30 Apr 2019 11:57
30 April 2019
W Resources Plc
("W" or the "Company")
Final Results for the Year Ended 31 December 2018
W Resources Plc (AIM: WRES), the tungsten, copper and gold exploration and development company with assets in Spain and Portugal, announces its audited financial results for the year ended 31 December 2018.
HIGHLIGHTS
La Parrilla, Tungsten and Tin, Spain
· Completed the US$35m debt funding from BlackRock Financial Management Inc. in February 2018.
· Awarded a grant of €5.3m for the La Parrilla Mine project by the Junta de Extremadura Government in Spain to W's 100% owned subsidiary, Iberian Resources Spain SL.
· Completed Engineering, Design and Procurement for the La Parrilla mine and plant and installed power, water, road, warehouse and office facilities.
· Completed construction and commissioning to design capacity of the Metso 350 tonne per hour Crusher Plant.
· Completed construction of the Jig and Mill Plant and commenced commissioning in April 2019.
· Awarded the Concentrator Plant contract to allmineral Aufbereitungstechnik GmbH & Co. KG of Germany and near construction completion.
· Commenced tungsten production and shipments.
· Secured offtake agreements with Wolfram Bergbau und Hütten AG and directly with a leading supplier to the USA tungsten markets for approximately 80% of planned production tonnage from the T2 phase.
· Strengthened the W key Executive Team in September with the appointment of Juan Garcia Valledor as La Parrilla Operations Manager and Tomás Bragado as La Parrilla Plant Manager.
Regua and Tarouca, Tungsten, Portugal
· Secured land access and approvals including purchase 20.3 hectares of land covering the main area of the Régua mine.
· Extended the Régua Trial Mine Licence for a further year to 19 June 2020.
· Completed a 1,515 metre Reverse Circulation ("RC") drilling campaign at the Tarouca tungsten and tin exploration licence which identified very high tungsten grade intersections.
Sao Martinho, Gold, Portugal
· Completed a 2,000m RC drilling campaign at the São Martinho gold project during July which delivered very encouraging grades.
· SRK Consulting (UK) Ltd completing an upgraded Australasian Joint Ore Reserves Committee compliant resource estimate.
· Applied for a trial mine licence to advance São Martinho to trial mining and production.
Chairman of W, Michael Masterman commented: "La Parrilla is funded and near project completion. The project is on budget with tungsten and tin production and sales. The project is set to move to large scale production levels at low cost in the third quarter following construction completion of the new Concentrator Plant this quarter. This will allow W Resources to deliver a progressive increase in production in the third and fourth quarters of 2019.
"Régua in Portugal is approved and advanced and will follow closely behind the development of La Parrilla. The grade control and extension drilling has identified significant thick high-grade intersection which will be incorporated in resource estimates and mine plans. Exploration success at Tarouca will feed into and further enhance Régua hub development economics.
"We have advanced exploration progress at our São Martinho gold discovery and will move to the next phase of extension drilling and trial mine production.
"The Executive team with the strong support of the Board is executing development well and this is a credit to the calibre of the management team."
Financial Statements for the Year Ended 31 December 2018
A full copy of the W Resources Consolidated Financial Statements for the year ended 31 December 2018 is available on the Company's website at www.wresources.com. An extract of the Consolidated Financial Statements for the year ended 31 December 2018 is presented below.
Enquiries:
W Resources Plc Michael Masterman T: +44 (0) 20 7193 7463 www.wresources.co.uk | Grant Thornton UK LLP Colin Aaronson / Seamus Fricker T: +44 (0) 20 7383 5100 |
Turner Pope Investments (TPI) Ltd Andy Thacker T: +44 (0) 203 621 4120 www.turnerpope.com | Gable Communications Justine James T: +44 (0) 20 7193 7463 M: +44 (0) 7525 324431 |
APPENDIX I - JORC Compliant Mineral Reserves and Resource Estimates
La Parrilla Proven and Probable Mineral Reserves - JORC 2012
Tonnes | Grade | Metal Content | Grade | Metal Content | |||||||
'000 | WO3 (ppm) | WO3 (t) | Sn (ppm) | Sn (t) | |||||||
Proven | 1,177 | 995 | 1,171 | 251 | 295 | ||||||
Probable | 28,577 | 928 | 26,511 | 111 | 3,156 | ||||||
Total | 29,754 | 931 | 27,683 | 116 | 3,451 | ||||||
Note: The La Parrilla mine reserves are set out in the table above are based on the optimal LOM Pit. Estimate for La Parrilla Deposit using a 330 ppm WO3 Cut-Off Grade and 5% dilution. All tonnes quoted are dry tonnes. Differences in the addition of tonnes to the total displayed is due to rounding.
