Tough decisions lie ahead for Devon mining firm

Tungsten West

A major cost-cutting programme is being launched by firm Tungsten West as it looks to relaunch production at its Devon tin mine.

The company said it is focussed on restarting production at its tungsten and tin mine in Hemerdon.

In order to satisfy the conditions for raising the necessary funds it will carry out a restructuring exercise and interim fundraising  scheme.

The company has warned that the worse case scenario could see production at the mine halted and a care and maintenance project put into place.

Fundraising is already underway in order to raise a minimum of £5m and up to £6.95m through a placing of convertible loan note and up to a further £2m via an open offer.

A cost cutting programme has been launched including a review of operating costs, capital expenditure, and sale of surplus assets

Following completion of the fundraising, Mark Thompson will step down from the board and the company is in the process of strengthening its board with the recruitment of additional non-executive directors with complementary skills and experience.

David Cather, chairman of Tungsten West, said: “It is our objective and focus to bring Hemerdon back into production, and this interim fundraise will help us achieve this goal.

“The proceeds of the fundraising will increase the company’s cash balance and allow it to progress necessary Project workstreams whilst it continues to work towards full project funding.

“However, due to the increased risk surrounding volatile energy prices and a more conservative lending approach, some tough decisions have had to be made in order to ensure deliverability. Over the coming months, the company will be required to implement a number of cost saving initiatives to ensure success at Hemerdon but I remain confident in the project and believe we now have the team to help it deliver its potential.”

The recently appointed chief executive Neil Gawthorpe, is currently undertaking a review of the funding and strategic options available to the company, and the board will consider the options available to maximise value for the company’s shareholders and other stakeholders.

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