Tungsten West PLC plans to raise £39mln in an initial public offering, which would value the owner of the world-class Hemerdon tungsten-tin deposit in south Devon at about £106.2mln when it lists in London.
Last week the company announced its plans to list on London’s Alternative Investment Market on October 21 as part of its goal of restarting production at the mine.
READ: Tungsten West plans London IPO to raise funds to restart Hemerdon tungsten-tin mine
Tungsten West said today that it has conditionally raised £39mln before expenses from the offer of 65mln new shares at an offer price of 60 pence per share.
The net proceeds of the offer, together with US$49mln (£36mln) project financing from a fund managed by Orion Resource Partners, means it is fully funded to bring the Hemerdon mine back into commercial production.
Tungsten West plans to spend £44.6mln on improvement works to bring the mine back into production, with the rebuild only expected to take 12 months as parts of the restart project are already underway.
The company purchased the mine, the world’s third-largest tungsten resource, in 2019 from receivership and has completed a bankable feasibility study, demonstrating a reserve of about 63.3 million tonnes at 0.18% tungsten and 0.03% tin as well as 37.4 million tonnes of saleable aggregate material.
Tungsten and tin are considered critical minerals.
“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,” said chief executive Max Denning.
“With the proposed £39mln raise announced today, and the £36mln funding package from Orion, we will be fully funded for the development of Hemerdon back into production.”
"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,” added Philip Clegg, Orion portfolio manager.
“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," he said.
Tungsten West estimates the mine’s life at 18.5 years with the opportunity to extend this through future investment.