Tungsten West PLC (AIM:TUN) has released results of an updated feasibility study for the Hemerdon tungsten and tin mine in Devon.
The new study gives Hemerdon a post-tax net present value (NPV) of £297mln and an internal rate of return (IRR) of 25%, with an upside case showing an NPV of £415mln and an IRR of 32%.
The life of mine cash free flow post financing is reckoned at £550mln.
Average annual production is set at 2,900 tonnes of tungsten trioxide (WO3) in concentrate and 310 tonnes of tin in concentrate.
Life of mine is set at 27 years, with the new mining model assuming the stockpiling of lower-grade killas ore for processing from year 17 onwards.
Cash costs will be £135 per mtu of WO3.
Overall, this positions Tungsten West to become the largest tungsten producer in the Western World.
The resource currently stands at 351.5mln tonnes at 0.12% WO3 and 0.03% tin, and the project benefits from over £200mln of investment to date, including the development of significant infrastructure, pre-stripping of the open pit, construction of the mineral processing facility and a fully funded restoration bond.
"We are delighted to deliver this updated feasibility study which showcases the attractive economics of our project that will enable us to sustainably deliver the critical metals, tungsten and tin, into world markets,” said Mark Thompson, executive vice chairman of Tungsten West.
"The updated feasibility study was completed as part of the revised plan for the Hemerdon mine, which was essential due to the unforeseen geopolitical circumstances and energy price inflation shock of 2022. The feasibility study provides solutions to the energy price challenges and will enable increased operating efficiencies at the Project.
"Key highlights from this study include a revised ore delivery and waste mining strategy, a split phase approach to operational ramp-up to the full design specification, a new primary and secondary crushing method and location, a re-optimisation of the operating strategy for the XRT ore sorters, re-design and re-engineering of the feed preparation, ore sorter buildings and structures, and a re-evaluation of the operation of unit processes and expected recoveries.”