Showing posts sorted by date for query wolf minerals. Sort by relevance Show all posts
Showing posts sorted by date for query wolf minerals. Sort by relevance Show all posts

Wednesday, 7 June 2023

In other news


For those unfamiliar with this long-running saga, the article reminds us that:
Tungsten West bought the mine out of receivership for £2.8m in 2019 when previous owner Wolf Minerals went into liquidation. Wolf sunk more than £170m into the project but suffered major problems with the plant and went into administration in late 2018 after just three years in production.
Posted by
Labels:

Wednesday, 2 June 2021

New company set up to exploit secondary aggregates at Drakelands

An ex-Aggregate Industries geologist is helping the new owner of Drakelands – the tin and tungsten mine near Plymouth at Hemerdon that fell into insolvency in 2018 – exploit the mine’s aggregates resource. Tungsten West is hoping to supply secondary aggregates to the Devon market and beyond – as we posted in Drakelands operator to begin selling 700,000 tonnes of stockpiled aggregates – with aim to “saturate” local market.

According to Devon County Council's latest monitoring report:  
There has been considerable assessment over the past year about the nature and potential extent of the aggregate resource at Hemerdon. The aggregates production is currently in experimental and demonstration phases and a new company, Aggregates West (AW) is producing a variety of different aggregates and sands from the killas and granite overburden and the Dense Media Separation solids from the process plant which were previously tipped at the foot of the Mine Waste Facility. A specialist geologist (Touchstone Geology) has been appointed who is a competent person to assess these matters to feed into the Definitive Feasibility Study. The assessment has included processing methods, capitalising the existing stockpiles and future mine wastes that might be produced with the use of the ore sorting technology. Some of the aggregates produced have also been assessed by the Devon County Council Materials Laboratory as being suitable for road surfacing and construction. AW has now also become a member of the Regional Aggregates Working Party and has stated its intention to contribute to the amount of secondary aggregates produced in Devon. 
The firm which bought the Drakelands mine near Plympton for £2.8million 18 months ago has completed a feasibility study and is now looking at options for reopening the site. Tungsten West Ltd has said it will look to raise finance off the back of the feasibility report, and that it will cost £30million to £40million to restart production.
Tungsten West is hoping to raise up to GBP20 million in equity and a further GBP40 million in debt, according to the Times, adding it is backed by former JP Morgan Chase & Co banker Ian Hannam and Moneysupermarket.com Group PLC co-founder Simon Nixon. 

Residents living next to a closed-down tungsten mine are 'terrified' its planned reopening will continue to blight their lives once again.

Residents are fearful that the mine’s Low Frequency Noise, vibrations, blasts and dust will begin spoiling their peace and quiet once again. 

One resident, who asked to be anonymous, fought back tears when she recalled what it was like living in Sparkwell when the mine was running last. 

“I found it really, really upsetting,” she said. “Literally everything in the house would rattle. 

“At night time, it was hard to sleep and dust in the air would fall down on our garden. How could they be allowed to be this disruptive? I do not want the mine to start up again.” 

Whilst the Environment Agency says it has given Tungsten West “a very clear steer” that lessons need to be learned from when Wolf Minerals Ltd operated the site, residents fear their lives will be turned upside down if and when Tungsten West reopens the controversial site. 

In the most recent correspondence from the Environment Agency, a letter dated January 27, area director for Devon, Cornwall and the Isles of Scilly, Helen Dobby wrote: “Since Tungsten West Ltd (TWL) acquired the mine site at Hemerdon, our local industry regulation officers have been working very closely with our national noise experts to provide advice and guidance. “We have given TWL a very clear steer that lessons must be learnt from the previous operations and appropriate control measures must be used to protect the local community. “Please be assured that TWL will need to demonstrate and justify the appropriate measures they intend to use to operate the Mineral Processing Facility, while protecting the local community and environment. “We understand from TWL that there will be some significant changes to the process plant, which they believe will demonstrate best available techniques for controlling noise and infrasound. As yet, we have not seen the full details of this.”
Posted by
Labels: ,

Sunday, 13 September 2020

‘Enormous supply of cheap aggregates discovered in Devon’, claims Tungsten West

A surprise and "lucky" aggregates discovery at the Drakelands tungsten and tin mine at Hemerdon near Plymouth will have "a huge advantage over local competitors", claims operator Tungsten West.

We’ve posted about Drakelands before. Since the discovery of a tungsten-tin deposit in 1867, the site has had a chequered history. Wolf Minerals was the latest company to attempt to profit from the deposit, pouring £200 million into the site before calling in the administrators in 2018.

