Shares in Tungsten West PLC (AIM:TUN, FRA:540), the miner reopening the Hemerdon tungsten and tin mine in Devon, are up 15% at 49.76p in early deals after it secured up to £71 million from the government's National Wealth Fund.
The investment completes the funding package needed to restart full production.
The state-owned investor is putting £36 million into equity, subscribing for 100 million new shares at 36p each, a discount of 7.5% to the 20-day volume-weighted average price to 19 August.
That will leave the fund with roughly 7.42% of the enlarged share capital.
Alongside the equity comes a debt facility of up to £25 million, plus an uncommitted £10 million accordion, priced at SONIA plus 5.5%, or around 9% a year, and rising by one percentage point each quarter.
The facility runs for 366 days and is secured against assets of the company and its subsidiaries.
Proceeds will fund the Hemerdon restart and repay the £18 million short-term loan agreed in May.
In return, the government has been granted a limited window to negotiate an offtake agreement covering up to 50% of the tungsten production set out in Hemerdon's 2025 feasibility study.
Tungsten is classed as a critical mineral, used in defence, aerospace, high-technology manufacturing and energy applications, and supply has long been dominated by China.
Jeff Court, chief executive, said Hemerdon was a world-class, low-cost and long-life resource, and that the company would prioritise UK demand for the metal.
The National Wealth Fund gains the right to nominate a non-executive director, with a board observer in the interim, and holds veto rights over changes to the business plan and share issuance for 12 months.
Those rights persist for as long as it holds at least 50 million shares.
The company said it produced tungsten and tin concentrate last month and is completing final testing ahead of a production start in the third quarter.
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