Tungsten West plc is in discussions for additional funds after its revised plans failed to meet the $49 million loan terms from Orion Resource Partners for the Hemerdon tin-tungsten mine in Devon.
FINANCES
In its audited results for the year ended 31 March 2022, the company said that the agreed financing package through a royalty sale and a senior loan facility with Orion were based on the rebuild plans in 2021.
“At the time of the Orion negotiations, the rebuild plans were to maximise volume and therefore required significant capital investment to which the Orion funds were primarily intended to support,” said chairman Robert Ashley.
“This included capital equipment and resources needed for the project execution.
“Following the revised plans to reduce project capex and re-optimise the mineral processing facility, certain conditions precedent to drawing on the Orion funds were not met and therefore this financing package cannot currently be drawn down.
“The group is now in discussions with financing partners to provide the additional capital required to execute the development of the project.”
For the year end, Tungsten West recorded a net loss of £13m (2021: £8m) and a net cash position of £28.8m (2021: £3.5m).
OPERATIONS
The company reported no lost time injuries or medical treatment injuries during the period.
The average number of employees increased to 58 (2021: 34) with women making 23% of current workforce.
In July 2022, post-year end, the board approved detailed engineering design to commence construction of the Hemerdon project.
AGGREGATES
The group began shipping aggregates in early 2021, utilising existing stockpiles that the previous operator considered to be waste.
During the year to March 2022, the group sold 90,000 tonnes of aggregate product at an average of 15 exports per day.
Tungsten West said that the trial project made a loss “largely as a result of the low quality feed stock producing low yields and high silt content waste”.
INFLATION
Executive vice-chairman Mark Thompson added that the company results were in line with the board’s expectations as the group increased its workforce and corporate activities.
“Throughout the reporting period and post year-end, everyone involved in the Hemerdon project have [sic] shown immense commitment in ensuring the group can overcome the inflationary pressures that have impacted our plans considerably.
“Sometimes a pause in development is necessary, and whilst it was a challenging task for our Tungsten West team to re-design and re-evaluate the project, I am certain this was the right course of action to take back in April this year.
“We firmly believe the Hemerdon deposit has a deep and strategic value for the local region and UK.”