Mr. Brian Wesson reports

WOULFE MINING REPORTS NPV US$400M WITH 46% IRR SANGDONG FEASIBILITY

Woulfe Mining Corp. has released the results of a National Instrument 43-101-compliant feasibility study for its 100-per-cent-owned Sangdong mining project, located in South Korea.

Brian Wesson, chief executive officer and president, commented, "This robust feasibility study marks a significant milestone in the development of the Sangdong tungsten project, and sets in motion our strategic partnership with IMC and the finalizing of the funding for the entire project, moving to production 2013."

Preface

TetraTech WEI Inc., an independent engineering company with extensive experience in mining and tungsten, conducted the feasibility study and has concluded as follows:

• Net present value (NPV) at 8 per cent -- $400.3-million (U.S.);
• Internal rate of return (IRR) -- 46 per cent;
• Break-even -- 2.2 years;
• Initial capital -- $151.3-million (U.S.) (includes contingency and capital associated with stockpiling 200,000 tonnes of preproduction ore of 7.5 per cent).

The feasibility study is based on mining 1.2 million tonnes from the Main and Footwall orebodies above the valley floor (probable tungsten reserve of 13.3 million tonnes at 0.425 per cent tunsten trioxide (WO3) with a cut-off of 0.24 per cent WO3). The feasibility considers a window of an 11.5-year mine life based on reserves. Infill drilling is continuing in the eastern hangingwall and western extensions of all three mineralized zones above the valley floor, with a view to further upgrading the 53.9 million tonnes of inferred resources and extending the mine life.

The ore will be mined by mechanized drift and fill methods, trucked to surface, crushed through a two-stage crushing circuit, and delivered to a fine-ore bin. Comminution is via a primary rod and secondary ball mill that grinds and feeds the ore to a sulphide molybdenum/bismuth flotation circuit. The tail of the sulphide float is then processed through a WO3 oxide float at a recovery of 85 per cent of the tungsten in concentrate. The concentrate is then processed through an ammonia para tungstate (APT) refining plant to produce approximately 400,000 metric tonne units (MTUs -- 10 kilograms, equivalent to 4,000 tonnes) of WO3 per year in the form of APT, which is then sold for the manufacture of hard-metal tooling.

The feasibility study further makes provision for the extraction of byproduct molybdenum and bismuth in a sulphide concentrate circuit. However, no value has been attributed to the recovered metal, as the downstream process for the concentrate is still in a design stage. Further, it was believed prudent to include the capital and mining costs for owner mining; however, it is likely that one of the many tunnelling contract companies in Korea will be used to develop the mine at a substantially lower unit cost. This has not been considered as tenders were not available at the closing date for the feasibility study inputs.

Summary of feasibility

The feasibility study was prepared under the direction of Tetra Tech, an industry-leading international engineering firm, supported by a globally recognized feasibility study team, all of which are independent of the company, including:

• Hanmi Global, responsible for the capital cost estimate (CCE) and construction of the comminution circuit and scheelite recovery plant;
• Biernacki and Elvish Enterprises Pty. Ltd. (B E Enterprises), for the APT plant CCE and capital and construction cost;
• Roskill Information Services Ltd., for tungsten marketing and future price prediction;
• Turner Mining and Geotechnical Pty. Ltd., for the geotechnical design of the underground mine;
• Australasia Pacific Environmental Consultants (APEC), for the environmental impact study.

The feasibility study builds upon the technical and economic criteria established during the prefeasibility stage undertaken by Tetra Tech, and confirms the technical and financial viability of constructing and operating a 1.2-million-tonne-per-year underground tungsten mine, including a process plant and an APT plant to produce an APT final product.

