IFG Capital Signs Exclusive Agreement for $300m Tungsten Cluster in Uzbekistan; Aims to Become a Top-three Global Producer

LUXEMBOURG, October 1, 2018 /PRNewswire/ --

IFG Metals & Mining, a division of IFG Capital Partners SA ("IFG"), the Central Asian focused advisory and investment company, has signed an agreement with the State Committee of the Republic of Uzbekistan on Geology and Mineral Resources ("GOSCOMGEOLOGY") giving it exclusive rights to carry out feasibility studies and if these are successful to exploit seven tungsten deposits in Uzbekistan with the aim of creating a cluster for tungsten production and processing. This is the largest such foreign investment in Uzbekistan's mining industry since the end of the Soviet Union, with investments totalling $300 million over the 25-30 year working life of the cluster, which is expected to directly create 1,500 jobs.

IFG has developed the tungsten cluster and is the leading principal investor in the project. SUN Group, which is active in India, Russia, West Africa and other emerging markets, has agreed to co-invest with IFG in the exploration and development of the tungsten cluster, subject to further due diligence. As a result, IFG, GOSCOMGEOLOGY and SUN Group on 28 September signed an agreement on joint development of seven tungsten deposits in Uzbekistan during the Indian-Uzbek Business Forum held as part of the official visit of Uzbekistan's President Shavkat Mirziyoyev to India.

IFG intends to conduct a feasibility analysis into the exploration and development of the Ingichke, Gussay, Sarykul, Kara-Tyube, Lyangar and Koytash tungsten deposits, with the purpose of processing ore into concentrate. Should the studies produce positive results, IFG has the exclusive rights to manage the industrial development of the deposits. The agreement follows the announcement in July that IFG will conduct a feasibility study on the development of the Yakhton tungsten deposit in the Samarkand region of Uzbekistan. This deposit will become part of the cluster.

Olga Ponkratova, Managing Partner of IFG and head of IFG Metals and Mining, said: "Growing shortfalls between global supply and demand have recently driven the tungsten price to its highest levels since September 2014, and there is a growing expectation that these stronger pricing levels for tungsten will continue for some time. This favorable market environment, coupled by the strong support that we have received from the government, makes this project possible."

Shiv Khemka, Vice Chairman of SUN Group, said: "SUN Group has long ties with the former Soviet Union spanning over 60 years. SUN, along with our partners, is delighted to be working with IFG Capital on developing this significant tungsten cluster. We hope this collaboration will help strengthen the India-Uzbekistan relationship."

Preliminary geological research indicates around 130 thousand tons of WO3 (tungsten oxide) in the seven deposits with the average grade higher than in comparable projects as well as lower processing costs due to favourable business conditions in Uzbekistan. IFG plans to build two mobile processing factories that will serve the deposits, and to export 100% of produced tungsten to North America and the EU.

IFG is drilling verification bores at each deposit to verify existing reserves and confirm historical exploration data in accordance with international JORC standards. The first samples from the Yakhton deposit have already been sent abroad for metallurgical testing according to best international practice. The first results are expected in Q4 2018.

About IFG Capital SA 

IFG Capital is an independent investment firm focusing on Uzbekistan and wider Central Asia. It offers a full range of business and financial advisory services as well as extensive metals & mining expertise through its subsidiary IFG Metals & Mining. It is led by a team of professionals who combine best western practice with intimate local knowledge, operating from its head office in Luxembourg with a Central Asian regional office in Tashkent. More information can be found at http://www.ifg-capital.com

About SUN Group 

SUN Group is a leading principal investor and private equity fund manager in India, Russia, West Africa and other emerging and transforming markets. SUN Group, promoted by the Khemka family, is a private group that has been active in India for more than 116 years and first started working with the Former Soviet Union in 1958. The group has been active in various sectors including; Oil & Gas, Mining, Real Estate, Infrastructure, Food & Beverages, High Technology, Renewable Energy and Electric Mobility. http://www.sungroup-global.com/english/overview/at-a-glance.asp

About tungsten 

Tungsten is a rare metal, unique in its robustness and with the highest melting point of all known elements. Tungsten has numerous applications, and analysts expect demand to grow at around 4% CAGR for the foreseeable future, driven by demand from the defence, industrial, oil and gas and aircraft sectors, as well as by increasing demand from emerging markets, given the extensive use of tungsten in automobile manufacturing (25% of total consumption).

Supply constraints have been another major driver for favourable tungsten market conditions. China accounts for 80% of global production, but despite being the world's biggest producer of tungsten remains a net importer of the metal, and has in recent years banned exports of tungsten concentrate. Outside of China, Russian production is decreasing with very limited mine life remaining for some projects, and the majority of new projects globally are likely to simply replace existing projects with a few years of mine life remaining.