21 December 2021

Tungsten West Plc

("Tungsten West", the "Company" or the "Group")

Half Year Results for the six months ended 30 September 2021

Tungsten West, the owner and operator of the Hemerdon Mine in South West England, is pleased to announce its half-yearly results for the six months ended 30 September 2021.

First half and recent highlights include:

·   Admission onto London Stock Exchange, AIM Market including the completion of a successful equity fundraise of £39 million

·    Agreement of terms for the Royalty and Senior Loan Facility with Orion, securing a further £36 million in project financing

·     Funds raised place the Company in a strong financial position to bring Hemerdon back into production

·     The Company made a loss before tax of £4,990,226, which is in line with expectations for the stage of the project

·     Workforce has been scaled up to prepare for operational readiness

·   Commencement of the sales of aggregate material from stockpiles left by the previous operator. Aggregates sales anticipated to steadily grow, providing cash flow in the run up to the restart of the mine

·   Further strengthening of the Board prior to admission including the addition of Finance Director, Nigel Widdowson

·     Completion of the Front End Engineering Design (FEED), with detailed design underway

·     Distribution agreement signed with GRS Roadstone, a UK leading construction materials company, for the sale of aggregates from Hemerdon

Chief Executive OFFICERS Statement

The first half of the financial year was one in which the Group continued to prepare for recommencement of mining operations, with significant progress made on designing the re-build of the processing plant, strengthening the management team, finalising the AIM admission process and agreeing terms with Orion Resource Partners ("Orion") for arranging project finance from a Royalty and Senior Loan Facility. Following the successful fundraise on admission to AIM in October 2021, Tungsten West is in a strong financial position, and is looking ahead to a landmark 2022.

1.         Review of activities

The Company's primary objective for the first half of the financial year was to prepare to raise the necessary funding for the processing plant-rebuild and recommencement of mining operations at Hemerdon. In October 2021, the Company completed a successful admission to the AIM market of the London Stock Exchange, issuing equity to raise £39 million before expenses, and agreed terms for the Royalty and Senior Loan Facility with Orion, securing a further approximately £36 million in project financing.

Concurrent with the fundraising process, the Tungsten West team also progressed towards achieving a number of project milestones key to restarting production. Tungsten West published an NI 43-101 Bankable Feasibility Study in March 2021, which formed the basis of the redevelopment plan at Hemerdon. Since publication, the Company has successfully completed Front End Engineering Design (FEED) and has commenced the design and build phase.

Fairport Engineering Limited has been appointed to perform interim design works on early construction packs to advance the project before construction activities commence on site.

The Tungsten West maintenance team undertook a comprehensive review to understand and address the issues historically experienced by the former operator of the Hemerdon Mine. The areas where issues were identified have been redesigned and will be enhanced during the re-build programme, in order to not only rectify the issues faced by the previous operators, but to improve significantly the overall operations and reduce downtime.

The Mining Services Contract with Hargreaves Services PLC is in place, thereby securing an experienced mining contractor with significant prior experience of the project, as well as acting as specialist crushing subcontractors for the next ten years of mining operations.

The Company entered into offtake agreements with Wolfram Bergbaau und Hutten AG and Global Tungsten and Powders Corp for purchasing a minimum of 78% of forecast tungsten production. An offtake agreement was entered into with AfriMet Resources to purchase the tin concentrate to be produced. During the reporting period, the Company sold LIMS waste product (low grade tungsten concentrate) left on site by the former operator, realising £67,870 of revenue.

As announced on 15 December 2021, the Aggregates Division has commissioned a Terex® Agg Wash 60 plant to maintain production on a temporary basis whilst the main plant installation is undertaken. The Company has been shipping aggregates since January 2021, utilizing existing stockpiles that the previous operator had deemed as waste. Current estimates show there is sufficient existing stockpiles of material to meet the Aggregates Division forecast sales until the planned recommencement of  operations.

Sales of aggregates commenced during the reporting period, with £133,016 of revenue being recognised. The Company has signed a distribution agreement with GRS Roadstone, a UK leading construction materials provider, to off-take the aggregates produced during the future mining operations.

At 30 September 2021, the Group employed 47 staff (25 employees as at 30 September 2020). Following admission to AIM, the Company has been scaling up its workforce to enable it to deliver the plant re-build project, and progress towards operational readiness.  In this vein, a number of construction and engineering sector specialists have been recruited, including a select proportion who have previous experience of the Hemerdon project.

2.         CORPORATE

During April 2021, the Company arranged an equity financing of £3.7 million through the issue of new shares to existing and new investors. The funding enabled the Company to progress planning and designs for the ore sorters and rebuild of the front end of the process plant, initiate the refurbishment and redesign of the existing plant and hire key management and financial and administrative personnel.