Last year, Drakelands was purchased by Tungsten West Ltd. Operations are due to restart in 2021.

Of course, it’s easy to stand next to a hole in the ground and make grandiose predictions of untold mineral wealth; mining companies do it all the time – particularly when looking to raise funds from hopeful investors. Once upon a time, it was claimed there were 20 million tonnes of sand and gravel at Straitgate; now Aggregate Industries is struggling to make the case for less than 5% of that.

Grand claims are now being made about Drakelands, particularly about the huge supply of aggregates discovered. If those claims prove true, Aggregate Industries, and its business across the South West, will suffer.


Tungsten West has reassessed the Hemerdon site, and claims to have discovered hundreds of millions of tonnes of aggregates. The granite mined for the tungsten and tin "makes exceptionally high value aggregates." Classed as secondary aggregate – a by-product of working the metal deposits – this material would have "a huge advantage over local competitors" by avoiding the aggregates levy of £2 per tonne. Tungsten West’s executive chairman talks of a "fantastic opportunity" and claims:
The mine sits in an area of the UK which is desperately short of aggregates with very good prices.
We have the full suite, from 40 ml clean gravels all the way down to fine sands, which are produced naturally as part of the processing route.
Last month, according to Tungsten West, Devon County Council agreed to application PRE/4195/2020 to temporarily increase the amount of aggregates permitted to leave the site, from 150,000 tonnes to 1.4 million tonnes a year. Tungsten West hopes to make this permanent, and thereafter increase it further to 2 to 2.5 million tonnes a year, "once we’ve demonstrated we can sell that much aggregate into the local and wider markets."

Tungsten West hopes local markets could take "in the order of 0.5 million tonnes a year", and has apparently "signed letters of intent and are in the process of formalising full sales contracts for a number of large local housing projects where we would be the exclusive supplier of aggregates." The company claims the already-mined tailings from the Wolf Minerals operation contain 3 million tonnes of finely crushed granite which can be readily used for concrete and mortar.

In the longer term, Tungsten West is looking to sell 3.5 to 4 million tonnes of aggregates per year, which – with "at the gate prices of £12-14/tonne" – could produce "$50million of revenues." Drakelands is "less than a mile from rail", and, using Plymouth docks, aggregates could be shipped to London and Continental Europe. Tungsten West now expects 50% of revenue to come from tungsten, 5% to 10% from tin, and 40 to 50% from aggregates.

A new supply of levy-free aggregates of the magnitude described is bound to have an impact on the South West market, undoubtedly forcing current players to reassess the scale of their operations.
Posted by
Labels: ,

Wednesday, 5 August 2020

Tungsten West plans Drakelands mine restart for 2021

Last year, we posted that Tungsten West Ltd had bought the Drakelands tungsten and tin mine at Hemerdon near Plymouth for £2.8 million, with the hope of restarting production.

The mine shut in 2018 after operator Wolf Minerals ceased trading, having failed to produce enough metal and having lost £100 million in just three years.

Tungsten West thinks it can do better. Tungsten West "will spend £30-£40 million" on reopening the mine, and hopes "to become one of the biggest producers of tungsten concentrate outside China." It reckons the resource at Hemerdon represents the "World’s 4th largest Tungsten resource with the potential to become the world's largest".

We have completed initial test work and are now conducting a feasibility study, which is expected to be completed this year or by the first quarter of 2021. We expect to get financed off the back of the feasibility study, with a rebuild time of six months.
It seems to be pinning its hopes on a new processing route, using X-ray transmission ore sorting:
The additional ore sorting step will significantly reduce downstream processing costs, and feed into the concentrator plant, leading to a much cleaner and higher-grade ore.


This week, application DCC/4191/2020 was approved by Devon County Council.


Condition 3 of permission 9/42/49/0542/85/3 allows for the continued winning and working of tungsten and tin and disposal of mineral waste at Drakelands until 5 June 2036.
Posted by
Labels: ,

