Tungsten Mining NL has released supplementary financial details to its Mt Mulgine Scoping Study, revising the payback period calculation and adding comprehensive cashflow metrics that underscore the project's robust economics.
- Revised payback period calculated from production start, significantly shortened
- Detailed cashflow and revenue metrics added for clearer financial insight
- Sensitivity analysis highlights FX rate and tungsten price as key value drivers
- Robust project economics support fast-tracking to Pre-Feasibility Study
- No new material information; original assumptions and data remain unchanged
Context and Purpose of Supplementary Disclosure
Tungsten Mining NL (ASX, TGN) has provided additional financial information to complement its Mt Mulgine Scoping Study released earlier this month. This update responds to investor and stakeholder demand for greater clarity on the project's financial metrics, particularly focusing on cashflow projections and payback period calculations. Importantly, the company confirms that no new material information has been introduced; all underlying assumptions and resource data remain consistent with the original study.
Revised Payback Period and Cashflow Insights
The standout revision is the recalculation of the payback period, now measured from the commencement of production rather than from the initial capital drawdown. This adjustment aligns with common industry practice and results in a notably shorter payback timeframe; ranging from approximately 1.3 to 3.8 years depending on throughput and pricing scenarios. Alongside this, Tungsten Mining has disclosed detailed annualised and cumulative cashflow figures under both base and spot commodity price assumptions, providing a more granular view of the project's revenue generation potential over its life.
Robust Economics Underpinning Project Viability
The financial outcomes remain encouraging, with net present values (NPV) and internal rates of return (IRR) reflecting strong project economics. For instance, under spot price scenarios and a 15 million tonnes per annum throughput, the post-tax NPV reaches nearly A$3 billion with IRRs exceeding 70%. Operating costs and capital expenditure estimates are consistent with industry benchmarks, and sensitivity analyses reveal that foreign exchange rates and tungsten recovery/pricing exert the greatest influence on project value. Notably, capital cost variations have limited impact on net present value, suggesting resilience against cost overruns.
Strategic Significance and Next Steps
Chairman Gary Lyons emphasised the global importance of the Mt Mulgine deposit, highlighting its status as one of the largest tungsten resources outside China, situated in a stable jurisdiction. The supplementary financial data reinforce the project's robustness and provide a solid foundation for advancing to a Pre-Feasibility Study phase. This progression is critical as Tungsten Mining seeks to capitalise on growing demand for critical minerals essential to modern industries and innovation.
Cautionary Notes and Market Considerations
Despite the positive outlook, the company reiterates the preliminary nature of the scoping study and the inherent risks involved, including funding availability, commodity price volatility, and operational uncertainties. Investors are cautioned against relying solely on these early-stage financial projections. Nonetheless, the detailed cashflow and payback revisions provide valuable insights that could influence market perceptions and investment decisions as the project advances.
Bottom Line?
With a sharper payback timeline and detailed cashflow clarity, Mt Mulgine’s next phase will test its financial resilience amid market and funding uncertainties.
Questions in the middle?
- How will Tungsten Mining secure the substantial A$358–495 million funding required for development?
- What impact could fluctuating tungsten and molybdenum prices have on the project's economics going forward?
- How might the upcoming Pre-Feasibility Study refine capital and operating cost estimates and project timelines?