(NAVER.COM) by Reporter CB Hong, Yeongwol (Korea) – With Secured Development Fund, Full-scale Development in April 2020, Commencement of Production in April 2022
Mr. Kim, Representative of Almonty Korea shows an ore containing high grade tungsten from the Sangdong Mine.
“Overcoming trials and errors in the early stage of Sangdong tungsten mine development, a treasure of Korea, we now can pronounce that the preparation stage is over”, “With the secured fund, the mine development will get into the new phase with a momentum to rebuild the pride of Yeongwol County people”, said by Mr. KIM Yong-woo (59), Representative of Almonty Korea Tungsten.
Until 2012, the development of the Sangdong tungsten mine was pursued by a Canadian, then an Australian company who left quietly after little progress. Since 2016, Almonty, a Canadian company, took over, changed its name to Almonty Korea Tungsten and has put spurs to the development.
Mr. Kim said, “Since July 2016, the development of the mine and funding have been progressed efficiently and systematically under the Almonty flag.” “With secured financing commitment in January, the project is now going to be expedited.”
Mr. Kim, who spends his daily life with mining and beneficiation engineers at the mining site, explained in a 100% convincing tone about the value, importance and the likelihood of success of the Sangdong Tungsten Mine.
He added, “The community people who have been disappointed over time will witness the visible progress in the development site from this year onwards.”
Interview
Q: Residents of Sangdong are disappointed by the sluggish development of the Sangdong Tungsten Mine for more than 7 years.
A: I regret and feel sorry for them about the delay. The earlier Canadian and Australian companies, owning no tungsten mine, were not competent developers. Their primary interest was to increase share value. Their lack of technical expertise and consequent failure of securing development fund had made the development to drift over 6 years. Almonty however is a specialized global tungsten mine developer and operator owning 4 tungsten mines in Spain, Portugal and Canada.
For this reason, the members of the County Congress were invited to Almonty mines in Spain and Portugal. I am convinced of the successful mine development under Almonty’s business mind, development plan and initiatives. You can trust on Almonty’s technical skills and capability. The overall picture is now completed which will surely lead us to the successful development.”
Q: We are curious about the value of Sangdong Tungsten Mine
A: The economically feasible tungsten deposit in the Sangdong Mine, confirmed through the extensive drilling by Korea Resource Corp (under the previous name of Korea Mining Promotion Corp), is over 58 million tons. Assuming 1 million tons mining per year, it will be mined over 58 years. This was also validated by international accredited evaluation agencies. More, the average grade of Sangdong tungsten is 0.45 ~ 0.5% which is one of the highest in the world and over 2.5 times of the global average of 0.18%.
The characteristics and strategic value of the Sangdong tungsten are immense. The Sangdong tungsten deposit is huge with 20 ~ 60 meters of vein width in Hanging Wall and 10 ~ 12 meters in Footwall. This compares with Chinese tungsten mines, which is known to have the world’s largest reserve, whose vein width typically ranges 50-100 centimeters, providing us with incomparable advantages.
Q: Such distinct advantages are first to know
A: Likewise, the production cost of Sangdong is less than 50% of that of Chinese mines albeit lower labor costs in China. There is no concern for supply of tungsten, the critical material for high value-added industries, domestically and overseas. Tungsten is recognized as a key material for the fourth industrial revolution. The world and related industries are paying close attention and competing for the stable supply of this critical material needed for semiconductors, steel, energy, LEDs, and LCDs, as well as automotive and aerospace industries.
Korea has been so ignorant in recognizing this treasure of the country. Sangdong tungsten will surely contribute to the country, population inflow into the region and vitalization of local economy in Yeongwol. POSCO E & C, a subsidiary of the POSCO Group which was established by Korea Tungsten in collaboration with the Korean government, will participate in the project with a mission to rebuild its parent.
Q: Please explain the secured funding for mine development.
A: Promptly after Almonty’s acquisition of Sangdong Mine, we contacted a Korean state-owned bank for development fund. That government bank promised to provide financing in 2016, then unilaterally cancelled the commitment with no apparent reason in the following year. It made us to turn to overseas. This was because domestic banks and investors are reluctant to lend or invest in mine development projects after the massive failure of investment in overseas resources under the MB regime. It is truly regrettable to see such political reasoning is still rampant in the mine financing.