Tuesday, 3 December 2019

Plymouth’s Drakelands mine changes hands again

It was only in September that the Plymouth Herald reported "Plymouth’s Drakelands mine has a new owner – but it is unlikely any tungsten will be dug out of the ground." We posted on the subject at the time, but warned:
Will that be the last of mineral working in the area? Don’t hold your breath. In August, planning application DCC/4149/2019 appeared for land south west of Drakelands Mine, Sparkwell, for "exploratory trenching for mineral exploration."
Yesterday, Hargreaves Services plc announced it had sold the mine at Hemerdon to another party, who has "a view to recommencing tungsten mining operations in due course":
Following the announcement by Wolf on 10 October 2018 that it had ceased trading, Hargreaves has been in discussions with the Official Receiver, acting as liquidator of Wolf, and other interested parties including Devon County Council, the Environment Agency and various landowners regarding the future of the tungsten mine.
Earlier this year, Drakelands Restoration Limited ("DRL"), a wholly owned subsidiary of Hargreaves, acquired various freehold and leasehold properties and an assignment of the minerals lease whilst discussions over the site's future progressed. DRL has been reimbursed for the costs of safeguarding and maintaining the site during the period of those discussions.
The Board is pleased to announce that it completed the sale of DRL to a third party, Tungsten West Limited ("TWL"), for £2.8m in cash on 29 November 2019. The sale proceeds will be paid to Hargreaves today. As a result of this transaction, TWL has acquired control of the Hemerdon mine with a view to recommencing tungsten mining operations in due course.
Industry experts have put the cost of reopening the mine "at about £40million."

Posted by
Labels: ,

Wednesday, 18 September 2019

It’s really not going well for UK mining projects

There have been two large mining projects in the UK in recent years – both have run into trouble.


Yesterday, there was further bad news for Sirius. It has failed to secure the £400m needed for the next phase of development, after the government refused to provide support. Sirius has only enough cash to last six months. Its shares fell by almost 60%. In an effort to save the mine, the company will wind down construction work and as it seeks to find a partner or alternative financing.

Chris Fraser, Managing Director and CEO of Sirius, blamed "poor market conditions" and Brexit:
Nearly every meeting we had in July and August, every single investor asked about Brexit.



Posted by
Labels:

Monday, 9 September 2019

Drakelands’ new owner ‘looking to restore the site, not mine tin & tungsten’

The Plymouth Herald reports that "Plymouth's closed-down Drakelands mine has a new owner":
A newly set-up firm is associated with the company that lost £8m when the mine went belly up is now restoring the site.

We have previously posted about the tin and tungsten mine at Hemerdon near Plymouth. Drakelands opened to great fanfare in 2015, but warning bells were already ringing in 2016, and the mine ceased operating last year when Wolf Minerals appointed administrators having lost £100 million. It was the first new metal mine in Great Britain for 45 years. In 2015, Devon County Council Leader Cllr John Hart had said:
There is a long heritage of mining and quarrying in this part of the county and to mine one of the world's largest tungsten deposits will have a positive impact on the local and regional economy, which is good for jobs and the prosperity of Devon… the County Council has worked closely with Wolf Minerals to ensure the infrastructure and modern environmental controls required for the project are in place.
And indeed, DCC did work closely with Wolf Minerals, approving planning applications despite the "horrendous invasive unacceptable" impact that blasting and low frequency noise was having on the lives of local residents.

After Wolf Minerals went to the wall, we asked Who would take on Drakelands? It was an important question, given that the restoration of a huge scar on the Devon landscape hung in the balance.


DCC had stated in 2016 that funds were available for restoration:
There is already in existence a restoration bond with Wolf Minerals which was required as a part of the original legal agreement associated with the 1986 planning permission…. The value of the bond was calculated by the Mineral Valuer in 2014 to be in the region of £15 million… the operator has already posted the full amount into an Escrow Account to ensure that the finance remains available for this purpose. 6.135
One company hit by Drakelands’ fallout was Hargreaves Services, who lost £8m relating to Wolf’s failure. In July this year, Hargreaves reported:
As previously announced, in October 2018, one of the Group's customers, Wolf Minerals Limited, announced that it had ceased trading and subsequently it went into liquidation. As a result, the Group incurred an exceptional charge of GBP8.1m. The Group continues to have a small presence at the Hemerdon mine site where it is carrying out minor maintenance and asset safeguarding activities. The future of the site remains unclear, but Hargreaves is well positioned to secure any restoration or other work which may arise in due course. Hargreaves is not considering operating the mine.
Given the "cost of reopening the mine being put at about £40million" it’s not clear who would. Liquidators of Wolf Minerals have also been busy:


The Plymouth Herald reports that Hargreaves has now bought the mine, with a view to winning restoration work, not mining tin and tungsten.
A Department for the Environment spokesman said: “Some assets, including the mine, was bought from Wolf Minerals by Drakelands Restoration Ltd earlier this year. I believe the firm is coordinating the restoration of the area.”
Drakelands Restoration is one of a number of Hargreaves group companies listed under Hargreaves Corporate Director Ltd at Companies House.
Will that be the last of mineral working in the area? Don’t hold your breath. In August, planning application DCC/4149/2019 appeared for land south west of Drakelands Mine, Sparkwell, for "exploratory trenching for mineral exploration."

