Tungsten Mining fund-raising pulls in $47m – more than double its target
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Explorer Tungsten Mining has raised substantially more than expected in a capital raising launched last month.
The explorer (ASX:TGN) — which focuses on tungsten ventures in Australia — has commitments for a placement to sophisticated and institutional investors to raise roughly $47 million – more than double its $20 million target.
Tungsten will accept the oversubscriptions.
The placement was priced at 34c, which at the time was a “modest discount” to the company’s share price, according to chief Craig Ferrier.
Since the placement was announced, however, the shares have soared to a new 52-week high of 82c. Shares were trading down 2 per cent at 75c on Thursday morning.
Shortly after announcing the capital raising in mid-April, Tungsten Mining revealed it had made Vital Metals (ASX:VML) a $15 million offer for its Watershed tungsten project in Queensland.
On top of that “the tungsten market generally has remained quite buoyant and prices have continued to increase over the last month or two”, Mr Ferrier said.
“Where in the midst of progressing a development project at Mt Mulgine, having the capacity to fund a greater portion of work there as well as being able to consummate the transaction with Vital Metals, it provided that opportunity to be more certain in terms of our forward planning,” he told Stockhead.
Tungsten has the highest melting point of all metals and has major applications in machine tools (drill bits and cutting tools), as a toughener in steel alloys, in ammunition and armoury, and a range of other applications.
While China’s crackdown on illegal and environmentally damaging mines has been the biggest factor in tungsten’s price rise, there is also some excitement about new emerging applications in cars and batteries.
Tungsten Mining is focused on a low capital start-up of the Mulgine Hill deposit to generate cash to fund large scale mining of the Mulgine Trench deposit.
The Mt Mulgine Project is located in the Murchison region of Western Australia about 350km north-east of Perth.