Trading Update

11 October 2022

Tungsten West Plc

("Tungsten West", the "Company" or the "Group")

Trading Update

Tungsten West plc (LON: TUN), the mining company focussed on restarting production at the Hemerdon tungsten and tin mine ("Hemerdon" or the "Project") in Devon in the UK, provides this update on progress with financing and construction.

Highlights:

·    Remaining Cap-Ex of £31.5m

·    Orders for remaining long lead time items being placed for Q1 2023 delivery

·    Commissioning of plant upgrades on schedule for Q2 2023

·    Continued progress on renewable energy installation studies and announcement of supportive Government policies

Project Cap-Ex Budget:

The Company has received the final Cap-Ex budget and construction schedule from Tungsten West's EPCM contractor, Fairport Engineering Limited ("Fairport"), and has also received quotes for the final long-lead time items, allowing the Company provide the following guidance:

The remaining project Cap-Ex budget is estimated at £31.5m, excluding a 20% contingency of £6.3m.

This Cap-Ex estimate is significantly below the projected forecast at the time the Project was paused in April 2022. The material line items are set out below:

The Company will immediately be placing orders for the remaining long lead time items in time for delivery during H1 2023 and anticipates the commissioning of the plant upgrades in Q2 2023.

Financing Update:

The Company continues to progress towards final documentation for the previously announced signed term sheet for a US$30m (£26.5m) royalty sale. The Company is also engaged with a number of specialist asset backed finance providers and is seeking up to £10m of asset backed loans from these sources.

Cash at hand as of 30^th September 2022 was £14.5m.

 Renewable Energy Initiatives

The Company welcomes the UK Government's recently announced intention to simplify and streamline the current planning process required for onshore renewable energy installation. Tungsten West is actively pursuing options for wind and solar power generation at the Hemerdon site and nearby.  As announced on 13 September 2022, the Company has identified a 50-acre site within 1.2km of Hemerdon that is suitable for the installation of 9MW - 12MW of solar energy production, and three potential sites suitable for wind turbine installation. Scoping studies for both are underway. 

Further Updates

Further updates will be provided on a regular basis detailing construction progress. The Company expects to complete its independently reviewed updated Feasibility Study before the end of November 2022 and will provide further guidance on project schedule and life of mine financial metrics once this is completed.

Mark Thompson, Executive Vice-Chairman, said:

 "Recent Government policy announcements have included some welcome news for Tungsten West. The energy cap for businesses provides certainty over power costs for this winter and the reversion to a Corporation Tax rate of 19% is good news for shareholders.

The announced intention to streamline planning requirements for the installation of renewables was of particularly interest as we have an ambition to be a sustainable and ethical UK mine and this assists in the commercial case for building our own solar and wind capacity. Tungsten West is a nationally, even internationally, important mining project given China's dominance in this critical metal and the need for tungsten in the green energy transition: a planning system that supports domestic supply chains is good news for the manufacturing industry in the UK.

We also noted the announcements on investment zones. If Devon were to become one of the new investment zones then alongside the already granted free-port status for Plymouth there is a real opportunity to boost economic growth in the County, with Tungsten West at the forefront.

Mining is an inherently risky and volatile industry in which to invest, so therefore the cancellation of the planned corporation tax rise enhances the investment case in Tungsten West, de-risks the project and should lower our cost of capital. This supports our plan to proceed with creating the 250 direct jobs and an anticipated 1,500 indirect jobs through the supply chain to Hemerdon."

This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014 as amended by the Market Abuse (Amendment) (EU Exit) Regulations 2019.

Enquiries

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