EDIT 11.9.19 Heavy earth-moving equipment arrives on site:


Posted by
Labels: , , ,

Tuesday, 6 August 2019

Another UK mining project in trouble


After the disaster last year, when the Australian mining outfit and owner of the Drakelands tungsten and tin mine in Hemerdon near Plymouth, Wolf Minerals, ceased trading and appointed administrators – losing £100 million and leaving a scarred landscape in need of restoration in its wake – now another UK mining project is in trouble.

Sirius Minerals has suspended a $500m (£410m) fundraising due to "current market conditions" – effectively putting financing for its massive polyhalite mine on hold.
The company, which is building a £2.5bn mine and Teesside processing plant, says it has enough cash to keep building at its current pace until September.
Yesterday, the FT was already predicting that Sirius Minerals would have to pay a high price for such funding – "more than 13 per cent"; as one portfolio manager said "a high-risk project finance deal masquerading as a high-yield bond":
London-listed Sirius needs to raise $500m from the debt market so that it can unlock a $2.5bn revolving credit facility (RCF) being provided by JPMorgan and complete development of the Woodsmith mine, one of the largest civil construction projects in the UK.
As the FT reported last year – when the miner needed a further $400m to $600m in financing after being "armed with a better understanding of local geology":
Woodsmith is the largest mine to be built in the UK for a generation. The project involves sinking two 1.5km shafts below a national park on the North York Moors to access a massive deposit of polyhalite.
Many groups and campaigners had objected to such an intrusive proposal in a National Park:
An open letter signed by 29 different groups, including the Caravan Club, the RSPB and the Campaign for National Parks, was sent to the national park authority, whose own internal report stated that the economic benefits of the mine did not outweigh the environmental damage it would cause.
As one investment website now puts it:
...in reality, Sirius is at last coming face to face with an unpalatable truth. Because it’s so big, at least in terms of UK mining projects, half of London’s mining investment community have become beholden to it in terms of fees or the hope of future fees.
That’s given the company a distorted vision of its own prospects for success, not to mention leading a fair few investors astray too.
But just look at the company’s share price over the past year or so. The shares have lost more than a third of their value in the past year. They were down more than 31% today at the open. The market knows what’s what.
Whether it’s “current” or not.
Sirius Minerals looks like joining the long list of mining companies that over-promise and under-deliver.

Sirius is the brightest star in the night sky... [however] There is little light at the end of the tunnel for Sirius investors. The stock has dropped 70 per cent during the past year. If the financing fails, Sirius could always seek a deep-pocketed investor such as Australian mining tycoon Gina Rinehart. But that might wipe out ordinary shareholders. Sirius has begun to resemble another astronomical phenomenon more than a star: a black hole.

Posted by
Labels:

Sunday, 7 April 2019

South West mining investment ‘highest in 40 years’

It's not the first time we've pointed to the quote from Mark Twain:
Men have long been drawn to shiny materials buried in the ground – often throwing caution to the wind, and losing vast fortunes for their backers as a result. Only last year, Australian prospectors Wolf Minerals – first attracted in 2007 to the deposits of tungsten and tin at Hemerdon near Plymouth, deposits discovered in 1867 but largely unworked since 1944 – ceased trading after losing more than £100 million in three years.

Clearly this episode has not put others off, not even Cornwall Council. Apparently, more money is being spent in the hope of restarting mines across the South West than at any point in the last 40 years.

Canadian mining firm Strongbow is nearly ready to empty flood waters from South Crofty, which has been closed since 1998, but still needs to raise about £100m more on the stock market before it can get as far as mining tin commercially… Cornwall Council is ready to invest £1m of public money to help the mine restart, as long as other investors come forward in sufficient numbers, too.
In east Cornwall, Anglo-Australian company Cornwall Resources has been test drilling for tin and tungsten at Redmoor mine in Kelly Bray, and they say results show that they're sitting on the largest undeveloped tin-tungsten deposit in the world.
An Australian-owned firm is hoping Cornwall will become the first European hub for lithium mining… "There's no production of Lithium in the whole of Europe, so if we can build a mine - which we believe we can - in Cornwall, this would give the UK a strategic advantage over the rest of the EU".
Posted by
Labels:

Friday, 1 February 2019

Drakelands’ fallout

In October of last year, Wolf Minerals – an Australian mining outfit and owner of the Drakelands tungsten and tin mine in Hemerdon near Plymouth – ceased trading and appointed administrators, after losing £100 million over the last three years.

