US$82 million funding package for Hemerdon

7 December 2012

Wolf achieves US$82 million funding package for Hemerdon

Wolf Minerals Limited (ASX: WLF, AIM: WLFE) ("Wolf" or the "Company") is pleased to announce that it has entered into a binding agreement with Resource Capital Fund V L.P. ("RCF") for RCF to provide a funding package of US$82 million to be utilised to further develop the Hemerdon Tungsten and Tin Project in Devon, Southwest England.

The funding package will comprise the following:

The funding package will allow Wolf to continue the development of the Hemerdon Project and commence its construction.

The funding package can be used to repay the existing facility provided to Wolf by RCF (as announced on 26 August 2011) plus fees and expenses associated with the Bridge Facility.

The Bridge Facility has a maturity date of 12 months from the date of satisfaction (or waiver by RCF) of conditions precedent for the initial draw down, and Bridge Facility monies are payable in full on the maturity date. The Bridge Finance facility is secured on the Company's Hemerdon Project and prevents the Company from drawing down any further debt until it is repaid in accordance with its terms.

The fees associated with the Bridge Facility are as follows:

·; An Establishment Fee of 3% of the Bridge Facility amount, payable on commencement through the issue of Wolf shares (at A$0.27 per share);

·; A fixed coupon rate of 6% per annum, payable quarterly in arrears on drawn funds in cash or Wolf shares (at Wolf's election);

·; A Commitment Fee of 6% per annum on any undrawn portion of the Bridge Facility, payable in cash or Wolf shares (at Wolf's election); and

·; An Acceptance Fee of 3.2 million options issued to RCF with a three year term from the date of issue with an exercise price of 120% of Wolf's prevailing volume weighted average share price.

There are no penalty fees for early repayment of the Bridge Finance Facility.

The amount available for drawdown under the terms of the Bridge Facility will initially be limited to US$40 million (A$38 million) until such time as Wolf has received all material permits, licences and approvals necessary to commence construction and operation of the Hemerdon Project. The further US$35 million (A$34 million) of the Bridge Facility is available upon obtaining the required permits.

The initial US$40 million of the Bridge Facility will be utilised by the Company for the purchase of properties required to be purchased by Wolf under the terms of the Hemerdon Project's planning permission, design engineering, procurement, owner's development costs and general working capital.

In return for a consideration of US$7 million, Wolf will grant to RCF a Royalty that equates to 2% of gross revenues from all metals and minerals produced from the Hemerdon project and shares in the security with the Bridge Facility and senior debt lenders previously announced by the Company, subject to agreed intercreditor arrangements.

The Bridge Facility and Royalty will be subject to completion of relevant documentation, satisfaction of typical conditions precedent for financings of this nature, including executed offtake and senior debt facility agreements and shareholder approvals.

In addition, the Bridge Facility is subject to the Company raising A$20 million in equity. The Company is in advanced negotiations with strategic investors to achieve this requirement.

A notice of meeting for the required shareholder approvals, including an independent expert's report, will be released in due course for a meeting to be scheduled in late January 2013.

Commenting on the funding package Wolf managing director Humphrey Hale said:

"We are delighted to secure this funding package with RCF to further progress the Hemerdon project. We welcome the continued support of RCF in our goal to develop the project in to a globally significant new source of tungsten supply, and we now look forward to moving forward with our mine development and construction plans."

Related Party Transactions

RCF is considered to be a Related Party as defined in the AIM Rules by virtue of the fact that they are a Substantial Shareholder. As a result, the entering into of the Royalty Agreement and the Bridge Facility are deemed to be Related Party Transactions (the "Related Party Transactions").

The Company's board of directors (excluding Chris Corbett, who is a representative of RCF) (the "Independent Directors") considers, having consulted with the Company's Nominated Adviser, that the terms of the Related Party Transactions are fair and reasonable insofar as shareholders are concerned.

About Resource Capital Fund

RCF is a mining focused private equity fund which is managed by RCF Management L.L.C. which has its principal office in Denver and financial offices in New York. RCF Management pioneered the concept of mining private equity and through its Funds has provided financial support to more than 112 mining companies involving mining projects located in 39 different countries and relating to 27 different commodities. It currently manages assets of approximately US$1.7 billion. RCF is Wolf's largest shareholder.

ENDS

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