Europe’s appetite for secure critical mineral supply is reshaping how tungsten projects are conceived, financed, and permitted.
With this in mind, a new assessment from northern Portugal sets out a case for a capital‑disciplined underground development that leans on proven mining methods, gravity‑dominant processing, and a permitting profile already a step ahead of many peers.
Allied Critical Metals Inc. (TSX:ACM) has released the initial Preliminary Economic Assessment (PEA) for its 100 per cent-owned Borralha Tungsten Project in northern Portugal—an EU‑based, underground development centred on the Santa Helena Breccia deposit and an initial 11‑year mine plan. The study outlines technically robust design choices and strong economics across multiple pricing frameworks, while emphasizing meaningful growth optionality through drilling and potential throughput optimization.
This article is disseminated in partnership with Allied Critical Metals Inc. It is intended to inform investors and should not be taken as a recommendation or financial advice.
Notably, the mine design and cut‑off selection were developed using a conservative US$659/mtu WO₃ assumption. Recent reported market prices of approximately US$1,998/mtu highlight the project’s leverage to current market conditions, while also underscoring the importance of long‑term pricing realism in economic planning.
Project snapshot
- Location: Salto parish, Montalegre municipality, Vila Real district, Portugal
- Tenure: ~382.5 ha continuous exploitation concession (3.82 km²)
- Mining method: Predominantly long‑hole open stoping with cemented paste backfill; localized drift‑and‑fill in narrower high‑grade zones
- Processing: Conventional crushing, grinding, gravity concentration, with DMS pre‑concentration; production of a ~65 per cent WO₃ wolframite concentrate
- Permitting: Favourable Environmental Impact Declaration (DIA) received in January 2026, enabling progression to RECAPE and construction permits
Initial mine plan – A strong base with expansion potential
Mine life: ~11 years
Processing rate: 1.4 Mtpa
Average mill feed grade: 0.20 per cent WO₃
Average annual production: ~1,708 t WO₃
Peak annual production: 2,388 t WO₃
All‑in sustaining cost (AISC): ~US$303/mtu WO₃ (≈ C$413.84/mtu)
The initial plan incorporates measured, Indicated, and Inferred Mineral Resources from Santa Helena Breccia and maintains steady mill feed to support stable concentrate output. The deposit remains open along strike and at depth, anchoring a multi‑stage growth strategy that extends beyond the 11‑year blueprint.
Important PEA caveat: Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. Inclusion of inferred material introduces uncertainty; there is no certainty the PEA results will be realized.
Mineral Resource framework and cut‑off logic
The PEA builds on the 2025 Mineral Resource Estimate (MRE) for Santa Helena Breccia (NI 43‑101 compliant):
- MRE cut‑off grade: 0.09 per cent WO₃, set on “reasonable prospects” for eventual economic extraction under conceptual underground + gravity assumptions
- Underlying price for cut‑off selection: US$550/mtu WO₃ with ~80 per cent assumed recovery (for MRE cut‑off determination only)
- Drilling coverage: 41 holes plus trenching over ~400 m strike; depths >350 m below surface
- Open extensions: Along strike and at depth
This updated MRE reflects a material tonnage and confidence increase versus March 2024, setting a firmer foundation for mine planning while leaving headroom for additional conversion and expansion.
In an update, the company added that Borralha Project demonstrates strong economics with an after‑tax NPV(8 per cent) of C$473 million, an IRR of 48.8 per cent, and a rapid 2.2‑year payback from the start of production (approximately 4.2 years from construction start) at US$1,000/mtu WO₃. The project is designed as a capital‑efficient development with an initial capital cost of C$125 million and a compact, integrated infrastructure plan featuring hydro‑electric power, water recycling, road access, and paste backfill. At the same price case, Borralha is expected to generate average annual revenue of C$252.5 million, EBITDA of C$142.2 million, and free cash flow of C$96.3 million, supporting strong cash generation over the initial mine plan. Sensitivity analysis highlights significant upside, including an IRR of 78.4 per cent and an NPV of C$963.8 million.
Mine design, dilution/recovery, and production schedule
Selected mining method:
- Long‑hole open stoping with cemented paste backfill (favoured for steep dips, continuity, rock mass, productivity, and footprint reduction)
- Drift‑and‑fill in narrow high‑grade panels to enhance recovery
- Open pit and alternative UG methods were screened out on environmental/scale/efficiency grounds
Production schedule and modifying factors:
- Nominal throughput: 1.4 Mtpa for ~13.4 Mt LOM processed
- Average LOM grade: ~0.20 per cent WO₃
- Dilution: ~8 per cent (primary/secondary stope average); ~7.5 per cent for drift‑and‑fill
- Recovery: ~89 per cent mining (≈90 per cent primary, ~88 per cent secondary); 95 per cent for drift‑and‑fill
Metallurgy and concentrate quality:
- WO₃ recovery: ~75 per cent (preliminary)
- Concentrate: wolframite ~65 per cent WO₃
- By‑products: copper (~60 per cent recovery, ~21 per cent Cu concentrate), tin (~30 per cent recovery, ~50 per cent Sn concentrate); silver may add credits (pending further work)
Process flowsheet and site infrastructure
Flowsheet highlights:
- Three‑stage crushing to ~6 mm
- DMS pre‑concentration (6–2 mm), rejecting ~40 per cent of mass
- Grinding to ~1 mm and gravity concentration (spirals + tables)
- Magnetic/electrostatic finishing for WO₃, plus flotation for Cu/Sn
- Filtered tailings with partial paste backfill to UG stopes
Infrastructure advantages:
- Established road access and grid power
- Underground configuration limits surface footprint
- Dry‑stack tailings concept and closed‑loop water system
Costs, capital, and price scenarios
Operating costs (LOM):
- ~US$49/t processed
- Equivalent to ~US$245/mtu WO₃ (at 0.20 per cent head grade, 75 per cent recovery)
AISC:
- ~US$303/mtu WO₃, positioning Borralha competitively on the cost curve
Capital (±35 per cent PEA accuracy):
- Initial: ~US$91M (≈ C$124.3M)
- Sustaining: ~US$87M (≈ C$118.8M)
- Total LOM: ~US$178M (≈ C$243.1M)
Price frameworks used in the PEA:
- Base (Argus long‑term, variable): averages ~US$704/mtu (e.g., ~$763/mtu in 2028, easing to ~$677/mtu by 2040)
- Flat US$1,000/mtu
- Flat US1,500/mtu
Design basis: mine geometry and cut‑off at US$659/mtu WO₃, preserving conservative technical assumptions while allowing the economic model to reflect updated long‑term pricing.