                  HIGHLIGHTS OF THE FEASIBILITY STUDY                                         
          (all amounts in U.S. dollars unless otherwise stated)                                

Indicated resource                                                          
Probable tungsten reserves at 0.425% WO3 (Mt)                           13.3
Life of mine at 1.2 mtpa                                          11.5 years
Annualized MTUs of WO3 produced                                      400,000
Initial capital expenditure (US$ millions)                             151.3
Capitalized predevelopment for mining operations (including                
stockpiling) (US$ millions or per tonne)                                15.8
Operating cost per tonne ore                                           61.84

First ore accepted to the process plant is targeted for 2013 following a 15-month construction phase beginning in 2012. Probable mineral reserves of 13.3 million tonnes of ore grading 0.425 per cent WO3 results in an 11.5-year mine life. Initial capital costs are estimated to be $151.3-million (U.S.), including a predevelopment cost of $8.2-million (U.S.) and including a contingency of $7.8-million (U.S.).

Mineral resources

Following completion of the phase 2 drilling and further historical data compilation at the Sangdong mine, Tetra Tech has estimated the mineral resource above the valley floor (the upper section) as given in the accompanying table. Woulfe is continuing to drill and explore within the accessible working areas to refine the resource.

         MINERAL RESOURCE FOR THE UPPER SECTION OF THE SANGDONG MINE

Resource                                         WO3        MoS2             
category              Tonnes     Density          (%)         (%)        MTU

Indicated         16,431,000        3.04        0.45        0.04   7,387,000
Inferred          19,368,000        2.92        0.44        0.05   8,475,000

Cut-off grade of 0.15 per cent WO3                                   

The mineral resource below the valley floor at the mine (the lower section) is all within the inferred category, and is estimated as given in the accompanying table.

         MINERAL RESOURCE FOR THE LOWER SECTION OF THE SANGDONG MINE

Resource                                         WO3        MoS2             
category              Tonnes     Density          (%)         (%)        MTU

Inferred          34,519,000        2.85        0.47        0.07  19,685,000

Cut-off grade of 0.15 per cent WO3                                                

Mineral reserves

Probable reserves are the economically minable portions of the indicated mineral resources as demonstrated by scheduling the mining of the Main and Footwall zones using transverse drift-and-fill mining. The probable reserve is as shown in the accompanying table.

                                                             Ore         WO3 
Classification                                               (Mt)         (%)

Proven                                                         0           0
Probable                                                    13.3       0.425
Proven and probable                                         13.3       0.425

Cut-off grade of 0.24 per cent WO3                                                     

Mining

Sangdong is an underground mine that was formerly worked from the 1930s to 1992, when it closed due to the low tungsten price. The mining method selected had to be a very flexible design to accommodate mined-out areas, but suited to high-productivity, trackless mining. The three subparallel mineralized zones, the variable dip and the previously mined-out areas ruled out many options. Drift-and-fill mining was identified as the optimum method, and a number of variations were assessed from mining on true dip, on apparent dip and horizontally. After a detailed review, transverse drift-and-fill mining proved to be the most viable method.

Processing

Ore will be hauled from underground in 40-tonne trucks to the primary crusher at a nominal rate of 3,500 tonnes per day. Following the primary crusher, the ore will be conveyed through a secondary crushing circuit to a final crush size of 13.5 millimetres and conveyed to a fine-ore bin. The ore is then milled in two stages via rod and ball mill circuit to a target grind of 75 microns. Thereafter, a bulk sulphide flotation step is undertaken for the production of a combined molybdenum and bismuth concentrate (containing gold) that will be set aside for future processing. The sulphide flotation tails are then subjected to a two-stage flotation process using a modified Petrov cycle for the recovery of a scheelite concentrate. Testwork to date has demonstrated 85-per-cent recovery and a grade of 67 per cent WO3. The scheelite concentrate is then transferred to the APT plant, where it is subjected to a sodium carbonate leach for the recovery of tungsten and byproduct metals in order to produce standard-grade APT for sale.

Infrastructure

The project is well supported by local infrastructure, having been the site of an active mine. Local road networks are of high quality. Two new 10-megavolt-ampere power lines will be installed by Korea Electric Power Corp. (KEPCO) by the end of 2012. The site has sufficient power and an abundance of water for construction purposes.

