Tungsten Mining (ASX:TGN) has reported significant progress at its Watershed tungsten project in Queensland during the quarter ending 30 June 2026, positioning the company for a final investment decision (FID) in September 2026.

The company completed a preliminary economic evaluation (PEE) at Watershed outlining a potentially capital-efficient development scenario. Key metrics from the study include a pre-tax NPV8 of A$1.309 billion, a pre-tax IRR of 198%, estimated pre-production capital of A$274 million, and payback within nine months of first ore processing.

Tungsten is classified as a critical mineral by the Australian, United States, and European governments, reflecting its use in cemented carbides, wear-resistant alloys, and defence applications. Global tungsten supply is heavily concentrated, with China accounting for the majority of world production, and Western governments have prioritised supply chain diversification for the metal.

The project already holds granted mining leases and a current environmental authority permitting open-pit development. Secondary approvals and additional development work are ongoing. Tungsten Mining is advancing multiple workstreams in parallel — including engineering, project financing, regulatory approvals, procurement, and commercial arrangements — with a target for first production by the end of H1 2027.

In its quarterly update to shareholders, the company described the June quarter as materially advancing its two-project strategy. At Watershed, the updated mineral resource estimate and PEE defined a pathway toward the targeted FID, while at Mt Mulgine in Western Australia, the company launched its largest drilling campaign to date.

The Mt Mulgine program is designed to test extensions beneath the existing Mulgine Trench Mineral Resource and to gather metallurgical and geotechnical data for the ongoing pre-feasibility study (PFS). Tungsten Mining considers Mt Mulgine its long-term growth platform, with quarter activities focused on expanding the resource base and progressing technical studies to support future development.

Chairman Gary Lyons said: "The June quarter substantially advanced Tungsten Mining's development strategy. At Watershed, the updated mineral resource and preliminary economic evaluation defined a targeted pathway toward a September 2026 final investment decision and potential first production in 2027."

"At Mt Mulgine, our largest drilling campaign to date is now underway to test the scale and continuity of this globally significant tungsten system," Lyons added.

Looking ahead to the September quarter, Lyons said the company's focus is execution — advancing Watershed engineering, financing, approvals, and procurement planning while delivering drilling results and progressing the Mt Mulgine PFS.

Tungsten Mining shares were steady at 21.0 cents, with a market capitalisation of A$293.2 million.