A mining firm which is looking to revive production of the rare metal tungsten and tin in Devon has announced that it will be making a further 25% reduction in staff costs.
On June 2 the AIM-listed company told investors it expected a 42% reduction in headcount and monthly payroll costs via redundancy and resignations after it launched a review of operating costs, capital expenditure, and sale of surplus assets, amid “multiplying” energy, fuel and construction costs.
In today's (August 16) update on the London Stock Exchange bosses at Tungsten West said further to the restructuring exercise and cost reduction programme where the firm said it needed to secure between £5m and £6.95m, Tungsten West has initiated a further evaluation of the financing structure of the company, whereby it concluded another cost reduction programme was necessary.
This includes a 25% reduction in staff costs via redundancies, reduced hours and resignations. Chief financial officer Nigel Widdowson is among those who will be leaving, and he has stepped down from the board with immediate effect after submitting his resignation.
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Neil Gawthorpe, chief executive of Tungsten West, commented: "Although the further evaluation of the financing structure of the business has led to some difficult decisions for the board, the cost savings this will generate, combined with the funds received from the Tranche B Notes, will provide crucial funding for planning and permitting activities, and enable us to ensure continued environmental compliance, which are vital steps towards restarting the Hemerdon mine."
Bosses confirmed the company has initiated a collective consultation process with staff and expects to announce the results of this exercise in September 2023. In another move to manage liquidity, the company is in the process of agreeing deferred payment plans and restructuring supply agreements with a number of creditors.
The company can now draw the second tranche of up to nearly £3m of the convertible loan notes after fulfilling the conditions required. An initial tranche of nearly £4m was issued in May.
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Tungsten West is redeveloping the Hemerdon mine site near Plymouth, estimated to be the second-largest global reserve of tungsten, which is used in the production of light bulb filaments and cutting tools.
According to the it employed 61 staff, excluding directors, as of the end of September 2022. According to the report more than 90% of its employees live in Devon and Cornwall, with the average salary £53,000 - significantly above the average for the region.
Mr Gawthorpe added: "We will continue to work with all stakeholders, including governmental departments and organisations, and the local community, to ensure all funding and permitting requirements are in place to recommence the production of tungsten and tin at Hemerdon as soon as practicable."
Additionally, on April 3 bosses added that once it raised enough cash, executive vice-chairman Mark Thompson would step down, to be replaced by “additional non-executive directors with complementary skills and experience”.
Today they have announced the appointments of Adrian Bougourd and Guy Edwards as non-executive directors, subject to due diligence checks.
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