Tungsten West PLC (AIM: TUN) shares rose 17% to 50.50p after the company secured up to £71 million of funding from the UK government’s National Wealth Fund, completing the financing package required to restart full production at the Hemerdon tungsten and tin mine in Devon.
The package includes a £36 million equity investment, with the National Wealth Fund subscribing for 100 million new shares at 36p each. The investment will give the state-backed fund a stake of around 7.4% in the enlarged company.
Tungsten West has also secured a debt facility of up to £25 million, alongside an uncommitted £10 million accordion. The facility is priced at SONIA plus 5.5% and runs for 366 days.
Proceeds will fund the Hemerdon restart and repay the £18 million short-term loan agreed earlier this year.
As part of the agreement, the government has been granted a limited period to negotiate an offtake arrangement covering up to 50% of Hemerdon’s planned tungsten production.
The investment has strategic significance given tungsten’s use across defence, aerospace, high-technology manufacturing and energy, with global supply heavily concentrated in China.
The National Wealth Fund will also have the right to nominate a non-executive director and will initially appoint a board observer. Certain governance rights will remain in place while its shareholding stays above agreed thresholds.
Tungsten West said it produced tungsten and tin concentrate last month and is completing final testing ahead of the planned production restart in the third quarter.
