Tungsten Mining’s Mt Mulgine PFS Returns A$6.8B NPV at 55% IRR
Key Takeaways
- The Mt Mulgine PFS returns a pre-tax NPV₈ of A$6,823M and IRR of 55% on Fastmarkets forecast pricing, rising to A$15,553M NPV and 113% IRR at current spot prices.
- At an AISC of US$127/mtu net of by-product credits, Mt Mulgine sits materially below every ex-China comparable — the nearest peer, Nui Phao, operates at approximately US$180/mtu.
- The Mulgine Trench Ore Reserve has been updated to 144 Mt at 0.10% WO₃, a 6% increase on the maiden reserve, with by-product credits from molybdenum, copper, gold, and silver reducing the gross cash cost from US$346/mtu to US$53/mtu.
- The project schedule targets DFS completion in Q3 2027, a Final Investment Decision in Q1 2028, and first production in Q2 2029 — with Worley appointed as EPCM engineering lead.
- Pre-production funding of approximately A$870M has not been secured, and TGN has explicitly flagged that funding may only be available on terms dilutive to existing shareholders.
Mt Mulgine PFS confirms potential for world’s largest and lowest cost tungsten project
Tungsten Mining NL has completed its Pre-Feasibility Study (PFS) for the Mt Mulgine Tungsten Project in Western Australia, confirming the project’s potential to be the world’s largest and lowest cost tungsten producer, based on independent global tungsten market analysis by Fastmarkets. The base case returns a pre-tax NPV₈ of A$6,823M and pre-tax IRR of 55% on Fastmarkets forecast pricing, with post-tax figures of A$4,796M NPV and 48% IRR.
The development timeline targets DFS commencement in September 2026, a Final Investment Decision (FID) in Q1 2028, and first production in Q2 2029.
Key headline metrics from the PFS:
- Mine life: 21 years
- Processing rate: 8 Mtpa base case, expandable to 16 Mtpa
- Initial capital: A$870M (±25%, AACE Class 3/4)
- AISC (net of by-product credits): US$127/mtu (A$181/mtu)
- C1 cash cost: US$53/mtu
- First production target: Q2 2029
Note: The mine plan contains 13% inferred resource. There is a low level of geological confidence associated with inferred mineral resources, and there is no certainty that the production target will be realised.
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Outstanding PFS economics across both base and expansion cases
The PFS was evaluated on a real, ungeared, 100% equity basis at an 8% real discount rate. Both a base case (8 Mtpa) and an indicative expansion case (ramping from 8 to 16 Mtpa from Q2 2034) were assessed across two pricing scenarios: Fastmarkets forecast and spot prices as at 14 August 2026.
The expansion case is presented for indicative purposes only and does not represent a decision to expand. It would require incremental Stage 2 capital of A$420M, expected to be funded from operating cashflow, and reduces AISC further to US$103/mtu by spreading fixed costs across twice the production volume.
| Scenario | Pricing | NPV₈ Pre-Tax | IRR Pre-Tax | Payback (months from first revenue) |
|---|---|---|---|---|
| Base Case (8 Mtpa) | Fastmarkets forecast | A$6,823M | 55% | 32 |
| Base Case (8 Mtpa) | Spot (14 Aug 2026) | A$15,553M | 113% | 16 |
| Expansion (16 Mtpa) | Fastmarkets forecast | A$8,195M | 57% | 35 |
| Expansion (16 Mtpa) | Spot (14 Aug 2026) | A$18,351M | 113% | 16 |
The spot price scenario reflects commodity prices as at 14 August 2026 and should not be taken as a base case assumption. On sensitivity analysis, post-tax NPV is most exposed to the AUD:USD exchange rate and tungsten price: a 20% move in FX shifts NPV between A$3.56B and A$6.52B against a base case of A$4.80B.
Why tungsten, and why now — a structural supply deficit driving demand
Tungsten holds the highest melting point of all elements except carbon (around 3,400°C), making it indispensable to defence, aerospace, industrial cutting tools, and electronics. It is a metal of considerable strategic importance to modern industrial development.
The market timing for Mt Mulgine’s development could not be more pointed. The Ammonium Paratungstate (APT) price, the primary benchmark for tungsten, has remained at US$3,000/mtu following a sharp increase through 2025 and early 2026. Chinese export restrictions, tighter quotas, and dependence on imported concentrate have cut primary availability, shifting the market into a structural deficit predicted to persist through 2028 and beyond.
Demand is forecast to grow from a current base of 154 kt to 215 kt by 2035, a predicted compounded annual growth rate of 3.4%, driven by increasing defence and manufacturing requirements (Fastmarkets, August 2026). Current supply stands at approximately 153 kt, underlining the widening gap.
Where Mt Mulgine’s cost position becomes particularly compelling is in benchmarking against existing producers. At an AISC of US$127/mtu (net of by-product credits, per Fastmarkets), the project sits materially below the ex-China producing-asset range of US$180 to US$425/mtu. The nearest comparable producer, Nui Phao, operates at approximately US$180/mtu. Mt Mulgine is entering development as the tungsten market shifts into a structural deficit.
Project fundamentals — resource, reserves, and the road to production
The Mulgine Trench Ore Reserve has been updated to 144 Mt at 0.10% WO₃, classified entirely as a Probable Ore Reserve under JORC 2012. This represents an increase of 9 Mt (approximately 6%) on the maiden Ore Reserve of 135 Mt declared in January 2021, with no material change to grades.
The total Mineral Resource at Mulgine Trench stands at 247 Mt at 0.11% WO₃, with meaningful by-product credits from molybdenum, copper, gold, and silver. These by-products are a significant contributor to the project’s low AISC, with the gross average cash cost per WO₃ mtu of US$346 reduced to US$53 once by-product credits are applied.
An ongoing 40,000 m RC drilling programme is targeting an exploration target of 165–200 Mt at 0.10–0.12% WO₃, aiming to upgrade approximately 100 Mt to Indicated category by Q1 2027. This exploration target is conceptual in nature; there has been insufficient exploration to estimate a Mineral Resource, and it is uncertain whether further exploration will result in the estimation of a Mineral Resource.
The project benefits from a strong Western Australian jurisdiction: all mining leases are granted, established infrastructure is in place, and Worley has been appointed as EPCM engineering lead.
Project schedule milestones:
- Q3 2026 — PFS complete
- Q3 2027 — DFS complete (targeting ±15% accuracy)
- Q3 2027 — All mining approvals
- Q1 2028 — Final Investment Decision (FID)
- Q2 2029 — First production
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Five priority actions taking the project toward a final investment decision
The PFS identifies the following immediate priority actions to keep the forward work programme aligned with the proposed delivery schedule:
- Award DFS engineering services contract
- Complete supporting metallurgical testwork
- Continue water exploration drilling on and off-tenure
- Progress approvals ahead of construction (Mine Development and Closure Proposal targeted for submission January 2027; works approvals March 2027)
- Integrate updated resource model into the DFS following drilling completion expected by Q1 2027
Each of these workstreams feeds directly into the project’s next major de-risking milestones. DFS completion (targeted Q3 2027), FID (Q1 2028), and construction commencement each represent potential re-rating events for the stock as the project moves from study-phase to execution.
Investors should note that funding has not been secured. The announcement is explicit that pre-production funding in the order of A$870M may be required, and there is no certainty that TGN will be able to source that amount when needed. The company intends to pursue a combination of debt and equity, strategic partners, government support, bond facilities, and possible offtake prepayments. It is also possible that funding may only be available on terms dilutive to existing shareholders, or that TGN could pursue other value realisation strategies such as a sale, partial sale, or joint venture of the project.
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