Deccan Gold Mines Extend Rally After Spain Tungsten Investment Announcement

Shares of Deccan Gold Mines were in focus on Wednesday, rallying over 10%, after the company announced plans to invest in a tungsten project in Spain.

Speaking to NDTV Profit, the company’s management said it expects profit after tax of Rs 200 crore in the next financial year.

Deccan Gold Mines said it proposes to acquire up to a 75% stake in the Logrosan project ahead of production. Logrosan is currently an early-stage exploration asset, but the company said it has the potential to convert identified mineralisation into mineral resources within one to two years.

The Logrosan project is located in a highly mineralised region of Spain, known for deposits of tungsten, tin, rare earth elements and gold. Deccan Gold Mines said early exploration and limited drilling have yielded encouraging tungsten mineralisation.

Spain has long been viewed as an attractive mining jurisdiction due to its rich endowment of critical minerals, supportive permitting and ownership framework, competitive operating costs, proximity to European industrial markets, and the absence of production-based royalties, the company said.

“Tungsten is a globally recognised critical mineral because of its strategic applications in defence, aerospace, high-temperature alloys, industrial cutting tools and electronics. Global supply remains constrained, with China accounting for over 80% of worldwide production, which enhances the importance of non-China supply sources,” Deccan Gold Mines noted.

The company added that its technical expertise in gold exploration, drilling and resource evaluation is directly applicable to tungsten projects, given similarities in geological settings and mineralisation models.