ANDRIEVSKII.CH | Tungsten West (LSE): Accounting Loss Masks a Strengthening Balance Sheet Ahead of Hemerdon Restart
Tungsten West (LSE) reported audited financial results for the year ended 31 March 2026 that, at first glance, appear disappointing. The company's statutory net loss widened to £175.5 million from £24.7 million a year earlier. However, the deterioration was driven almost entirely by a £167.3 million non-cash finance adjustment arising from the conversion of Convertible Loan Notes rather than by weaker operating performance. Management emphasized that the accounting charge had no impact on cash flow, liquidity or the company's ability to complete the Hemerdon restart.
Beneath the headline figures, the results point to a company moving from project financing toward operational execution. During the financial year, Tungsten West more than halved its operating loss to £7.9 million, generated its first £0.6 million of tungsten concentrate sales in December 2025 and finished the period with £25.5 million in cash following a £43 million equity raise completed in February 2026.
The company also continued advancing construction at the Hemerdon tungsten and tin mine in Devon, strengthened its leadership team and maintained an excellent safety record, reporting zero Lost Time Incidents despite a significant increase in construction activity.
Following the reporting period, Tungsten West entered the next phase of the project. The company commenced operation of the fines gravity circuit and produced its first tungsten and tin concentrates as part of the commissioning process. Management said restart construction remains on schedule and within budget, with full commissioning targeted by the end of the first quarter of 2027. More than 150 employees have now been recruited to support the planned production ramp-up.
A further milestone came in August 2026, when the UK Government's National Wealth Fund committed up to £71 million of equity and debt financing. The investment leaves the Hemerdon project fully funded through to full production and enabled the company to repay its short-term bridge financing facility, removing one of the key risks that had previously weighed on the investment case.
The timing of the restart could prove favourable. Tungsten prices have strengthened amid tightening global supply and Chinese export restrictions, increasing the strategic importance of alternative Western sources of the critical mineral. As one of the few large-scale tungsten projects approaching production outside China, Hemerdon is well positioned to benefit from growing demand for secure supply chains across defence, aerospace and advanced manufacturing.
Andrievskii Verdict
The statutory loss is unlikely to be the metric that institutional investors focus on. The £167.3 million accounting adjustment reflects capital restructuring rather than operational weakness and has no impact on the company's liquidity.
More important is the shift in the underlying investment case. Tungsten West has significantly reduced operating losses, restored its cash position, generated its first commercial revenues and secured sufficient funding to bring Hemerdon into production.
The investment story has therefore moved beyond financing. The market will now judge management on execution—completing construction on schedule, commissioning the operation by the end of the first quarter of 2027 and demonstrating sustainable commercial production. If those milestones are achieved, Hemerdon could emerge as one of the most strategically significant Western tungsten assets as governments and manufacturers seek to diversify critical mineral supply chains away from China.
Ultimately, it is the currency that determines whether the defensive portion of a portfolio will preserve its purchasing power when that capital is actually needed.
Aleksei Andrievskii | Advisory Board Member, Bendura Bank AG | Liechtenstein