Hargreaves Services Secures £10 Million Cash Inflow from Tungsten West Agreement
Industrial group Hargreaves Services, based in County Durham, has announced it will receive a substantial £10 million in cash as a result of a recent fundraising initiative by its mining partner, Tungsten West. This development follows the sale of the Hemerdon tungsten and tin mine in Devon by Hargreaves to Tungsten West back in 2019, marking a significant financial milestone for the firm.
Details of the Financial Arrangement
The original deal included a requirement for Tungsten West to pay £8 million in annual instalments of £1 million, secured by a minerals lease. To date, Hargreaves has received £5 million, with three instalments still outstanding. Following Tungsten West's successful fundraising exercise, the Devon-based company has agreed to pay the remaining £3 million upfront to Hargreaves for the release of security over the mineral lease.
Additionally, Tungsten West has moved to terminate the Mining Services Contract with Hargreaves, which will result in a £7 million compensation fee being paid to Hargreaves by May 15, 2027. This brings the total cash inflow to £10 million, combining the accelerated payments and the contract termination fee.
Executive Commentary and Strategic Implications
Simon Hicks, chief operating officer of Hargreaves Services plc, expressed satisfaction with the outcome. He stated, "We are pleased to see the successful completion of the latest Tungsten West fund-raise, which accelerates the return of the three remaining £1 million annual instalments. The decision to terminate the Mining Services Contract is positive for both parties and results in a material cash inflow to the group, effectively representing the acceleration and de-risking of several years of trading activity."
In an update to shareholders, Hargreaves indicated that discussions with Tungsten West about future opportunities to support what it describes as a "strategic asset" for the UK are ongoing. Tungsten West aims to speed up the development of the Hemerdon mine site, targeting full commissioning by the first part of 2027.
Background and Broader Context
The 2019 deal, valued at £2.8 million, came after the mine's previous operator, Australian firm Wolf Minerals, collapsed. Tungsten West has informed investors that it is in the final stages of agreeing on a debt package of up to $85 million to further support the project.
Jeff Court, CEO of Tungsten West, commented on the progress, saying, "We are rapidly bringing Hemerdon back into production to address the ever-increasing supply gap for strategic tungsten concentrate. The project's advancement is going well across all fronts, with first phase production targeted in Q3 2026. Looking further ahead, the company is in a strong position to commission the new build crushing, screening, and ore sorting facilities in Q1 2027."
On a separate note, Hargreaves Services reported that it is on track to meet market expectations, with projected revenue of £286.7 million and an underlying profit before tax of £30.4 million for the year ending May 2026. This follows recent news of the group selling a second tranche of its renewable energy land portfolio to real estate investor Meadow Partners in a £6.8 million deal.
