Hargreaves Services plc (LON:HSP), a diversified group delivering services to the environmental, infrastructure and property sectors, has announced the positive impact to the Group of the recently announced successful fundraise by Tungsten West plc (LON:TUN).
The Group holds the Mining Services Contract (MSC) with Tungsten West for mining operations at the Hemerdon tungsten and tin mine in Devon. When the Group sold the mine to Tungsten West in 2019, there was a requirement for £8 million to be paid in annual £1 million instalments secured by the minerals lease. The Group has received £5 million in total, with three instalments still due.
Following Tungsten West’s successful fundraising announcement, the Group has now received the outstanding £3 million and confirms that this has led to the immediate release of the security held over the mineral lease. This payment settles the remaining balance, thereby removing the previously scheduled £1 million annual revenue for FY27 and FY28.
Furthermore, Tungsten West has notified the Group of its intention to terminate the MSC and assume the mining activities directly. Accordingly, an agreed £7 million compensation fee will be paid to Hargreaves no later than 15 May 2027, which will be recognised as a non-recurring gain in the current financial year.
The Group remains in discussion with Tungsten West regarding future opportunities to support this strategic asset in the UK.
Other than the impact of the transaction with Tungsten West the Group continues to trade in line with expectations and is unaffected by the conflict in the Middle East.
Commenting on the Tungsten West fund-raise, Simon Hicks, Chief Operating Officer of Hargreaves Services plc, said: “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.”
*The Company considers consensus market expectations prior to the release of this announcement for the year ending 31 May 2026 to be revenue of £286.7m, underlying PBT of £30.4m, EPS of 64.1p and cash of £15.8m.
