Tungsten West PLC (AIM:TUN) is undergoing a restructuring exercise and is raising interim funds to bring Devon's Hemerdon mine into production.
The company aims to raise at least £5mln and up to £6.95mln through a placing of convertible loan notes and an additional £2mln via an open offer of stock.
In an update, investors were told management is initiating a cost-cutting programme, including a review of operating expenditure, capital overheads and the sale of surplus assets. The group will also sell residual concentrate at the site and process part of the inventory for saleable tungsten and tin.
Tungsten West told the market it is "actively engaging" with financial and strategic partners for full project funding.
After the fundraising is complete, executive vice chairman Mark Thompson will step down from the board and the company will recruit additional non-executive directors with complementary skills and experience.
The project team will collaborate with the Environment Agency to secure the mineral processing facility permit, the company said.
Chairman David Cather added: "It is our objective and focus to bring Hemerdon back into production, and this interim fundraise will help us achieve this goal.
"The proceeds of the fundraising will increase the company's cash balance and allow it to progress necessary project workstreams whilst it continues to work towards full project funding.
"However, due to the increased risk surrounding volatile energy prices and a more conservative lending approach, some tough decisions have had to be made in order to ensure deliverability.
"Over the coming months, the company will be required to implement a number of cost-saving initiatives to ensure success at Hemerdon but I remain confident in the project and believe we now have the team to help it deliver its potential."