- 01Watershed DFS: A$1.105b post-tax NPV, 57% IRR.
- 02December FID targeted; first production planned for June 2027.
- 03Funding and binding offtake remain outstanding.
Tungsten Mining (ASX: TGN) has completed a definitive feasibility study for its Watershed tungsten project in Far North Queensland, estimating a pre-tax net present value of $1.57 billion and a 70% internal rate of return.
Discounted at 8%, the base case projects a post-tax NPV of $1.105 billion and a post-tax IRR of 57%, with pre-tax capital payback 18 months after first revenue.
The developer is targeting a final investment decision in December and first tungsten production in June 2027, although financing and binding sales agreements remain outstanding.
Principal project approvals are in place and early construction works have begun, with $57.8 million committed to site establishment, civil works, accommodation, and long-lead equipment.
Forecast Prices Integral
The DFS base case uses a life-of-mine average ammonium paratungstate price of US$1,500 per metric tonne unit (mtu), compared with a quoted October spot price of US$2,675/mtu.
Applying that higher spot price illustratively lifts pre-tax NPV to $4.121b, while project returns remain sensitive to tungsten pricing, product payability, recovery and exchange rates.
Total pre-production capital is estimated at $264.4m, including the $57.8m already spent or committed, leaving $206.6m of go-forward capital expenditure from November 2026.
The model forecasts a 62% pre-tax operating margin, with a life-of-mine C1 cash cost of US$440/mtu and all-in sustaining costs of US$538/mtu.
On the base-case assumptions, cumulative pre-tax cash flow reaches $2.84b across the project life.
Extended Processing Life
Watershed has a Probable Ore Reserve of 36.6 million tonnes grading 0.124% tungsten trioxide (WO₃), containing 45,500t of WO₃.
The planned open pit is scheduled to mine 40.5Mt of ore over 10.2 years, while processing is expected to continue for 13.1 years.
The study forecasts production of 31,279t of contained WO₃, averaging approximately 2,700t annually during steady-state operations from 2029 to 2037.
About 10% of the production target relies on Inferred mineral resources, which carry low geological confidence and are excluded from the Ore Reserve; conversion to higher-confidence resources and delivery of that portion of production are not assured.
An Ore Reserve-only evaluation produces a pre-tax NPV of $1.4b, compared with $1.569b in the broader base case.
Funding and Offtake Critical
The project has an estimated peak funding requirement of $277m, including previously invoiced costs, with approximately $255m still to be funded and no assurance that capital will be available on acceptable terms.
Potential lenders have submitted non-binding term sheets supporting debt funding of up to 70% of the project, while negotiations continue over the final mix of debt, existing capital, and possible new equity.
Tungsten Mining is also discussing concentrate sales with refiners, traders and prospective partners across Europe, South-East Asia, Japan and the US, but has yet to execute any binding offtake agreement.
With site works under way, the December investment timetable and June production target depend on closing those commercial arrangements and completing construction and commissioning on schedule.
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