Production at a Tungsten mine in Devon could still restart in 2023 despite energy, fuel and construction costs “multiplying” in recent months, according to the firm behind it.
Aim-listed Tungsten West said global crises in power and diesel prices and inflated construction materials costs had prompted it to re-evaluate its development plans for the Hemerdon Mine near Plymouth, with the firm putting its plans on hold in April.
The company’s bosses said following re-evaluation they had now given approval to proceed with detailed engineering design and to commence construction with immediate effect, with production still envisaged for the first half of next year.
The board said its new operating approach – including a new ramp-up schedule, crushing strategy and re-purposing of equipment – would help lower consumption of resources while delivering profitable operating margins.
The new strategy comes with a change at the top of the organisation, which bought the mine out of receivership for £2.8m in 2019.
Chief executive Max Denning has left his role with immediate effect, with the company saying he had made a “significant contribution” in its formative years. Executive vice-chairman Mark Thompson has assumed the responsibilities of the position.
Mr Thompson said recent geopolitical events surrounding the security of critical minerals meant he remained convinced of the “deep and strategic value” of the Hemerdon Mine – the third largest tungsten resource in the world.
Mr Thompson said: “Our new plan reduces capital expenditure, lowers the ongoing operating costs by streamlining processes for greater energy efficiency, and maximises the operating margins. We can do all of this whilst maintaining the optionality to revert to the original plan should conditions allow in the future.
“On a personal note I would like to thank Max for all of his energy and hard work over the last three years and I wish him well in his future endeavours.”
Tungsten West, will also be producing tin from the open cast pit and selling waste granite as aggregate for the construction industry. A £45m rebuild of the mine’s processing plant is expected to create hundreds of construction jobs.
Tungsten West said as of June 30 it had cash on hand of £22.9m, and it would look to raise debt or other non-equity capital to execute the development of the project, without additional dilution for shareholders. The firm said it was in discussions with financial partners to provide the additional capital.
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