(Alliance News) - Tungsten West PLC on Monday said fundraising is underway to raise up to GBP9.0 million in order to try and restart production at the Hemerdon tungsten and tin mine in Devon, England.

Shares in Tungsten West plunged 45% to 5.96 pence each in London on Monday morning.

The mining company focussed on restarting production at Hemerdon said it hoped to raise a minimum of GBP5.0 million and up to GBP7.0 million through a placing of convertible loan note and up to a further GBP2 million via an open offer.

It also said a review of funding options was ongoing, looking to maximise value for its shareholders. This includes initiating a cost cutting programme with a review of operating costs, capital expenditure.

Upon completion of the fundraising, Tungsten West said Executive Vice-Chair Mark Thompson will step down, while the board is in the process of recruiting additional non-executive directors with "complementary skills and experience".

Tungsten West also drew attention to its updated Hemerdon feasibility study, announced in mid-January, as "position[ing] Tungsten West to become the largest tungsten producer in the western world".

Tungsten West Chair David Cather said: "The proceeds of the fundraising will increase the company's cash balance and allow it to progress necessary project workstreams whilst it continues to work towards full project funding. However, due to the increased risk surrounding volatile energy prices and a more conservative lending approach, some tough decisions have had to be made in order to ensure deliverability.

"Over the coming months, the company will be required to implement a number of cost saving initiatives to ensure success at Hemerdon but I remain confident in the project and believe we now have the team to help it deliver its potential."

By Greg Rosenvinge, Alliance News reporter

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