Tungsten Mining advances Watershed funding as Mt Mulgine expands

Watershed financing moves from concept toward execution

Tungsten Mining NL (ASX:TGN) is approaching a pivotal stretch at Watershed, with a Definitive Feasibility Study targeted for November, a Final Investment Decision targeted for the fourth quarter and first production targeted for the first half of 2027. The project now has its primary approvals, early construction is underway and multiple financiers have submitted non-binding proposals supporting potential gearing of up to about 70% of the estimated A$274 million pre-production capital requirement.

That headline financing figure remains a pathway rather than a facility. The proposals could represent roughly A$200 million of debt, but Tungsten Mining says no final funding structure has been approved. Binding finance would still require completion of the DFS, lender due diligence, independent technical review, credit approval, definitive documentation and board approval. The company is also assessing strategic investment, offtake-linked funding and government-supported sources of capital, following the Watershed debt proposals reported in late September.

Approvals, drilling and metallurgy build the Watershed case

Watershed has secured its Environmental Authority, an approved Progressive Rehabilitation and Closure Plan and granted Mining Leases. Site activity includes resource and geotechnical drilling, environmental and heritage surveys, water-bore drilling, access-road works, site establishment and camp expansion. Secondary approvals and development-readiness work are continuing, so the project is permitted for its primary pathway but not yet beyond every execution hurdle.

A 250-hole drilling program, comprising about 15,000 metres of reverse-circulation drilling and 5,700 metres of diamond drilling, is designed to improve confidence in near-surface higher-grade zones and provide mine-planning, metallurgical and geotechnical information. The first results are targeted for October. Metallurgical work has also confirmed the proposed X-ray ore sorting, gravity separation and flotation flowsheet, producing concentrate grading up to 65.9% WO3. Samples have been sent to potential offtake partners, while commercial specifications, volumes, payability and any offtake-linked funding remain under negotiation. The result builds on the Watershed concentrate testwork that previously produced saleable material but did not establish binding offtake agreements.

Mt Mulgine adds a long-dated scale option

While Watershed is the near-term development focus, Mt Mulgine now provides Tungsten Mining with a much larger, longer-term project case. Its September PFS describes an 8 million tonne per annum base case with a 21-year mine life, pre-tax NPV8 of A$6.823 billion, a 55% pre-tax IRR and initial capital of A$870 million, plus a potential expansion pathway to 16 million tonnes per annum.

The study is based on a 144 million tonne Probable Ore Reserve grading 0.10% WO3, with molybdenum, copper, gold and silver by-products contributing to the forecast economics. The 16Mtpa expansion remains indicative rather than a development decision and would require further studies, approvals, funding and board approval. A 40,000-metre RC campaign continues across the Mulgine Trench, including areas within a conceptual Exploration Target, and is intended to support future resource modelling and DFS work. The campaign follows Mt Mulgine expansion drilling, which reported thicker-than-modelled mineralisation but was not a revised resource estimate.

A$50 million raise funds the next phase

Tungsten Mining completed a A$50 million placement at A$0.32 per share during the quarter, issuing about 156.25 million new shares. The proceeds are intended primarily for Watershed development and general corporate purposes, with the company ending September with A$70.1 million in cash. Exploration and evaluation payments totalled A$14.87 million for the quarter, while Watershed development expenditure was A$4.87 million and plant and equipment payments were A$1.01 million.

The cash balance gives the company time to advance its stated work program, but the Appendix 5B reports estimated funding of about 3.01 quarters based on the quarter's relevant net outgoings. That measure does not include a committed Watershed debt facility, because none exists. The capital raise strengthens the balance sheet, but future project funding could still involve additional equity, debt or other instruments, with the company acknowledging that equity funding may dilute existing shareholders.

The next test is conversion, not more headline potential

The immediate milestones are concrete: Watershed's DFS, initial drilling results, commercial offtake progress, binding financing and a targeted Q4 2026 FID. Each is conditional on study outcomes, funding, approvals and board decisions, while the Watershed production target includes 6% Inferred Mineral Resources and therefore carries a stated degree of geological uncertainty.

For Mt Mulgine, assays, resource modelling and DFS-enabling work will determine how much of the PFS scale survives closer technical scrutiny. The quarter has supplied Tungsten Mining with approvals, capital, studies and proposed financing routes. The unanswered question is whether those ingredients can be assembled into committed funding and a construction decision before the Watershed timetable begins to tighten.