Questions still hang over the future of the mine and the restoration of the scarred landscape. There were rumours of a rescue last year, but talks "hit a snag over the cost of restoring the land after its working life has finished." If there are plans for a rescue, there are currently no signs – as machinery continues to be taken off-site; see below.

But it’s not just the shareholders of Wolf Minerals that have lost millions. This week, UK mining operator Hargreaves Services took an £8.1m hit relating to Wolf’s failure:
A total of £5.1m of trade debt and work in process balances were written off, while the remaining £3m was made up of redundancy and other costs.
Commenting on the decision to work with Wolf, Hargreaves CEO Gordon Banham said:
They got a lot of funding. I think the team were quite right to take on a contract with a well funded business but unfortunately they couldn’t get the mining right.




Posted by
Labels: ,

Wednesday, 28 November 2018

Drakelands’ rescue – talks seek to reduce restoration bond

In October, we posted about the troubles of Wolf Minerals, how Drakelands Mine owner ceases trading and appoints administrators and asking Who would take on Drakelands?

Readers may remember that this was the mine that caused local residents to endure the "horrendous invasive unacceptable" impact of blasting and low frequency noise; we posted about this in What happened last time DCC approved a major minerals application?

Over £100 million has been poured into this failing venture. Question marks now hang over the future of the site, and its restoration. The Telegraph reports that a Swiss-based investment fund has shown interest in taking on the mine, but that:
… talks have hit a snag over the cost of restoring the land after its working life has finished… it is thought a trio of banks that are among Wolf’s secured creditors are wrangling over the size of a bond being held in account to pay for restoration of the site after mining has finished… Around £14m has been deposited for safekeeping but it is thought the banks - Unicredit, ING and Caterpillar - want this reduced to £11.5m.
In 2016, DCC had stated:
6.135 There is already in existence a restoration bond with Wolf Minerals which was required as a part of the original legal agreement associated with the 1986 planning permission…. The value of the bond was calculated by the Mineral Valuer in 2014 to be in the region of £15 million… the operator has already posted the full amount into an Escrow Account to ensure that the finance remains available for this purpose.
The Telegraph quotes Gary Streeter, MP for the area, as saying:
It’s very important to that local economy that this mine continues. We want to get the tungsten out, get the value from it, and put the countryside back together… I’m not in favour of reducing the bond but if it has to be reduced slightly to make this project work, then we’ll have to accept that - but that’s be to negotiated.
Not everyone will be happy that putting the Devon countryside back together – facilitated by a restoration bond lodged for safekeeping in an escrow account – is now up for negotiation, in order to appease various global banking interests.
Posted by
Labels: , ,

Friday, 19 October 2018

Another London-quoted Australian mining outfit runs into trouble

After the problems in Devon with Wolf Minerals and its Drakelands Mine, another Australian mining outfit, operating in Europe and promising untold riches, showed signs of coming unstuck this week, with its ASX shares suspended after Reuters reported "Spain to block Berkeley uranium mine project":
The Spanish government has decided not to deliver the permits necessary to open the European Union’s only open-cast uranium mine near Salamanca, dealing a serious blow to Australian mining company Berkeley Energia’s plans.
The project was granted preliminary approval in early 2013 but has since faced local opposition.
"The government will wait for the ongoing proceedings to go through but it will say no," a government source said on condition of anonymity.
Spain’s energy and environment ministry declined to comment. The Nuclear Safety Council had no immediate comment.
A second source, directly involved in the proceedings, said Berkeley was "living in a parallel universe" when it said the mine would soon become a reality.
Local opposition? In June, it was reported that "Thousands protest against uranium mine in Spain":
Spanish media are reporting that between 3,000 and 5,000 people hailing from different cities in Spain, as well as from Portugal and France, rallied this weekend in Salamanca to express their rejection to a uranium mine being built in the Retortillo municipality.
Posted by
Labels: ,

Sunday, 14 October 2018

Who would take on Drakelands?


With Wolf Minerals, the owner of Drakelands Mine near Plymouth, having ceased trading last week – after losing £100 million over the last three years – the Plymouth Herald reports that there were warning bells ringing at the doomed mine as early as March 2016. Auditors raised concerns that financial losses and cash outflows indicated:
... the existence of a material uncertainty that may cast significant doubt about the company and consolidated entity’s ability to continue as a going concern.
Some months later, despite such uncertainty and even though mine vibrations at Drakelands were a "living hell", DCC approved a planning application from Australian-based Wolf Minerals to extend operations to 2036, permitting permanent 24 hour operations seven days a week at the processing plant, after MD Russell Clarke made representations to the Development Management Committee.

