Tungsten Mining NL, (ASX:TGN) a company exploring for tungsten in Western Australia, on Thursday released the results of a scoping study showing the economic viability of its Kilba project.
The study values the project, an open-cut mine slated to produce 154,000 MTU of WO3 a year for 7 years, with a net present value of $36 million with an internal rate of return of 34 percent. The $56 million capital expenditures outlay is expected to be paid back within the first year of operation.
Located in the Gascoyne region of Western Australia, the deposit contains 1.4 million MTU of contained tungsten oxide, as defined in a JORC-compliant resource estimate.
“The release of the Scoping Study results is another major milestone for Tungsten Mining and its shareholders, managing director Paul Berndt said in a statement. “The Scoping Study indicates that Kilba is an economically attractive project, and the relatively low pre-production capital cost of $56 million is a low capital barrier for Tungsten Mining to overcome in order to join the ranks of the world’s very few tungsten producers outside China.”
Tungsten Mining said it plans to initiate a definitive feasibility study (DFS) for release in the second half of the year. More infill drilling is also expected to take place in zones 8 and 11 of the deposit.
Tungsten Mining closed at 18 cents on the ASX on Thursday, unmoved from the previous session.
Securities Disclosure: I, Andrew Topf, hold no direct investment interest in any company mentioned in this article.