LONDON, UK: Tungsten West, the mining Company focussed on recommencing production at the Hemerdon tungsten and tin mine in Devon, England, announced its intention to proceed with an initial public offering (IPO), comprising an institutional placing and subscription.
Tungsten West has conditionally raised £39 million before expenses from the offer of 65 million new ordinary shares of £0.01 each in the capital of the Company at an Offer price of £0.60 pence per share and has applied for admission of its Ordinary Shares to trading on the AIM market of the London Stock Exchange.
Admission is expected to occur at 8.00 a.m. on 21 October 2021 with a market capitalisation of approximately £106.2 million.
The net proceeds of the Offer, together with the $49.0 (£36) million project financing (exclusive of £4.2 million of equity contributed to the Offer) from a fund managed by Orion Resource Partners, will be used by the Company as follows:
- to execute the planned capital expenditure and corporate commitments of £44.6 million for improvement works at the Hemerdon Mine;
- to bring the Hemerdon Mine back into commercial production;
- for general corporate overheads, including marketing and business development, other planned capital expenditure and for general working capital purposes (approximately £12 million); and
- to settle Admission and Offer-related fees and expenses (approximately £3.1 million).
The Directors believe that the Offer and Admission will raise the profile of the business and its products and provide a supportive platform on which to grow the business further through in-licensing of additional technologies or selective acquisition as appropriate.
Max Denning, CEO of Tungsten West, commented: “We are pleased to announce our decision to list Tungsten West on the London Stock Exchange’s AIM market, providing the opportunity for UK stakeholders and interested parties to invest in the UK-based Hemerdon mine, the third largest tungsten resource in the world. In addition to being exciting for the UK mining sector to have a project that is in the advanced stages of development, the mine will be producing strategically important materials that are vital for the manufacturing of new technology, including those that will aid the UK in its net-zero goals.
“With the proposed £39 million raise announced today, and the £36 million funding package from Orion, we will be fully funded for the development of Hemerdon back into production. We look forward to welcoming new investors into this compelling business and working with all our stakeholders to ensure that the newly reinvigorated Hemerdon mine is a beacon of mining excellence in the UK.”
Philip Clegg, Portfolio Manager of Orion Resource Partners, commented: “Orion is delighted to make its substantial investment into Tungsten West, securing the recommencement of mining in the South West of the UK and the creation of new jobs. We look forward to supporting the Tungsten West team as they rebuild Hemerdon, restarting production of a suite of raw materials critical for the technology, decarbonisation and construction sectors, locally and globally.”
Tungsten West is the 100 per cent owner and operator of the past producing Hemerdon tungsten and tin mine, located near Plymouth in southern Devon, England. The Hemerdon mine is currently the world’s third largest tungsten resource, with a JORC (2012) compliant Mineral Resource Estimate of approximately 325Mt at 0.12 per cent. WO3. The Company acquired the mine out of a receivership process in 2019 after its its most recent operators, Wolf Minerals, stopped production in 2018.
While it was operator, Wolf invested over £170 million into the development of the site, the development of significant infrastructure and processing facilities. Hemerdon was producing tungsten and tin materials, under Wolf, between 2015 and 2018, before the Company entered administration and placed the mine into receivership due to a number of issues that have since been identified and rectified by Tungsten West.
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