Tungsten Mining has appointed Jefferies Australia to pursue strategic investors for its Watershed tungsten project, adding a global investment bank to a funding campaign already covering debt, offtake and government support. The move expands the options around a project with a reported A$1.309 billion pre-tax NPV8, but no funding deal or Final Investment Decision has been secured.
- Jefferies appointed to identify and assess strategic investors
- Strategic investment process to run alongside Cutfield Freeman debt mandate
- Offtake-linked funding, government support and commercial partnerships also under review
- Watershed PEE reports A$1.309 billion pre-tax NPV8 and 198% IRR
- No final funding structure or Final Investment Decision has been approved
Jefferies joins Watershed funding campaign
Tungsten Mining NL (ASX:TGN) has added Jefferies Australia to the financing effort for its 100%-owned Watershed Tungsten Project in Far North Queensland, giving the company a dedicated adviser for potential strategic investors.
Jefferies will help identify, evaluate and engage prospective investors, as well as advise on the structure and execution of any strategic investment process. The mandate adds an international capital-markets workstream to the debt process being led by Cutfield Freeman, appointed in August.
The company said it is assessing several funding routes in parallel, including strategic investment, project debt, offtake-linked funding, government support and commercial partnerships. That approach is designed to preserve flexibility over the eventual capital structure rather than commit Watershed to a single source of capital.
Watershed economics remain preliminary
The funding push follows Watershed's Preliminary Economic Evaluation, which estimated pre-production capital of A$274 million, a pre-tax NPV8 of A$1.309 billion, a pre-tax IRR of 198% and a nine-month payback. Those figures remain subject to the assumptions and qualifications in the preliminary study.
Watershed's updated Mineral Resource is 69.7 million tonnes at 0.11% WO3, with the PEE outlining an eight-year mining operation feeding a processing facility that may continue beyond the initial mine life. Tungsten Mining says drilling, metallurgical work, approvals, early works, engineering and procurement are continuing as it moves towards a potential FID.
The critical qualifier is that no funding structure or transaction has been agreed, and the company has made no Final Investment Decision. Development remains conditional on further studies, project financing, remaining approvals and Board approval. The PEE also relies partly on Inferred Mineral Resources, meaning its production target and financial projections carry material technical and execution uncertainty.
Bottom Line?
Jefferies broadens the route to Watershed financing, but the next meaningful milestone will be evidence of committed capital and terms that can support a Final Investment Decision without imposing excessive dilution or leverage.
Questions in the middle?
- Will Jefferies identify a strategic investor willing to commit capital before the targeted Final Investment Decision?
- What balance of debt, equity, offtake and government support will ultimately fund the A$274 million pre-production requirement?
- How will further drilling, engineering and study work affect the preliminary economics before financing is finalised?