Sensitivity:
Economics are most sensitive to tungsten price, then capital, operating costs, and metallurgical recovery. At the Base Case, the PEA indicates robust operating margins, with significant torque to higher price scenarios. (A flat‑price sensitivity spanning US$500–$1,700/mtu underscores this leverage.)
Market context: With recent spot indications near US$1,998/mtu, the project’s upside torque is evident—but long‑term planning prudently anchors on conservative inputs.
Leadership insights
“This initial PEA confirms the Borralha Project as a high-return, capital-efficient tungsten development project in a Tier-1 European jurisdiction. At US$1,000 per mtu (significantly below current reported market pricing) the Borralha Project generates a 48.8 per cent after-tax IRR with modest initial capital of approximately US$91 million,” Roy Bonnell, Allied’s CEO commented in a media release. “Importantly, this PEA reflects only the Santa Helena Breccia and an initial 11-year mine plan. With future exploration work and the 20,000 metres of drilling currently underway, we are focused on expanding resources, extending mine life and enhancing overall project scale. We believe we are at the beginning of unlocking the Borralha Project’s full potential.
Combined with a favourable Environmental Impact Declaration, we believe that this PEA opens the door to project-level financing for both our industrial-scale plant and our pilot plant at the Vila Verde Project.”
Permitting and positioning
Borralha’s favourable DIA in January 2026 marks a key de‑risking milestone, moving the project toward RECAPE and construction permitting. Within the EU’s critical raw materials agenda, Borralha ranks among the largest undeveloped tungsten resources in the bloc—potentially advancing supply chain security with an underground, gravity‑dominant development that reduces several typical risk vectors (surface footprint, tailings approach, and environmental pathway).
Growth pipeline: Drilling, conversion, and throughput options
A fully funded 20,000‑m drill program is now underway to:
- Expand the current 13.0 Mt Measured & Indicated resource
- Convert Inferred into higher‑confidence categories
- Extend mine life beyond 11 years
- Evaluate throughput optimization and scale growth
Given mineralization remains open at depth and along strike, Santa Helena Breccia offers straightforward targets for step‑outs and infill. The 1.4 Mtpa plant layout anticipates potential future debottlenecking, subject to engineering outcomes and market conditions.
Risks and uncertainties
As a PEA‑level study, the analysis is preliminary and includes inferred material:
- Resource confidence: Inclusion of inferred tonnage adds uncertainty to schedules and economics
- Market risk: Tungsten price volatility and FX can materially affect returns
- Cost/schedule risk: Potential capital escalation, supply chain constraints, and lead times
- Technical risk: Metallurgical variability, underground geotechnical/hydrogeological conditions
- Regulatory path: Permitting timelines and conditions remain critical path items
- People/equipment: Availability in a competitive mining services market
Next steps and QA/QC rigour
Recommended work program:
- Infill + step‑out drilling (conversion and expansion)
- Metallurgical optimization and variability test work
- Geotechnical/hydrogeological campaigns
- Engineering advancement toward Pre‑Feasibility, ongoing RECAPE
- Environmental management and design integration
Data integrity: The company reports a comprehensive QA/QC regime with ISO‑accredited preparation and certified lab analysis, routine CRMs/blanks/duplicates, re‑assay triggers for outliers, and independent verification by a qualified person—collectively supporting the MRE and PEA data confidence appropriate to study level.
Investor’s corner
Allied Critical Metals’ initial PEA for Borralha presents a technically coherent and capital-efficient underground tungsten development within the EU, anchored by conservative design assumptions, competitive AISC (~US$303/mtu), and a favourable environmental declaration that advances permitting. Allied Critical Metals stock has risen more than 450 per cent since this time last year. With recent market pricing well above design inputs and a 20,000‑m drill program in motion, the project carries notable torque to price and scale—balanced by standard PEA‑level uncertainties around resource confidence, costs, and metallurgical variability.
This is a substantive first step, not a final verdict. Consider deepening due diligence across resource quality and conversion rates, metallurgy/variability and by‑product credits, capital discipline and supply chain readiness, permitting milestones and timelines, and sensitivity to WO₃ prices and FX. A close read of the full technical report, QP sign‑offs, and forthcoming drilling updates will be key to validating the investment case as the project advances toward pre-feasibility.
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