Tungsten West finishes processing legacy material

Mining company Tungsten West, which is focussed on restarting operations at the Hemerdon tungsten and tin mine, announced the successful completion of processing its legacy tungsten and tin concentrates on Friday, through the commissioning of the refinery portion of its mineral processing facility (MPF).

The AIM-traded firm said the milestone was a significant step towards the restart of tungsten and tin production at Hemerdon.

It said the commissioning work, carried out under a temporary environmental permit from South Hams District Council, saw the successful recommissioning of the dry section of the refinery within the Hemerdon MPF, with no safety or environmental incidents reported.

During the recommissioning process, Tungsten West processed more than 50 tonnes of legacy tungsten and tin concentrates, as well as a limited amount of residual material remaining since the closure of the previous operation.

As a result, the company generated four lots of material for sale, consisting of two lots of tungsten concentrate and two lots of tin concentrate.

The lots were shipped to an off-taker on 31 May.

Tungsten West said the activities were part of its strategic plan to move towards regular production, liquidate assets from the previous operator, and use already-crushed and separated materials.

The company said it expected to generate more than £0.4m in revenue from the operations, and added that processing work had provided valuable insights into the future operating parameters for the ore dressing stage of the beneficiation process.

In a bid to enhance cost-efficiency, Tungsten West said it had launched a cost reduction programme, which was nearing completion.

At conclusion, management said it expected a 42% reduction in headcount through redundancies and resignations, which would result in a 42% decrease in monthly recurring payroll costs.

The one-off costs associated with the programme were expected to be minimal, primarily consisting of contractor project suspension fees.

As part of the cost-saving measures, project capital expenditure for the front-end rebuild had been scaled back to the existing capital commitments for equipment purchase and low-frequency noise trial work.

Refurbishment work within the plant had also been put on hold until the permitting and funding processes were completed.

The firm said the ongoing operating expenditure would remain consistent with previous guidance, focusing on securing the section 73 planning permission, obtaining the outstanding permit, fulfilling existing obligations, and securing funding.

Meanwhile, preparations for the full-scale development of the Hemerdon project were progressing.

Tungsten West said it was continuing to collaborate closely with the Environment Agency and Devon County Council to secure the final operating permit for the MPF, and ensure a smooth planning process.

"We are excited to announce the interim recommencement of operations at the Hemerdon mine," said chief executive officer Neil Gawthorpe.

"This small-scale production of tungsten and tin is a mere indication of what can be achieved once the mine is fully re-opened."

Gawthorpe said the success of the recommissioning of the dry section of the refinery had also provided the firm with valuable insight into future operating parameters.

"We are dedicated to building and operating this mine with the support of all key stakeholders, especially our local communities, in order to create a responsible mining operation and sustainable source of tungsten and tin concentrate in South Devon."

At 1231 BST, shares in Tungsten West were up 4.48% at 3.27p.

Reporting by Josh White for Sharecast.com.