Fortunately, a legally binding senior project financing loan commitment was secured from the German government bank, KFW IPEX-Bank, for US$ 76 million (approximately 89 billion Won). The German bank visited the site in November last year. It was disclosed by the company’s parent company, Almonty Industries, listed on the Toronto Stock Market in Canada, on January 24. The loan is estimated to be available from April. The site is full of confidence, and all employees are gearing up the development efforts with conviction.
Q: I heard that a test plant was built before the construction of the main plant
A: Before the commencement of the main beneficiation plant construction, a pilot plant was built and in operation in a scale of 1/1000 since July last year for testing. It is only 500 square meters (150 Pyeong), but it has all the facilities needed for the beneficiation and flotation process. Ore crushing, grinding, removal of contaminants (impurity material), extraction of tungsten and compression are being done. As the melting point of tungsten is 3,422 degree Celsius, the final product is produced in powder. Crushed ore is milled to fine particle size of 75 microns or below. Subsequently, a 6-stage flotation process is conducted including removal of impurities such as sulfides, extraction of tungsten, and compression and drying. It is easy to understand that the pilot plant was built and tested to minimize trials and errors in the main plant.
Q: How the construction of tungsten beneficiation plant will be progressed?
A: The main plant of beneficiation including crushing, milling and flotation is expected to be built between April this year and September 2021. The trial production will follow for 6 months allowing the production of tungsten concentrate powder in April 2022. The development costs are estimated at 10 billion Won for building underground drifts for mining and over 80 billion Won for the construction of the processing plant. In the meantime, we have been carrying out the preparatory works such as demolition of structures, plant design, pilot plant operation, and modern drift development.
A daily average of 300 workers are estimated during constructions and approx. 250 people will be employed for the operation including mining crew. In particular, all the facilities will be built satisfying the stringent European environmental standards including the Equator Principles. I’d like to reiterate that, upon the request of the European lenders, environmental facilities are designed and will be built in compliance with the international standards which are much more demanding than the Korean standards.
Q: What else would you like to say?
A: Everybody in Korea knows that Japan developed the Sangdong tungsten mine to exploit resources and that Korea Tungsten led the economic development of Korea by exporting huge amount of tungsten. Fortunately, much more tungsten reserves remain than the amount mined so far. The unfortunate mine closure in early 1990s due to the cheap Chinese tungsten flooding the market is now turning into a blessing.
Mr. KIM, Representative of Almonty Korea, explains the process at the pilot plant on the 12th
Tungsten is appearing on the surface of the Sangdong ore when mineral light is shed.
A large Korean company producing high-tech materials invested a substantial amount into Vietnam to secure tungsten. Sangdong Mine has more than five times of the reserves of Vietnamese tungsten mine and the quality and mining conditions of Sangdong are much more favorable. The importance of securing scarcity minerals has been highlighted since the trade disputes with Japan last year. The planned promulgation of the special decree in April for ‘Material, Components and Equipment Industries’ would also be helpful.
Together with lithium, cobalt, nickel, and manganese, tungsten was included in the 5 Critical Minerals for the country. Developed countries and global resource institutions also see tungsten as an endangered mineral resource. We are putting all-out efforts to make the treasure of Sangdong to become the treasures of Korea, which will contribute to the enhancement of national competitiveness in the era of intensifying resource war. Through the successful completion of the mine development, we will repay for all the supports and encouragement in the surrounding area.
Mr. KIM Yong-woo is an expert in resource, construction and shipbuilding with 25 years in domestic and overseas IB fields such as Morgan Stanley, Salomon, Citigroup and KB Securities. His specialties include global securities and fixed income, cross border investment, mergers and acquisitions, project financing and corporate restructuring.
He has been involved in development, investment and operation of resource projects in Korea. He was CEO of Sangdong Mining from 2010 to 2013 and has been Country Representative of Almonty Korea since 2015.
By Hong Chun-bong (Youngwol) (casinohong@naver.com)
About Almonty
The principal business of Toronto, Canada-based Almonty Industries Inc. is the mining, processing and shipping of tungsten concentrate from its Los Santos Mine in western Spain and its Panasqueira mine in Portugal as well as the development of its Sangdong tungsten mine in Gangwon Province, South Korea and the development of the Valtreixal tin/tungsten project in north western Spain.
