The company believes the acquisition will allow it to move forward at Mount Mulgine more quickly and with lower costs.
Tungsten Mining (ASX:TGN) closed the week by entering into a binding agreement to buy Pilbara Minerals’ (ASX:PLS) Tabba processing plant in Australia.
According to a Friday (June 21) press release, the acquisition will cost Tungsten Mining $600,000, with half being paid in cash and half being paid in shares. The company sees the purchase as a game changer that will allow it to move forward at its Mount Mulgine tungsten-molybdenum project more quickly and with lower costs.
“The opportunity to acquire the Tabba plant will enable Tungsten Mining to rapidly progress the project implementation, delivering a genuine competitive advantage,” said Craig Ferrier, CEO of Tungsten Mining. He added, “[w]e are delighted to welcome Pilbara Minerals as a shareholder of Tungsten Mining.”
The Tabba processing plant was built in 2015 for use at Pilbara Minerals’ Tabba Tabba tantalite project, but was decommissioned the next year after work at the project was suspended. Pilbara Minerals said at the time that it was unable to achieve design throughput and a representative recovery rate during commissioning.
The plant consists of a ball milling circuit, a coarse and fine gravity recovery circuit, a dewatering circuit, pipework, all associated hoppers and pumps, electrical and control equipment, modular concrete footings and tailings dam liners. Its nameplate capacity stands at 30 tonnes per hour, though that is expandable via optimization or the addition of modules.
As mentioned, Tungsten Mining believes the acquisition of the plant will potentially allow it to reduce the amount of money it needs to spend on Mount Mulgine. The purchase “represents a step change in the capital requirements for project development and will deliver a competitive advantage to support initial market entry,” the company says in Friday’s release.
Tungsten Mining is targeting first tungsten concentrate production at Mount Mulgine within two years. The Mulgine Trench and Mulgine Hill deposits at the project have a combined mineral resource of 72.2 million tonnes at 0.18 percent WO3 (at a 0.1-percent WO3 cut off) and 228 ppm molybdenum.
In addition to Mount Mulgine, Tungsten Mining also holds the Big Hill and Kilba tungsten projects in Australia. The company’s share price was up 15.79 percent as of 10:30 a.m. PST on Friday, sitting at $0.044; it was up 25.71 percent year-to-date.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.