It was good news for Wolf, but a few months later Mr Clarke stepped down from the top job, not tempted to move from his home in Australia. His successor, Richard Lucas, brought "18 years of financial experience" to the table, in return for a pay packet of £269,000 a year.

More funds were raised. Wolf’s last Annual Report was upbeat:
We look forward to a successful year ahead, with Wolf realising its potential as a significant tungsten producer in the western world.
Even as recently as July, Mr Lucas reported:
The June quarter operating performance regained momentum following the extreme cold weather in March, with several improving trends gathering strength and culminating in record monthly throughput in June. The additional volumes have provided a more stable operating environment which has driven tungsten recovery and product quality improvements.
In addition, the successful ore pre-processing trial results have encouraged the Company to accelerate an operating plan to enhance tungsten recovery and improve operating cashflows in the current strong tungsten market conditions, with the tungsten price reaching its highest level since 2014.
Shareholders, however, were not convinced, and were not willing to throw more money down the pan.

Now that Wolf Minerals has run out of money, and the restoration of a huge scar on the Devon landscape hangs in the balance, the question is: will any other mining company have the wherewithal to take on Drakelands and continue to run it as a going concern?

Mining analysts Martin Potts and John Meyer, speaking to the Plymouth Herald, made it clear that any white knight would need deep pockets:
The analysts said a failure to hit targets on how much tungsten was produced was key. But while Mr Potts said this was due to failures at the processing plant, Mr Meyer thought it was because poor quality ore was being mined.
Mr Potts stressed that Drakelands mine had a target to recover 65 per cent of tungsten from the ore it dug up. The firm never got near this figure, its best quarterly result being 56.6 per cent, and most of its recovery rates were hovering around the 30 per cent to 40 per cent range. Also, the plant was designed to handle three million tonnes of ore, but production had only crept up to the two million tonne mark, meaning not enough raw ore was coming out of the ground. Mr Potts said it was clear that targets were not being hit and said: “The plant does not work.” He said that saving the mine was therefore not merely a matter of new ownership and re-financing, but serious capital investment too. He said it would need a “complete re-think” by new owners on how to make the processing operation work. “They would need to do a lot of test work before they restarted it,” Mr Potts said.
Mr Meyer put the problems down to the grade of ore being mined. He said the company had begun by digging up the finer ore, at the surface of the opencast pit. While this is easier to reach, it is of a lower quality and doesn’t produce as much tungsten. “We think it’s more about the pit than the plant,” he said. “The recovery rates have been very low,” he said. “You should get recovery rates of 60 per cent but they have been getting only half of that.
Posted by
Labels: , ,

Wednesday, 10 October 2018

Drakelands Mine owner ceases trading and appoints administrators

In September 2015, the Hemerdon Tungsten and Tin Project in Devon was officially opened:
... attended by over 200 local and international guests and dignitaries, including representatives from the local community, UK Government, regulators, customers and shareholders, all of whom have played key roles in the successful delivery of the Project.
It was the first new metal mine in Great Britain for 45 years. DCC Leader Cllr John Hart said:
There is a long heritage of mining and quarrying in this part of the county and to mine one of the world's largest tungsten deposits will have a positive impact on the local and regional economy, which is good for jobs and the prosperity of Devon. It has taken some time for this project to come to fruition and the County Council has worked closely with Wolf Minerals to ensure the infrastructure and modern environmental controls required for the project are in place.
Even Aggregate Industries took a slice of the pie, benefitting from the construction of a new link road which took 6 months to build. But, as always, it was local residents who suffered the brunt of this new mine – particularly the "horrendous invasive unacceptable" impact of blasting and low frequency noise.

In the end, just three years on from all the hubris and fanfare, and as we posted only yesterday, all was not financially well with the owner Wolf Minerals. Today, workers have been sent home, police have been called on site, and the company has suspended its shares, announcing:
The Company has been unable to satisfactorily conclude its discussions with its key financial stakeholders and therefore is not in a position to meet its short term working capital requirements in order to continue operations at its Drakelands open pit mine. Consequently, the Company's wholly owned subsidiary, Wolf Minerals (UK) Limited, has ceased trading effective immediately.
Over £100 million has been poured into this failing venture and ever-expanding scar on the edge of Dartmoor. It was all to no avail; as one commentator remarked: "the economics of production at Hemerdon never really stacked up... rescue finance and bridging loans [were] needed, all in the hope that tin and tungsten prices would rise high enough to cover the embarrassment of Hemerdon’s complex geology and tricky processing."

But mining can be a financially precarious business. Those thinking of backing such ventures would do well to heed Mark Twain’s definition of a mine: "A hole in the ground with a liar at the top".

