Woulfe Mining Corp.

Woulfe Mining Corp.

January 06, 2011 10:09 ET

Woulfe Mining Completes $10 Million Equity Financing with Korea Zinc

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 6, 2011) - Woulfe Mining Corp. (TSX VENTURE:WOF) ("Woulfe" or the "Company") announced today that it has closed a non-brokered private placement (the "Private Placement") of CDN$10,000,000. The financing was 100% subscribed by Korea Zinc Co. Ltd. ("Korea Zinc") and certain of its nominees as previously announced by the Company on November 23, 2010.

The financing required issuing 33,333,333 common shares (the "Shares") at a price of $0.30 per share. Proceeds of the private placement will be used to continue the definitive drilling of the Sangdong tungsten-molybdenum project, secure mine and process equipment, and fast track design, feasibility and construction plans. Woulfe will continue to finance the project up to the second placement of CDN$38 million by Korea Zinc into Woulfe's Korean subsidiary, Sangdong Mining Corporation. Korea Zinc have further agreed to arrange debt funding of up to CDN$75 million to complete the project. Korea Zinc's investments into the Company's subsidiaries remain subject to the finalisation of due diligence by Korea Zinc which will be followed by regulatory and shareholder approval, which will be sought at the Company's annual and special general meeting to be held on January 21, 2011.

The proposed subsequent transaction will give Korea Zinc a 51% stake holding in Woulfe's Korean subsidiaries Sangdong Mining Corporation (investing a further CDN$38 million) and Muguk Gold Corporation (investing a further CDN$1.8 million). Woulfe and Korea Zinc will align their efforts in the management of Sangdong all the way through to production and positive cash flow from operations. The benefits to Woulfe shareholders from this transaction go far beyond the financing as Korea Zinc is a world leader in metals refining. These benefits include utilisation of a strong technical and operational team in Korea to assist taking the Sangdong tungsten-molybdenum project into production as quickly as possible.

"Korea Zinc's investment of an initial CDN$10 million into Woulfe and the projected investment of CDN$40 million into our subsidiaries is a significant milestone for the management team and our shareholders," stated Brian Wesson, President and CEO of Woulfe. "The direct investment into the Sangdong tungsten-molybdenum project means this project will progress as it is fully funded and there is no further dilution to Woulfe shareholders for the Sangdong project. The investment also puts the Company in a position to consider other project opportunities that will add value for our shareholders."

Korea Zinc will assume management control of Sangdong Mining Corporation on commissioning the mine. This is scheduled for 2012.

This transaction allows Woulfe to move quickly towards production gaining maximum benefit from the high APT price which is currently between US$330 and US$340 per mtu. That price represents an increase of 60% over the last six months and 34% on the scoping study completed by Wardrop, a Tetra Tech Company, in March 2010 on the Sangdong tungsten-molybdenum project which produced an NPV of US$462 million at an APT price of US$250 per mtu (1 mtu equals 10 kg).

The scoping study was to an accuracy of approximately 30% and confirmed the project's robust economics at the lower tungsten price. With tungsten prices far stronger and financing secured through our new partner Korea Zinc we are now moving quickly to develop the Sangdong tungsten-molybdenum project.

This financing increase Woulfe's cash balance to approximately CDN$12.4 million. In addition, the Company could realise approximately a further CDN$7 million in warrants and options that are currently "in the money".

The Korea Zinc transaction provides a "free carry" for Woulfe shareholders through to production and cash flow of the Sangdong tungsten-molybdenum project.

The Shares of this Private Placement will be subject to a hold period expiring on April 23, 2011.

Finder's fees of CDN$600,000 and 2,000,000 warrants ("Warrants"), representing 6% of the proceeds and Shares placed respectively, were paid in aggregate to Trident Investment Enterprise Ltd. and Notre-Dame Capital Inc. in connection with the Private Placement. Each Warrant entitles the holder to acquire one common share of the Company at a price of CDN$0.30 per share for a period of two years expiring on December 23, 2012.

Pursuant to the terms of the subscription agreement entered into by the Company, Korea Zinc will be entitled to nominate one person for appointment to the Company's board of directors for so long as it holds 5% of the issued and outstanding shares of the Company. Additionally, Korea Zinc, and its nominees in the Private Placement, will be entitled to maintain their pro rata interest in the Company, in the event the Company proposes to complete further equity financings, for so long as Korea Zinc, together with its nominees, continues to hold at least 5% of the issued and outstanding shares of the Company.

On Behalf of the Board of Directors

Woulfe Mining Corp.

Brian Wesson, President, CEO and Director

About Woulfe Mining Corp.

Woulfe Mining Corp. is a TSX-V listed company with a diversified portfolio of mining licenses for tungsten, molybdenum, gold, base metals and uranium-vanadium in South Korea.

The company's current projects include the Sangdong tungsten-molybdenum mine, historically, one of the largest tungsten mines in the world; the Muguk gold-silver mine, formerly South Korea's largest gold mine, as well as a number of other properties with significant known mineralization and excellent regional exploration potential.

Woulfe has high expectations for near-term, low-cost production. The company has assembled a highly skilled, in-country, bilingual technical team and a board of directors with an outstanding track record of success.

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; 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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