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Aspiring tungsten producer Hazelwood Resources Ltd has flagged a capital raising, after it bought a 60% stake in a Hong Kong company.
The Perth-based Hazelwood says it has bought a 60% stake in the Asian Tungsten Products Co Ltd, which has a permit to build a ferrotungsten plant in Vietnam.
Hazelwood will pay $825,000 for the stake in the company, and will fund six percent of the capital expenditure for the plant, as well as working capital.
"Total capital costs for stage one of the project are estimated at approximately $16.3 million ($A17.77 million), with a further $8.2 million ($A8.94 million) required to increase the capacity in stage two of the project," Hazelwood said.
"A capital raising program will be implemented to fund Hazelwood's commitments," the company said in a statement.
Ferrotungsten is an alloy used in steels to add hardness and heat resistance and is worth more than tungsten concentrate.
"The tungsten concentrate from our proposed Big Hill operation could provide a secure supplemental source of high purity feed for the new plant, providing additional margins for Hazelwood," said Hazelwood chief Terry Butler-Blaxell.