EDIT 11.10.18 Questions have been raised about the issue of restoring the site. In 2016, DCC stated:
6.135 There is already in existence a restoration bond with Wolf Minerals which was required as a part of the original legal agreement associated with the 1986 planning permission. Whilst the NPPF states that such bonds are only required in exceptional circumstances, the large scale nature of the development combined with the volatile markets in metal prices indicated that the public interest should be protected. The value of the bond was calculated by the Mineral Valuer in 2014 to be in the region of £15 million and whilst it was not necessary to do so until the project was at its maximum “exposure” calculated to be years 5-7 of the project, the operator has already posted the full amount into an Escrow Account to ensure that the finance remains available for this purpose.
DevonLive, on the other hand, reports:
The Environment Agency is to meet with bosses from Australian-owned Wolf Minerals (UK) Ltd to discuss what will become of the 850m by 450m wide opencast Drakelands pit, and who will pay for its eventual restoration to greenery.
Posted by
Labels: , ,

Tuesday, 9 October 2018

More trouble at Drakelands

You’d be forgiven for thinking – judging by the numbers – that this was a graph of the ever-depleting recoverable sand and gravel resource at Straitgate Farm: the one that started at 20 million tonnes in the 60s, and is now less than 5% of that number.


But it’s not. It’s a graph showing the economic wellbeing of a mining operation in Devon that was given the go-ahead by DCC a few years ago, specifically Wolf Minerals and its Drakelands open-cast tungsten mine just outside Plymouth, near Sparkwell and Hemerdon. We posted about this in July:
…as the share price of Wolf Minerals LSE:WLFE sank ever closer to zero, and the scar blighting Dartmoor looms ever larger, reality caught up with the company as it announced "a trading halt in its shares [on ASX] pending an announcement on its financing arrangements." In 2017, the company incurred a net loss after tax of A$74,536,641, or about £42m.
Earlier this month, Wolf had announced that fresh funds were required "to ensure that the company has sufficient working capital to meet its short-term requirements to continue as a going concern."
Residents, who have had to endure the "horrendous invasive unacceptable" impact of blasting and low frequency noise will no doubt be watching events closely – to see how much more money will be poured into this very big hole.
Wolf’s financial position is still precarious, with their shares down more than 25% at the time of writing, after this news:
As announced on 30 July 2018, the Company has been working with its key financial stakeholders to develop longer term funding solutions required to provide the Company with capital prior to the expiry of the standstill period on 28 October 2018, to progress further production improvements.
The Company's discussions with those stakeholders are ongoing and the Company expects to conclude those discussions this week, following which a further announcement will be made. However, should the Company not be able to satisfactorily conclude its discussions with those stakeholders within the next two days, it will not be in a position to meet its short term working capital requirements after that point in time.
There are ramifications for other companies, particularly Hargreaves Services who has warned:
... the Board estimates that the Group has a current net exposure of approximately £5m to Wolf comprising trade debt and WIP balances, some or all of which may prove to be irrecoverable were Wolf to be unable to continue trading. Redundancy and other associated costs may also result in a further non-recurring charge of up to £3m against Group profits in the current financial year. Additionally, if Wolf ceases to trade, this could reduce the Group's revenue in the balance of the current financial year by approximately £15m and its profit before tax by a further £1m.
Posted by
Labels: ,

Sunday, 29 July 2018

Drakelands Mine


Last year, we asked What happened last time DCC approved a major minerals application? We posted how DCC had approved a planning application from the Australian outfit Wolf Minerals to extend operations from 2021 to 2036 at its Drakelands Mine (an open pit tungsten mine just outside Plymouth, near the villages of Sparkwell and Hemerdon). We posted how the health impacts from "56 households and up to 103 individuals" from blasting and low frequency vibration were cast aside, after officers recommended approval talking about the reality of the situation:
The protection to be afforded to residents has to be balanced with the reality of the scale of this particular mining operation which is one of the largest mines in Western Europe.
We also posted how Wolf had submitted a new planning application for an explosives store, but that:
Looking beyond the health cost to local residents, it looks like Wolf Minerals could need more than a new explosives store to survive.
And indeed last week, as the share price of Wolf Minerals LSE:WLFE sank ever closer to zero, and the scar blighting Dartmoor looms ever larger, reality caught up with the company as it announced "a trading halt in its shares [on ASX] pending an announcement on its financing arrangements." In 2017, the company incurred a net loss after tax of A$74,536,641, or about £42m.


Residents, who have had to endure the "horrendous invasive unacceptable" impact of blasting and low frequency noise will no doubt be watching events closely – to see how much more money will be poured into this very big hole.