The Los Santos Mine was acquired by Almonty in September 2011 and is located approximately 50 kilometres from Salamanca in western Spain and produces tungsten concentrate. The Panasqueira mine, which has been in production since 1896, is located approximately 260 kilometres northeast of Lisbon, Portugal, was acquired in January 2016 and produces tungsten concentrate.
The Sangdong 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, was acquired in September 2015 through the acquisition of a 100% interest in Woulfe Mining Corp.
Almonty owns 100% of the Valtreixal tin-tungsten project in north-western Spain.
Further information about Almonty’s activities may be found at www.almonty.com and under Almonty’s profile at www.sedar.com.
Legal Notice
The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions.
Disclaimer for Forward-Looking Statements
When used in this press release, the words “estimate”, “project”, “belief”, “anticipate”, “intend”, “expect”, “plan”, “predict”, “may” or “should” and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. These statements and information are based on management’s beliefs, estimates and opinions on the date that statements are made and reflect Almonty’s current expectations.
Forward-looking statements in this press release include, but are not limited to, statements regarding the expected use of proceeds of the Debenture Offering. The forward-looking statements and information in this press release include information relating to the intentions of management. Such statements and information reflect the current view of Almonty with respect to risks and uncertainties that may cause actual results to vary. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Almonty to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: the receipt of all required approvals, unanticipated costs and expenses, general market and industry conditions and perational
risks, including large project risk and contractual factors, any specific risks relating to fluctuations in the price of ammonium para tungstate (“APT”) from which the sale price of Almonty’s tungsten concentrate is derived, actual results of mining and exploration activities, environmental, economic and political risks of the jurisdictions in which Almonty’s operations are located and changes in project parameters as plans continue to be refined, forecasts and assessments relating to Almonty’s business, credit and liquidity risks, hedging risk, competition in the mining industry, risks related to the market price of Almonty’s shares, the ability of Almonty to retain key management employees or procure the services of skilled and experienced personnel, risks related to claims and legal proceedings against Almonty and any of its operating mines, risks relating to unknown defects and impairments, risks related to the adequacy of internal control over financial reporting, risks related to governmental regulations, including environmental regulations, risks related to international operations of Almonty, risks relating to exploration, development and operations at Almonty’s tungsten mines, the ability of Almonty to obtain and maintain necessary permits, the ability of Almonty to comply with applicable laws, regulations and permitting requirements, lack of suitable infrastructure and employees to support Almonty’s mining operations, uncertainty in the accuracy of mineral reserves and mineral resources estimates, production estimates from Almonty’s mining operations, inability to replace and expand mineral reserves, uncertainties related to title and indigenous rights with respect to mineral properties owned directly or indirectly by Almonty, challenges related to global financial conditions, risks related to future sales or issuance of equity securities, differences in the interpretation or application of tax laws and regulations or accounting policies and rules of the TSX.
Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to, the receipt of all required final approvals, no unanticipated delays in the project financing, no material unanticipated costs and expenses, no material adverse change in general market and industry conditions and no unanticipated material operational risks, including large project risk and contractual factors, no material adverse change in the market price of APT, the continuing ability to fund or obtain funding for outstanding commitments, expectations regarding the resolution of legal and tax matters, no negative change to applicable laws, the ability to secure local contractors, employees and assistance as and when required and on reasonable terms, and such other assumptions and factors as are set out herein. Although Almonty has attempted to identify important factors that could cause actual results, level of activity, performance or achievements to differ materially from those contained in forward-looking statements, there may be other factors that cause results, level of activity, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate and even if events or results described in the forward-looking statements are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, Almonty. Accordingly, readers should not place undue reliance on forward-looking statements and are cautioned that actual outcomes may vary.
Investors are cautioned against attributing undue certainty to forward-looking statements. Almonty cautions that the foregoing list of material factors is not exhaustive. When relying on Almonty’s forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events.
Almonty has also assumed that material factors will not cause any forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE REPRESENTS THE EXPECTATIONS OF ALMONTY AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE ALMONTY MAY ELECT TO DO SO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.
For further information, please contact:
Lewis Black
Chairman, President and CEO
Telephone: +1 647-438-9766
E-mail: info@almonty.com
The head office of Almonty is:
100 King Street West
Suite 5700
Toronto, Ontario
M5X 1C7