The Company completed a successful admission to the AIM market of the London Stock Exchange in October 2021, issuing 65,000,000 new ordinary shares of £0.01 each ("Ordinary Shares") at 60p per share, raising new funds of £39 million. Fees incurred on the AIM admission process were, in aggregate, £3.1 million, resulting in net proceeds of £35.9 million.

In October 2021, the Company also secured a US$28 million Senior Secured Loan Facility and a US$21 million Royalty sale, with Orion Resource Partners. Amounts drawn down under these facilities will be used to fund capital expenditure and working capital requirements during the plant re-build and commissioning.

As part of the AIM admission process, in October 2021, the 8% Convertible Loan taken out to acquire the project, comprising £10.0 million of principle and £0.7 million accrued interest, was converted at 30p per share into 35,935,200 Ordinary Shares.

There were a number of Board changes during the period as the Group strengthened its executive and non-executive management in advance of the Company's AIM admission.

In July 2021, Nigel Widdowson was appointed to the Board as Finance Director.

Robert Ashley was appointed Chairman of the Board in September 2021. At the same time, Grace Stevens was appointed to the Board and Chair of the Audit Committee. David Cather was appointed to the Board and Chair of the Technical Committee and Chair of the Remuneration Committee.

Stephen Fabian stepped down from the Board in September 2021. The Board would like to thank him for all his hard work in the foundation of the Company and its formative years.

3.         Results

The Group made a half-yearly loss after taxation of £4,990,226 (2020: £3,631,500).

4.         outlook

Tungsten markets have remained steady throughout Q3 and Q4 2021 with the European Metal Bulletin Ammonium Para-Tungstate price being reported around US$320 per MTU (1 MTU = 10kg).  The near term outlook for prices will likely be driven by the ongoing COVID-19 situation and any potential new lockdowns being announced due to the Omicron strain affecting demand in Europe. Global inventories remain low, and future restocking of tungsten rich drilling equipment from the Oil and Gas industry on the back of higher energy prices seems likely. This should underpin long term tungsten demand and prices.

Tin prices have performed spectacularly well throughout 2021 and continue to hover around all-time highs at US$40,000 per tonne at the date of this statement. Recent news in the tin industry includes an announcement from the world's largest producing country, Indonesia, that they are looking to ban exports of ore and concentrates from 2024 in order to encourage investment in downstream industries. Ongoing political strife and terrorist activity in Myanmar also has the potential to restrict exports from the world's second largest exporter. Overall, the outlook in the short to medium term looks robust, but in the long term the Company expects a floor price closer to US$25,000 - US$30,000 per tonne to be likely.

Demand for aggregates continues to be strong driven by both regional and national construction and infrastructure projects in the UK. There continues to be a strong opportunity to substitute imported aggregates with domestic production from sites such as Hemerdon. Recent supply constraints have led to considerable price increase for the products and we envisage the current prices being maintained over the next 6 months and beyond.

As the project progresses towards placing orders the Company is experiencing some price inflation for materials components. Management is actively monitoring pricing and availability of materials, equipment and labour and will make adjustments to planned developments if material price increases are experienced or supply constraints lead to project delays.

After completing a successful admission to AIM and securing sufficient funds to complete the investment and working capital required to restart production at Hemerdon, the Group is well positioned for 2022.

Cautionary statement

This document contains certain forward-looking statements in respect of the financial condition, results, operations and business of the Group.  Whilst these statements are made in good faith based on information available at the time of approval, these statements and forecasts inherently involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future.  There are a number of factors that could cause the actual results of developments to differ materially from those expressed or implied by these forward-looking statements and forecasts.  Nothing in this document should be construed as a profit forecast.

Enquiries

Further information on Tungsten West Limited can be found at www.tungstenwest.com

Overview of Tungsten West

Tungsten West is the 100 per cent. owner and operator of the past producing Hemerdon tungsten and tin mine, located near Plymouth in southern Devon, England. The Hemerdon mine is currently the world's third largest tungsten resource, with a JORC (2012) compliant Mineral Resource Estimate of approximately 325Mt at 0.12 per cent. WO₃. The Company acquired the mine out of a receivership process in 2019 after its most recent operators, Wolf Minerals, stopped production in 2018. While it was operator, Wolf invested over £170 million into the development of the site, the development of significant infrastructure and processing facilities. Hemerdon was producing tungsten and tin materials, under Wolf, between 2015 and 2018, before the Company entered administration and placed the mine into receivership due to a number of issues that have since been identified and rectified by Tungsten West.