The Hemerdon project is fully funded, commissioning is underway and it remains on schedule to deliver production for on-time delivery to its off-take partners in the third quarter of 2015.

The project, known locally in the UK as the Drakelands mine, is a project of global significance whose production is expected to account for around 3.5% of global tungsten demand in 2016.

It is also of significant benefit to the UK and local economies. There are currently more than 400 people working on site, and during its operational phase the project is expected to generate around 300 jobs and an annual salaries bill in the order of £10-13 million.

The project's tungsten output is 80% secured by off-take agreements with Global Tungsten Powders and Wolfram Bergbau und Hutten and, along with tin production, will generate big revenues for the company and export earnings to the UK.

Hemerdon is located in Devon County, in an established mining area, and there are substantial china clay operations nearby. It is situated around 10km from the major town of Plymouth, which has a population of 250,000 and provides a readily available workforce.

The project itself is defined by an 800m-long by 400m-wide by 260m-deep open pit, with a low life-of-mine strip ratio, which will support an initial 10-year mine with 3 million tonnes of ore mined each year under the existing planning permission.

There also exists a number of opportunities to expand the project, which Wolf is progressing in parallel with the project's construction.

The orebody is open at depth and also hosts extensions to the south, and the company is pursuing opportunities to access new reserves in these areas to extend the operation's mine life.

Wolf recently reported a 34% increase in ore reserves, achieved as a result of a diamond drilling program which targeted the perimeter of the open pit. It was successful in confirming that the open pit walls could be steepened, resulting in a pit around 65m deeper and able to deliver increased ore reserves.

The new ore reserve is 35.7Mt at 0.18% tungsten trioxide (WO3) and 0.03% tin, reported above a 0.05% tungsten (0.063% WO3) cut-off.

Wolf managing director Russell Clark said the increase in ore reserves was very pleasing news.

"The 34% increase in ore reserves, which has resulted from steepening the open pit walls within the existing planning permission boundary, is effectively an increase in mine life of 34% or around three years, assuming a five and a half day working week," Clark said.

The company will also investigate possible underground mining options to access resources at depth, below the existing pit.

Wolf recently received temporary approval from the Devon County Council for 24-hours-a-day, seven-days-a-week operations at the project. Previously, the primary crusher was restricted to operating for only 5.5 days per week.

The increased operating hours are for a six month trial period, after which the company will apply to make the change permanent. This will increase available operating hours by more than 27%, providing the opportunity to deliver significant additional production with no further capital expenditure while also lowering operating costs.

"We recognise the valuable support from Devon County Council and the community in making this a successful start-up," Clark said

"Commissioning is always challenging and it will be considerably easier if we don't need to schedule downtime every weekend for a day and a half. The processing plant will run far more efficiently working steady ... and we can schedule maintenance periods when we need them rather than when the plant has been turned off as part of a planning permission requirement."

Wolf is assessing the potential to deliver increased production through improved recoveries, which currently stand at 66%. It may also explore the potential to derive additional revenue from the sale of construction aggregate from the project area.

Construction of the project is nearing completion. At the end of March it was 85% complete. Total development expenditure in the March quarter was $A24.4 million, which largely related to work undertaken by engineering-procurement-construction contractor, GR Engineering Services, and mining contractor, C A Blackwell.

An update on construction progress revealed that all structural concrete pours were complete and structural steel erection was 97% complete. The majority of plant equipment is installed within the processing plant buildings and high voltage power is connected to site.

The administration building has been completed and staff have relocated to site from Wolf's Plymouth office. Laboratory fit-out is underway and will be commissioned by the end of the second quarter. A laboratory manager and personnel have already been employed.

Construction of the mine waste facility, which will accommodate waste from the mine and processing plant, is on schedule to be available for planned plant commissioning.

Also, development of the open pit continues with excavated waste being utilised in the construction of the mine waste facility. Interestingly, there is no overburden removal required to access the orebody as it is exposed at surface. The run-of-mine ore pad is to be constructed in the second quarter 2015.

Recruitment of key staff is ongoing, with the company now having 39 employees working directly for Wolf Minerals (UK).

Wolf has also been recommended for ISO 14001 certification for its environmental management systems at Hemerdon. The implementation of an environmental management system is a condition of the Environment Agency's permit for the project and is required to be in place prior to the commencement of ore processing.

"We are in the midst of an exciting time in the project's development. Commissioning at the project has commenced, our staff have relocated from Plymouth to the completed administration office on site, and we plan to be introducing ore into the plant in July 2015," Clark said.

"The project remains on schedule and fully funded through to positive cash flow, and we now look forward to advancing the project through to completion."

With first production looming, it is also time to consider the outlook for the tungsten market. Although the tungsten price has retreated from long-term highs of recent years, the outlook remains strong.

According to independent researchers at Argus Research Group, the tungsten price is forecast to strengthen over future years which would coincide with Wolf's production timeline at Hemerdon.

Global demand is currently around 90,000t per annum, with approximately 30% of this coming from recycled material. This gives rise to the need for new supply to come on line to meet demand.

Wolf's Hemerdon project is the only project currently under construction and will be the next global source of tungsten supply to come on line.

Existing tungsten stockpiles are being depleted and current producers may not have the capacity to increase production. Most significant tungsten development projects are up to two years away from production, which further enhances Wolf's window of opportunity within the market.

Tungsten demand growth has exceeded GDP growth for the past 10 years. It is hard, heavy, non-corrosive and has an extremely high melting point and is critical to industrial, mining and agricultural production as it has no substitute.

Corporately, Wolf has the benefit of strong, ongoing support of cornerstone investors: Resource Capital Funds, Todd Corporation and Traxys Projects. RCF recently demonstrated its continued support via the exercise of options.

Looking ahead, the company will focus on completing and commissioning the processing plant before preparing for production at what will be the first new metals mine in the UK in over 40 years.

*A version of this report, first published in the May-June 2015 edition of RESOURCESTOCKS magazine, was commissioned by Wolf Minerals.