REG - Tungsten West PLC - Trading Update

Tungsten WestAnnouncement

11/10/2022 07:00

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RNS Number : 4071C  Tungsten West PLC  11 October 2022

11 October 2022

Tungsten West Plc

("Tungsten West", the "Company" or the "Group")

 

Trading Update

 

 

Tungsten West plc (LON: TUN), the mining company focussed on restarting
production at the Hemerdon tungsten and tin mine ("Hemerdon" or the "Project")
in Devon in the UK, provides this update on progress with financing and
construction.

 

Highlights:

·    Remaining Cap-Ex of £31.5m

·    Orders for remaining long lead time items being placed for Q1 2023
delivery

·    Commissioning of plant upgrades on schedule for Q2 2023

·    Continued progress on renewable energy installation studies and
announcement of supportive Government policies

 

Project Cap-Ex Budget:

The Company has received the final Cap-Ex budget and construction schedule
from Tungsten West's EPCM contractor, Fairport Engineering Limited
("Fairport"), and has also received quotes for the final long-lead time items,
allowing the Company provide the following guidance:

 

The remaining project Cap-Ex budget is estimated at £31.5m, excluding a 20%
contingency of £6.3m.

 

This Cap-Ex estimate is significantly below the projected forecast at the time
the Project was paused in April 2022. The material line items are set out
below:

 

 Capital Item                                                                                                                                                                                            £m
 Ore Sorting: new building, conveyors and construction                                                                                                                                                   10.5
 Primary and Secondary Crush: earthworks and equipment                                                                                                                                                   6.2
 Tertiary Crushing: screens and conveyors                                                                                                                                                                4.1
 Processing Plant: process changes and upgrades                                                                                                                                                          2.7
 EPCM fees:                                                                                                                                                                                              2.6
 IT: Hardware and software                                                                                                                                                                               1.3
 Other                                                                                                                                                                                                   4.1
                                                                                                                                                                                                         £31.5m
 TOTAL

 

 

The Company will immediately be placing orders for the remaining long lead
time items in time for delivery during H1 2023 and anticipates the
commissioning of the plant upgrades in Q2 2023.

 

 

Financing Update:

The Company continues to progress towards final documentation for the
previously announced signed term sheet for a US$30m (£26.5m) royalty sale.
The Company is also engaged with a number of specialist asset backed finance
providers and is seeking up to £10m of asset backed loans from these sources.

Cash at hand as of 30(th) September 2022 was £14.5m.

 

 Renewable Energy Initiatives

The Company welcomes the UK Government's recently announced intention to
simplify and streamline the current planning process required for onshore
renewable energy installation. Tungsten West is actively pursuing options for
wind and solar power generation at the Hemerdon site and nearby.  As
announced on 13 September 2022, the Company has identified a 50-acre site
within 1.2km of Hemerdon that is suitable for the installation of 9MW - 12MW
of solar energy production, and three potential sites suitable for wind
turbine installation. Scoping studies for both are underway.

 

 

Further Updates

 

Further updates will be provided on a regular basis detailing construction
progress. The Company expects to complete its independently reviewed updated
Feasibility Study before the end of November 2022 and will provide further
guidance on project schedule and life of mine financial metrics once this is
completed.

 

 

Mark Thompson, Executive Vice-Chairman, said:

 

 "Recent Government policy announcements have included some welcome news for
Tungsten West. The energy cap for businesses provides certainty over power
costs for this winter and the reversion to a Corporation Tax rate of 19% is
good news for shareholders.

 

The announced intention to streamline planning requirements for the
installation of renewables was of particularly interest as we have an ambition
to be a sustainable and ethical UK mine and this assists in the commercial
case for building our own solar and wind capacity. Tungsten West is a
nationally, even internationally, important mining project given China's
dominance in this critical metal and the need for tungsten in the green energy
transition: a planning system that supports domestic supply chains is good
news for the manufacturing industry in the UK.

 

We also noted the announcements on investment zones. If Devon were to become
one of the new investment zones then alongside the already granted free-port
status for Plymouth there is a real opportunity to boost economic growth in
the County, with Tungsten West at the forefront.

Mining is an inherently risky and volatile industry in which to invest, so
therefore the cancellation of the planned corporation tax rise enhances the
investment case in Tungsten West, de-risks the project and should lower our
cost of capital. This supports our plan to proceed with creating the 250
direct jobs and an anticipated 1,500 indirect jobs through the supply chain to
Hemerdon."

 

This announcement contains inside information for the purposes of Article 7 of
Regulation 596/2014 as amended by the Market Abuse (Amendment) (EU Exit)
Regulations 2019.

 

 

Enquiries

 

 Tungsten West                                                            Strand Hanson

 Mark Thompson                                                            (Nominated Adviser and Financial Adviser)

 Tel: +44 (0) 203 178 7385                                                James Spinney / James Dance / Abigail Wennington

                                                                          Tel: +44 (0) 207 409 3494
 Camarco                                                                  Hannam & Partners

 (Financial PR)                                                           (Joint Broker)

 Gordon Poole / Emily Hall                                                Andrew Chubb / Matt Hasson / Jay Ashfield

 Tel: +44(0) 20 3757 4980                                                 +44 (0)20 7907 8500

 Email: tungstenwest@camarco.co.uk (mailto:tungstenwest@camarco.co.uk)

                                                                          VSA Capital Group plc

                                                                          (Joint Broker)

                                                                          Andrew Raca / Andrew Monk

                                                                          +44 (0)20 3005 5000

Follow us on twitter @TungstenWest

 

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