Tungsten West PLC (AIM:TUN) told investors it is well positioned for 2022, as it released a financial results for the twelve months ended September 30.
The company, in its outlook statement, noted that the commodity price outlook would likely be driven by the ongoing COVID-19 situation and any potential new lockdowns due to the Omicron strain, which could impact demand in Europe.
During the period the company’s focus has been on the advancement of the Hemerdon back into production.
It noted that tungsten markets have remained steady throughout the third and fourth quarters, and, global tungsten inventories remain low – whilst future restocking of tungsten rich drilling equipment from the Oil and Gas industry on the back of higher energy prices seems likely, to further underpin long term pricing.
At the same time, tin prices have performed “spectacularly well” and are near all-time highs at US$40,000 per tonne, the company highlighted.
For context, Indonesia (the world’s largest tin producer) is looking to ban exports of ore and concentrates whilst Myanmar (the second largest producer) is being impacted by political strife and terrorist activity which are restricting exports.
Tungsten West said it is expecting a floor price close between US$25,000 and US$30,000 per tonne for the long term, and, said the outlook in the short to medium term looks robust.
Additionally, the company noted an opportunity for domestic UK aggregates to substitute imports, amid recent supply constraints which have triggered considerable price increases which are expected to be maintained over the next 6 months and beyond.
During the year, the company began sales of aggregate material from stockpiles left by the previous operator and it is expected that the revenue stream will continue up to the restart of the mine.
Key corporate highlights for the period included the admission onto the London Stock Exchange, and it secured an additional £36mln project financing.
The company, in the statement, meanwhile, highlighted: “The first half of the financial year was one in which the group continued to prepare for recommencement of mining operations, with significant progress made on designing the re-build of the processing plant, strengthening the management team, finalising the AIM admission process and agreeing terms with Orion Resource Partners (Orion) for arranging project finance from a Royalty and Senior Loan Facility.
“Following the successful fundraise on admission to AIM in October 2021, Tungsten West is in a strong financial position, and is looking ahead to a landmark 2022.”
The company reported a £4.99mln loss before tax, in line with expectations.