Tungsten West PLC (AIM:TUN) signed a non-binding term sheet for a US$30mln royalty investment.
The agreement comes after refinements were made this summer to its development plan for the Hemerdon tungsten project in the UK.
A construction schedule and final capex budget is expected to be received from Tungsten West's EPC contractor Fairport Engineering by the end of September 2022.
In the meantime, orders have been placed for a number of long-lead time items, including the new semi-mobile primary and secondary crushing circuit which is being supplied by Metso-Outotec of Finland.
Expressions of interest to purchase three of the ore sorters that are now surplus to requirements under the new plan have been received from third parties.
Construction of new screens and vibrating feeders as provided by Vibramech of South Africa is complete and they are in transit to the UK.
The company has signed a letter of intent with EPC Groupe for the provision of drill and blast services during the restart of mining operations.
The company identified a 50-acre site within 1.2km of Hemerdon that is suitable for the installation of solar energy production and has commissioned a scoping study to be followed by a separate feasibility study into developing this project.
The scoping study will be completed within four weeks and the feasibility study is expected before the end of December 2022. Peak energy consumption for the processing plant is calculated at circa 7MW, and should be covered by the envisaged output from the solar project.
Three potential sites suitable for the installation of wind turbines have been identified within the mine boundary, on land owned by the company. A scoping study has been commissioned into the feasibility of building a dedicated wind turbine with a private connection into the processing plant, including planning and permitting requirements.
Progress continues in the plant refurbishment and upgrade, with works within the tertiary crushing circuit now completed. 67% of the plant refurbishment programme is now complete.
Refurbishment of the on-site lab has been completed and it is now capable of providing internal assay and metallurgical analysis.
Earthworks for the installation of the new ore sorting building have been completed.
In addition to the royalty sale, which has as one of its conditions precedent the completion of a new feasibility study, the company is in advanced discussions with asset backed finance providers in order to secure additional finance of between £5mln and £10mln secured against fixed and mobile equipment, and spare parts.
The money is required for general corporate purposes, for cost over-run contingencies and to maintain a cash buffer during commissioning.
The company is not seeking a project finance facility in the expectation that the royalty and asset backed finance monies, plus cash on hand, are sufficient to finance Hemerdon through to positive cash flow.
Cash on hand as of 31st August 2022 was £17mln.