimates for molybdenum on the Sangdong property as current mineral resources or reserves and the Company is not treating these historical estimates as prepared by Korea Engineering Co. Ltd. or Paul Matthews and Heywood Bates or otherwise as current mineral resources or reserves but as historical estimates for informational purposes only that should not be relied upon.

  • A feasibility study on the Sangdong property having an effective date of June 6, 2012 and entitled "Sangdong Project Feasibility Study" was authored by TetraTech WEI Inc. (the "Feasibility Study") is available on the Company's SEDAR profile and provides a probable tungsten reserve 13.3 Mt @ 0.425% WO3 with a cut-off of 0.24%WO3). The Feasibility Study did not contains a complete resource update but converted a prior reported indicated resource of 16.4 Mt.@ 0.45% WO3 with a cut-off of 0.15%WO3 to the probable reserve reported above. The prior resource estimate on the Sangdong property, including the indicated resource referenced above, has an effective date of January 24, 2012 and entitled "Sangdong Project Resource Estimate" was authored by Wardrop, TetraTech WEI Inc. and is available on the Company's SEDAR profile. This resource estimate is as stated in the table below, noting that the Feasibility Study has converted the indicated resource to a probable reserve:
Table Sangdong, Skarn mineralisation Resource Estimate; reporting cutoff 0.15% WO3.
Resource
Category
Mineralized
Zone
Tonnes
(Mt)
Density WO3(%)* MoS2(%)** MTU
Indicated F2 2,298,000 2.98 0.63 0.04 1,448,000
Indicated F3 2,604,000 2.96 0.56 0.05 1,458,000
Indicated Halo 5,576,000 2.91 0.27 0.03 1,505,000
Indicated Main 5,952,000 3.25 0.50 0.03 2,976,000
Indicated
**
Total 16,431,000 3.04 0.45 0.04 7,387,000
Inferred F2 2,680,000 2.91 0.50 0.03 1,340,000
Inferred F3 2,712,000 2.90 0.49 0.03 1,329,000
Inferred Halo 6,523,000 2.88 0.23 0.02 1,500,000
Inferred HW 7,191,000 2.96 0.58 0.08 4,171,000
Inferred Main 259,000 2.92 .052 0.02 135,000
Inferred Total 19,368,000 2.92 0.44 0.05 8,475,000
Inferred F2 4,097,000 2.85 0.60 0.07 2,458,000
Inferred F3 4,315,000 2.85 0.57 0.06 2,460,000
Inferred Halo 5,973,000 2.85 0.21 0.06 1,254,000
Inferred HW 15,924,000 2.84 0.69 0.11 10,988,000
Inferred Main 4,208,000 2.85 0.60 0.03 2,525,000
Inferred Down Dip Total 34,519,000 2.85 0.47 0.07 19,685,000
Note: MoS2 is reported in terms of WO3 cut-off
WO3 = Tungsten trioxide, MoS2 - Molybdenum Disulphide, MTU - metric tonne unit.
** Indicated Resources was converted to a Probable Reserve in the Feasibility Study.
The resource is split into two sections by elevation, representing the down dip potential of the deposit below current waterline.

The only current mineral resource and mineral reserve estimates that have been approved by or on behalf of the Company in relation to the Sangdong property are as stated above in these reports.

  • The global resource statements regarding the Sangdong Property as found in the Company's prior investor relations presentation are grouped resources and non-NI 43-101 compliant. The Company retracts its disclosure of the global resource numbers for the Sangdong property and clarifies that the NI 43-101 compliant resource on the Sangdong property is as per the disclosure above.

  • The Company retracts the valuations and disclosures for the Sangdong property concerning gross metal values (in the form of a valuation based on total resource and discounted pricing) and based in part on inferred resources and notes that preliminary assessments are preliminary in nature and include inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that any preliminary assessment will be realized or that inferred resources will be converted to measured and indicated resources or proven and probable reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The Company's inferred resources have not been upgraded to any higher mineral resource or reserve category and any discussions relating thereto are premature. The Company is in the process of having the valuation revised and will provide an updated version in due course. The Company cautions that the prior form of valuation should not be relied upon.

  • The Company retracts its annual production estimates for molybdenum at the Sangdong property and notes that the Feasibility Study did not include molybdenum and there is no current molybdenum resource for the Sangdong property.

The Company has removed its prior investor presentation and updated and provide a new presentation dated August 2012 to replace the prior version, which is now available on the Company's website at www.woulfemining.com.

In addition to the removal of the retracted language, the following updated cautionary language, among others, has been added to the disclaimer page of the Company's website.

Cautionary Note Regarding Mineral Resources and Mineral Reserves

Readers should refer to the Company's current technical reports and other continuous disclosure documents filed by the Company available on SEDAR at www.sedar.com for further information the mineral resource estimates of the Company's projects, which are subject to the qualifications and notes set forth therein, as well as for additional information relating to the Company more generally. Mineral resources which are not mineral reserves, do not have demonstrated economic viability. Inferred mineral resources have insufficient confidence to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability suitable for public disclosure. Neither the Company nor readers can assume that all or any part of an inferred mineral resource will be upgraded to indicated or measured mineral resources. Most projects at the inferred mineral resource stage do not ever achieve successful commercial production. Each stage of a project is contingent on the positive results of the previous stage and that there is a significant risk that the results may not support or justify moving to the next stage.

In those instances where the Company has retracted, revised, clarified or updated previous disclosure, the Company advises readers not to rely on such statements as they may continue to be found in the public domain.

Mr Edward Gleeson MAusIMM (CP) of AMC Consultants Pty Ltd., a consultant of the Company, is the Qualified Person under National Instrument 43-101 who has approved the technical content of this news release in respect of the Muguk project.

Paul Gribble C.Eng, of Wardrop Tetra Tech UK, a consultant of the Company, is the Qualified Person under National Instrument 43-101 who has approved the technical content of this news release in respect of the Sandong project.

On Behalf of the Board of Directors
Woulfe Mining Corp.
Brian Wesson (FAusIMM)
President, CEO and Director

About Woulfe Mining Corp.

In partnership with IMC, Woulfe is developing the Sangdong tungsten-molybdenum mine which was historically, one of the largest tungsten mines in the world and one of the few long life, high grade tungsten deposits outside of China. The Company has assembled a highly skilled, in-country, bilingual technical team and a board of directors with an outstanding track record of success.

Woulfe Mining Corp. is a TSX-V listed company.

Forward-looking statements and forward-looking information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. We have made certain assumptions about the forward-looking statements and information and even though our management believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that the forward-looking statement or information will prove to be accurate. Furthermore, should one or more of the risks, uncertainties or other factors materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. These risks, uncertainties and other factors include, among others, the following: commodity price volatility; discrepancies between actual and estimated production, mineral reserves and resources and metallurgical recoveries; mining operational and development risk; litigation risks; regulatory restrictions, including environmental regulatory restrictions and liability; failure to complete the strategic arrangement described in this release, including because of the failure to satisfy the conditions to closing of the transaction, risks of sovereign investment; currency fluctuations; speculative nature of mineral exploration; global economic climate; dilution; share price volatility; competition; loss of key employees; additional funding requirements.

There can be no assurance that forward-looking statements or information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, you should not place undue reliance on the forward-looking statements or information contained herein. Except as required by law, we do not expect to update forward-looking statements and information continually as conditions change and you are referred to the full discussion of the Company's business contained in the Company's reports filed with the appropriate regulatory authorities.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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