Tungsten West, the mining company focused on restarting production at the Hemerdon tungsten and tin mine in Devon, UK, announced its audited results for the year ended 31 March 2023.

The results point to some promising progress for the project. Updated JORC-compliant ore reserve estimates to 101.2Mt, made the Hemerdon deposit the second-largest reported CRIRSCO-standard tungsten reserve in the world. An updated feasibility study set out plans for an average annual production of 2,900t of WO₃ in concentrate and 310t of tin in concentrate. And permits including the Mining Waste Facility ("MWF") and Open Pit Water Abstraction Licence, were granted by the Environment Agency.

However, the project faces some near-term challenges. The CEO’s report stated that while it was expected that the company could operate on the basis that funding and permitting could run in parallel, lender feedback has proven this to not be the case. CEO, Neil Gawthorpe, noted that even though the work conducted under the 2022 feasibility update led to an overall improved project, design changes required have impacted the project’s ability to achieve permitting in the timeframe initially envisaged. As such, the company needs to secure permits before unlocking funding. The updated timeline is to obtain the necessary permits and close additional funding by December 2023.

Following the drawdown of Tranche A and Tranche B convertible loan notes, £6.95M in total, there is no current commitment from existing or new noteholders to purchase any Tranche C notes. If the Group fails to find purchasers for the Tranche C notes, then, in the absence of other new sources of finance, it would no longer be able to meet its liabilities as they fall due in November 2023.

As reported by the Financial Times, Tungsten West’s market capitalisation has fallen from more than £120M in April last year to less than £5M. Shares were down 35% following last Thursday’s announcement. Provided the permits are secured, Tungsten West would need to raise £25M of debt and £35M to £40M of equity to bring the mine back into production by 2025. The next few months will be critical for the project.

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