The firm looking to revive a tungsten mine in Devon has said it is in position to become the largest producer of the metal in the western world.
AIM-listed Tungsten West has published an updated feasibility study on its plans for the Hemerdon mine near Plymouth, where it hopes to resume production of tungsten and tin in the fourth quarter 2023.
The business said the project, which has secured £200m in investment to date, had a post-tax net present value (NPV) of £297m with an internal rate of return (IRR) of 25%, with upside case post-tax NPV of £415m and IRR of 32%.
The mine has been calculated to have a life of 27 years, with annual production estimated at 2,900 tonnes of tungsten trioxide (WO3) in concentrate and 310 tonnes of tin in concentrate.
Tungsten West said a complete redesign of the front-end crushing circuit at the mine would “considerably” reduce capital expenditure associated with the plans, with remaining fees revised at £31.1m as of October, with £12m already spent.
The company has so far received two of four permits required to restart operations at Hemerdon and said it was anticipating the approval of the remaining two in the first quarter of this year.
The firm said the revised plans - which came after its reported “multiplying” energy, fuel and construction costs last year due to “unforeseen geopolitical circumstances” - had shown the “attractive economics” of its project.
Mark Thompson, executive vice chairman of Tungsten West, said: "Tungsten is on both the EU and US lists of critical metals and due to geopolitical tensions and security of supply issues the market remains strong.
“With Hemerdon in production, we will provide an alternative source of tungsten to western consumers in markets which are otherwise dominated by China. China currently accounts for circa 90% of global tungsten reserves and 80% of mine production, and Chinese APT production share is between 85% and 90% of world supply.”
In December, Tungsten West boosted ore and mineral reserves at Hemerdon. In an update to investors it said it had seen a 60% increase in ore tonnage and 10% increase in contained metal from previous 2021 ore, and a 7% increase in mineral tonnage and 1% increase in contained metal from last year’s mineral resources.
Tungsten West bought the Plympton mine out of receivership for £2.8m in 2019 when former owner Wolf Minerals went into liquidation.
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