Tungsten West, a mining firm targeting the revitalization of the Hemerdon tungsten and tin mine located in Devon, UK, has released an encouraging update regarding its financing efforts and operational plans. With favorable market conditions for tungsten and tin, the company is optimistic about its future.
The company is currently in the process of securing project financing and has made significant headway, as several potential lenders have reached the term sheet stage. This progress is in addition to an expression of interest from the US Export-Import Bank announced earlier. Tungsten West is on track to keep stakeholders informed, with an update expected before the end of the first quarter of.
Financing and operational developments
Tungsten West is not only focused on financing but is also advancing its operational activities necessary for recommissioning the mine. The company has placed orders for essential long-lead equipment and engaged key personnel to initiate refurbishment work. This proactive approach is expected to facilitate the production of tungsten concentrate within 12 months after securing the necessary funding.
Significant improvements in project economics
The recent surge in market prices for tungsten and tin has led to a substantial uplift in the project’s financial outlook. According to the latest feasibility study released in August, the projected Net Present Value (NPV) has escalated dramatically from US$190 million to an impressive US$1.7 billion. Meanwhile, the Internal Rate of Return (IRR) has jumped from 29% to a staggering 197%. This remarkable improvement underscores the critical importance of expediting the project.
With the current market dynamics, the expected EBITDA has also seen a fourfold increase, indicating that Tungsten West is strategically positioned to leverage these favorable conditions to its advantage. The growing demand for tungsten and tin, both essential minerals for various industrial applications, further emphasizes the significance of the Hemerdon project in the global supply chain.
Strategic planning for production
The Hemerdon mine, recognized as one of the largest sources of tungsten outside China, is poised to contribute significantly to the global market once production resumes. Tungsten West has made it clear that it is fully committed to accelerating the recommissioning process. The company aims to achieve a smooth transition from refurbishment to operational readiness.
Securing offtake agreements
Alongside its financing initiatives, Tungsten West is actively pursuing offtake agreements to ensure a market for its produced minerals. The company is in advanced negotiations regarding multiple letters of intent, which already represent over 300% of the anticipated peak production levels of tungsten concentrate. This proactive strategy is designed to secure a stable revenue stream as operations ramp up.
Jeff Court, the CEO of Tungsten West, has expressed confidence in the company’s ability to navigate the challenges ahead. He remarked on the structural changes within the tungsten market since late, stating that these shifts necessitate a greater diversification of critical minerals and supply chain resilience for Western economies. The updated feasibility study illustrates a robust approach to restarting operations at Hemerdon, with enhancements in the mineral processing flow sheet and modifications to the plant.
In conclusion, Tungsten West is gearing up for an exciting phase of growth as it looks to capitalize on favorable market conditions. With significant improvements in project economics, ongoing progress in securing financing and operational readiness, and a commitment to forging strategic partnerships, the company is on a path to becoming a key player in the tungsten and tin markets.