Wolf Minerals (WLFE.L) Investec Securities Price: GBP 18.5 | Target: GBP 31.6 | Rec: Buy A limitation of WLFE’s Hemerdon project, under the current mining plan, is the relatively short mine life of approximately nine years.

However, the development plan represents an initial base case development scenario, and there are several opportunities to extend the life beyond this and thereby realise additional value, some without incurring any significant additional capital costs. ¢ Near-term opportunities include extended planning permission to enable WLFE to extract resources currently not in reserves and a two-stage pit development, with steeper final pit walls to enable deeper ore extraction.

These both provide relatively straightforward opportunities.

Longer-term upside could come through targeting known depth and strike extensions of the mineralisation, and through extracting metal from the mineralised country rocks. ¢ Our revised target price of 32p per share is now underpinned by a risked, equity-diluted NPV model.

Our previous target price of 35p was based on a peer group comparison, with WLFE valued on an EV per ton of contained metal basis.

Increases to our near-term operating losses reflect higher assumed corporate charges, as Hemerdon is brought into production.

¢ Our NPV incorporates a valuation for Hemerdon of £161m, which is then risked to 60%, i.e., to £97m, pending project construction.

Given the critical funding requirement, we dilute for an assumed equity raising of A$69m (£45m) at a 10% discount to market.

Under this scenario our diluted, risked valuation equates to 32p per share, the basis of our target price. ¢ An extension of the planning permission would increase this risked NPV to 37p.

A further three-year extension, through a two-stage pit, would add another 18%, for a risked NPV of 42p.
To access the full note please click here Analyst: Hunter Hillcoat To receive further information or change your Research Preferences please email: South Africa or United Kingdom IMPORTANT NOTICE: This communication forms part of an electronic communication sent to the intended recipient (or such persons authorised representative) for their sole use and is subject to important legal and regulatory restrictions, qualifications and disclaimers ("the disclaimer") that may be accessed and read by clicking on the following hyperlink:http://www.investec.co.uk/about-investec/what-we-do/investment-banking/investec-securities/company-research/morning-meeting-comments.html or copying the address into your Internet browsers address bar.

If you cannot access the disclaimer, please obtain a copy thereof from us by sending an e-mail to in the case of SA or in the case of UK: The disclaimer is deemed to form part of the information in this communication.

This communication is confidential for the information of the addressee only (or such persons authorised representative) and may not be reproduced in whole or in part, copies circulated, or disclosed to another party, without the prior written consent of Investec Securities Limited.

In particular, the Investec Group of companies does not allow the redistribution of this report to non-professional investors and cannot be held responsible in any way for third parties who effect such redistribution.

If you are not the intended recipient of this e-mail (or such persons authorised representative), then: (a) please notify the sender of this e-mail immediately by return e-mail, facsimile or telephone and delete this message from your system; (b) you may not print, store, forward or copy this message or any part thereof or disclose or cause information in this message to be disclosed to any other person.

The information in or attached to this e-mail message is confidential and may be subject to legal privilege and client confidentiality.

Nothing in this message constitutes an offer, warranty or representation from us.

While we are entitled to rely on and hold you to your offers, warranties, representations or other statements made in or attached to this message, our employees or representatives may not conclude agreements or otherwise bind our company via e-mail.

We cannot be held liable for any harm or loss resulting from malicious software code or viruses in this message or attachments, including data corruption resulting therefrom.

None of our employees or representatives are permitted to send unsolicited messages ("spam") and our company cannot be held liable therefore.

If you regard this message as spam, please inform us immediately by sending an e-mail to in the case of SA or in the case of UK: Unless otherwise agreed: (a) We are only deemed to have received an e-mail once we have confirmed receipt thereof to you; (b) We are deemed to have sent an e-mail once reflected as “sent” on our e-mail server.

If this message contains offensive, derogatory or defamatory statements or materials, it means the message has been sent outside the sender’s scope of employment with us and only the sender can be held liable in his/her personal capacity.

Our corporate information and names of our office bearers can be accessed by sending an e-mail to in the case of SA or in the case of UK: This disclaimer applies to our original message, any attachments and all subsequent messages or attachments we may send. ________________________________ Before acting on this e mail or opening any attachment please read the disclaimer which can be accessed at http://www.investec.com/global-email-disclaimer Investec Bank plc is authorised and regulated by the Financial Services Authority.

Calls may be monitored and recorded. This e-mail has been scanned for viruses by MCIs Internet Managed Scanning Services - powered by MessageLabs.

For further information visit http://www.mci.com Investec Bank plc Registered office: 2 Gresham Street, London, EC2V 7QP Company No: 00489604 Incorporated in England and Wales
-------------------------------------------------------------------------------- CONFIDENTIALITY NOTICE AND LEGAL LIABILITY WAIVER: The content of this email and any attachments are CONFIDENTIAL and may contain privileged information.

If you are not the addressee it may be UNLAWFUL for you to read, copy, distribute, disclose or otherwise use the information contained herein.

The content of the message and or attachments may not reflect the view and opinions of the originating company or any party it is representing.

If you are NOT the intended recipient then please email back to ------------------------------------------------------------------------------------