Tungsten West Posts £5M Loss in Full Production at Plymouth Tungsten and Tin Mine

Tungsten West Ltd is a mining development company focused on restarting the world class Hemerdon tungsten and tin mine in South Devon, UK, the company that owns the huge Plymouth tungsten and tin mine has made a £5 million loss in the last 6 months.

In an announcement to investors, West Tungsten said the pre-tax loss of £4,990,226 was in line with expectations for the early stages of the project. The figure for the six months to the end of September 2021 comes after a loss of £7,981,783 for the 2020/21 financial year.

However, West Tungsten, which bought the mine for £2.8 million in 2019, said it was well positioned going into 2022 and stressed that it had successfully achieved its main goal for the first half of the current financial year, which was to prepare to raise the necessary funds to rebuild the mine's processing plant and restart mining.

In October 2021, the company was granted access to the London Stock Exchange's AIM (Alternative Investment Market), raised £39 million through a share issue, and agreed to the terms of a £36 million loan from global investment firm Orion Resource Partners. The Western Tungsten team also achieved a number of key "project milestones", including the publication of the feasibility study that forms the basis of Hemerdon's redevelopment plan.

Since March 2021, the company has successfully commenced the design and build phase of Hemerdon, with Fairport Engineering Ltd appointed to carry out interim design work prior to full construction on site.

The Tungsten West maintenance team also conducted a comprehensive review to understand and address the issues encountered by the former operator, Wolf Minerals, and the areas found to be problematic have been redesigned and will be sorted out in a rebuild plan to significantly improve overall operations and reduce downtime.

Meanwhile, a mining services contract with Hargreaves Services Plc secured an experienced mining contractor with significant previous project experience and a specialist crushing subcontractor for the next 10 years of mining operations.

West Tungsten has also entered into offtake agreements with Wolfram Bergbaau und Hutten AG and Global Tungsten and Powders Corp to purchase at least 78% of its forecasted tungsten production.

An offtake agreement was signed with AfriMet Resources to purchase the tin concentrate to be produced. The company also sold some low grade tungsten concentrate left on site by the former operator for £67,870 In December 2021, a new aggregates division commissioned the Terex Agg Wash 60 equipment to temporarily maintain production while the main equipment is installed.

The company has been shipping aggregates since January 2021, utilizing existing stockpiles that Wolf Minerals considers to be waste. Current estimates indicate that there is sufficient existing stockpiled material to meet forecasted sales in the Aggregate Division until operations are scheduled to recommence.

In December 2021, a new aggregates division commissioned the Terex Agg Wash 60 equipment, temporarily maintaining production while the main equipment is installed. Aggregate sales have raised £133,016 and the Company has signed a distribution agreement with GRS Roadstone, the UK's leading supplier of construction materials, to offtake aggregates generated from future mining operations at Plymouth tungsten and tin mine.

Tungsten West, which now employs 47 people, 22 more than a year ago, has been scaling its workforce to enable it to rebuild the plant and move towards operational readiness after entering AIM. In a report to the stock exchange, it said, "In this spirit, we have recruited a number of specialists in the construction and engineering sectors, including a proportion with previous experience of Hemerdon projects."

It added that the tungsten market has remained stable throughout the third and fourth quarters of 2021, but it said the near-term price outlook could be driven by the ongoing Covid situation and any potential new locks announced due to the Omicron strain.

But the company said, "Global tungsten inventories remain low, and future restocking of tungsten-rich drilling equipment in the oil and gas industry seems likely against a backdrop of rising energy prices. This should support long-term tungsten demand and prices."

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