Capital costs

The initial capital cost for Sangdong is estimated (in first quarter 2012 dollars) at $151.3-million (U.S.), with an accuracy of plus/minus 15 per cent, including a contingency of $7.8-million (U.S.). The contingency allowance was calculated to be 7.5 per cent of direct costs. Life-of-mine sustaining capital costs are estimated at $58.2-million (U.S.).

                     INITIAL CAPITAL COST ESTIMATE                                               
     (all amounts in millions of U.S. dollars unless otherwise stated)                       

Mining                                                              $   27.7
Paste-fill plant                                                    $    6.4
Process                                                             $   56.8
Ancillaries                                                         $    6.7
Power supply and distribution and water                             $    5.8
Owner's costs                                                       $    3.3
Indirect costs                                                      $   36.8
Contingency                                                         $    7.8
Total directs, indirects, contingency and owner's costs             $  151.3

Operating costs

Site operating costs, are $61.84 (U.S.) per tonne processed, as summarized in the accompanying table.

                                                                   Unit cost
Area                                                              (US$/t ore)

Mining                                                              $  33.32
Backfill plant                                                          4.98
Process -- flotation                                                   16.64
Process -- APT                                                          3.96
General and administrative                                              2.94
Total operating costs                                                  61.84

Financial analysis

Based upon the foregoing and the long-term tungsten price provided by Roskill, the following economic parameters are indicated, including contingency:

• NPV at 8 per cent -- $400.3-million (U.S.), pretax;
• IRR -- 46 per cent;
• Payback -- 2.2 years.

Aspects not included in this study

There are initiatives currently under way that may further enhance project economics, including:

• Use of a mining contractor to undertake predevelopment, compared with the purchase of a self-owned fleet and recruitment of operators;
• Byproduct recovery and potential sale for molybdenum sulphide, bismuth, gold and molybdenum trisulphide.

Permitting

Key permits are in place, with the following approvals required later in 2012 and 2013:

• Sangdong -- drawings submitted to Korean architects to verify they comply with Korean county building code prior to lodgement for approval, expected in June, 2012.

This does not delay the project as initial earthwork and demolition of old buildings will move ahead.

Development schedule

Woulfe has completed the detail design in parallel to the feasibility study, which has allowed the company to advance the project, and the company is in a position to initiate development of the production decline this quarter and finalize contracts for the construction of the process plant. Construction will proceed in June and progress through the winter to be commissioned in 2013. The company is budgeting to create an ore stockpile of 200,000 tonnes from initial mining and process 800,000 tonnes in the first 12 months (200,000 tonnes from stockpile and 600,000 tonnes from underground stopes).

Qualified persons

In May, 2010, Woulfe commissioned Tetra Tech to complete the Sangdong feasibility study in accordance with National Instrument 43-101 reporting guidelines. The mineral resource estimate was supervised by Paul Gribble, CEng; the mineral reserve estimate and the mine plan were supervised by Jon Gliddon, CEng; the process plant design and costing by Contromation were reviewed and approved by Andy Carter, CEng; the APT plant design and costing were supervised by Rod Elvish, CEng; tailings and backfill design and costing were supervised by Karlis Jansons, PEng; and other capital and construction costs were provided by Hanmi Global Korea and were reviewed and agreed upon by Jon Gliddon, CEng.

The scientific and technical information in this release has been reviewed and approved by Jon Gliddon, CEng, general manager, United Kingdom, for Tetra Tech, and overall manager for the feasibility study. Mr. Gliddon is an independent qualified person within the meaning of National Instrument 43-101.

Readers should refer to the feasibility study technical report for further details of the project development. The feasibility study technical report will be filed in accordance with National Instrument 43-101 on SEDAR within the required 45-day statutory period, and will be filed on the company's website.

We seek Safe Harbor.