EDIT 30.7.18 Wolf Minerals today announced a "Senior Debt Deferral and Additional £4 Million Funding" which is:
expected to be sufficient to support Wolf's short-term working capital requirements until 28 October 2018, during which time the Company will undertake a strategic review of its funding arrangements.
Posted by
Labels: , ,

Tuesday, 26 September 2017

What happened last time DCC approved a major minerals application?

We’re referring to Wolf Minerals’ open pit tungsten mine just outside Plymouth, near the villages of Sparkwell and Hemerdon.

Wolf Minerals are an Australian mining outfit whose sole operation is the Drakelands Mine. Last November, DCC considered a planning application from the company to extend operations from 2021 to 2036. Sparkwell Parish Council responded to the application, and were:
Concerned about blasting and impact of vibration on people and their property. The application should be delayed or rejected until the unacceptable levels of disturbance to residents can be proven to be an extraordinary occurrence and not likely to re-occur. A track record of blasting impacts needs to be established... Current issues should be resolved before consent is granted for a further 15 years. Their own consultation has indicated health issues arising from lack of sleep caused by Low Frequency Noise (LFN) and additional information is required on this matter as 56 households and up to 103 individuals have stated that they are affected and are experiencing health impacts with more suspected outside the Parish.
Despite this, the officer’s report recommended approval:
The protection to be afforded to residents has to be balanced with the reality of the scale of this particular mining operation which is one of the largest mines in Western Europe. 6.64
And, although councillors heard first hand (41 minutes in) about the "horrendous invasive unacceptable" impact that blasting and LFN was having on the lives of local residents, the application was approved.

Wolf is now back with a new application. To rub salt into residents’ wounds, it’s for a new explosives store. Apparently:
There were difficulties involved in achieving ‘just in time’ delivery of the material, and on occasions blasts had had to be postponed.
So, have the impacts from blasting been reduced? Not if this article is anything to go by:
Cllr May said unfortunately villagers felt that ’nothing ever really changes’, and there had been a blast on the day of the meeting that had been ’really bad’… residents experienced things falling off shelves in their homes…
Looking beyond the health cost to local residents, it looks like Wolf Minerals could need more than a new explosives store to survive:
Martin Potts, analyst at FinnCap, said: "I’d be surprised if the tungsten price rise alone can save them. You’d have to say it’s going to be difficult. The question is: if at the end of this [turnaround] it’s not generating cash, then what happens next?"
Photo: Jeff Collins
Posted by
Labels: , ,

Wednesday, 26 October 2016

Consultants

It’s important to know who we’re up against. Aggregate Industries relied on consultants SLR for its last planning application for Straitgate. It didn’t go well. That application was characterised by a catalogue of errors, omissions and fabrications, such as this and this and this and this and this and this and this.

SLR’s been off the scene for some time now. Perhaps they were pushed? Perhaps they didn’t want the work anymore? Whilst AI obviously doesn’t mind having its dirty washing hung out online for all to see, perhaps it was too much for SLR?

If SLR doesn't return, the next application could see AI team up with David Jarvis Associates again. They've not only worked with AI on Venn Ottery and Blackhill, but claim to have "worked on over 285 quarries worldwide". They part authored a Quarry Design Handbook, required reading surely for anybody thinking of digging a large hole in the East Devon countryside. If AI had followed this guidance last time, it might have avoided some of the problems with site access:
… from the outset, it is necessary to establish who owns or controls the surface of the land within the proposed site boundary (including buildings, structures, uses or rights). No assumptions should be made and all documentation checked and verified… Ownership, and/or control (e.g. a lease or public land allocation or contract) needs to be established for ALL of the land which may be required for the proposed quarry operation including, for example, the mineral extraction area, access roads… 2.3
Local people might find pages 121-125 on public consultation interesting, the bit about "Engagement with people at a local level can bring the following benefits..." etc. It will be interesting to see what sort of job these experts make of Straitgate; interesting to see how much of that Quarry Handbook gets deployed.

In the meantime, Amec Foster Wheeler continues to be retained on groundwater matters, and continues to collect groundwater data from 13 boreholes across the area. Amazingly, this has now been going on for almost 4 years; read into that what you will.

It’s anybody’s guess how much money AI has sunk into the Straitgate project so far. Quarry companies worldwide would surely like to know what financial magic AI uses to make the numbers stack up - with less than 1 million tonnes of sand and gravel and a 50 mile round trip for processing. But then all miners start with rosy outlooks - just look at Wolf Minerals, and the problems it’s now having with its tungsten mine near Plymouth.
Posted by
Subscribe to: Posts (Atom)