The La Parrilla JORC-compliant mineral reserves update was fully disclosed, with JORC Table 1 in a Company news release on 14 June 2017. Mr Aden Munoz of AYMA Mining Solutions SL, a Spanish Mining Engineering company based in Seville was the Competent Person responsible for the La Parrilla Proven and Probable Mineral Reserves. The mineral reserves are based on indicated and measured resources prepared by Golder Associated in March 2017 (RNS, 11 May 2017).
Mineral Resources for La Parrilla Deposit Using a 400 ppm WO3 Cut-Off Grade within Mineralised Domains - JORC 2012
Classification | Tonnage (Mt) | WO3 (ppm) | Sn (ppm) |
Measured | 1 | 1,115 | 278 |
Indicated | 35 | 1,004 | 110 |
Inferred | 13 | 974 | 97 |
Total | 49 | 998 | 110 |
The La Parrilla JORC-compliant mineral resource update was fully disclosed, with JORC Table 1 in a Company news release on 11 May 2017. Mr Andrew Weeks (Golder Associates Pty Ltd) was the Competent Person responsible for the Mineral Resource Estimate for the La Parrilla deposit.
Régua JORC Compliant Mineral Resource Estimate
Category | Tonnes | WO3% | Cut-off | |
Indicated | 3.76mt | 0.304 | 0.1% WO3 | |
Inferred | 1.70mt | 0.227 | 0.1% WO3 | |
Total | 5.46mt | 0.280 | 0.1% WO3 |
The Régua JORC-compliant mineral resource update was fully disclosed, with JORC Table 1 in a Company news release on 27 October 2015. Mr Sia Khosrowshahi (Golder Associates Pty Ltd) was the Competent Person responsible for the Mineral Resource Estimate for the Régua deposit.
São Martinho Maiden JORC Compliant Mineral Resource Estimate
Category | Tonnes | Au (g/t) | Au Content (Oz) | Cut-off | |
Indicated | 0.48 mt | 1.03 | 17,363 | 0.5 g/t Au | |
Inferred | 2.56 mt | 1.05 | 94,624 | 0.5 g/t Au | |
Total | 3.04 mt | 1.04 | 111,987 | 0.5 g/t Au |
The São Martinho maiden JORC-compliant mineral resource update was fully disclosed, with JORC Table 1 in a W Resources Plc RNS announcement on 8 June 2016. Mr Jorge Peres (Golder Associates Pty Ltd) was the Competent Person responsible for the Mineral Resource Estimate for the São Martinho deposit.
.
W RESOURCES PLC
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2018
2018 was a pivotal year for W Resources, a year in which the Company made great headway towards achieving its mission to build a large-scale Tungsten, Tin and Gold production Company.
W started the year negotiating a US$35 million term loan facility from BlackRock Financial Management Inc. ("BlackRock") and received exceptionally strong local Government support with a €5.3 million grant from the Junta de Extremadura in Spain for W's flagship tungsten project, La Parrilla in South-western Spain.
With the commencement of production at La Parrilla in November and the first sale of tungsten concentrate in December 2018 and significant progress in development work to scale up the project, the Company is well positioned to deliver on its tungsten and tin production growth plans as it builds towards transitioning to a mid-tier mining Company.
Development work at the La Parrilla tungsten and tin mine, is the final phase with construction and commissioning of the mine and processing plant nearing completion.
Development work is also advancing at W's core Régua tungsten mine and São Martinho Gold discovery in Portugal.
TUNGSTEN & TIN
La Parrilla - Spain
La Parrilla is a large-scale, low-cost, long-life tungsten and tin project, located approximately 310km southwest of Madrid. It has Australasian Joint Ore Reserves Committee ("JORC") compliant resources totalling 49 million tonnes ("mt") at a grade of 998 parts per million ("ppm") of tungsten trioxide ("WO3") and JORC compliant reserves of 29.8mt at a diluted grade of 931ppm WO3.
The project is on target to mine 2 million tonnes per annum ("mtpa") of Run of Mine ("ROM") and produce approximately 2,500 tonnes ("t") of tungsten concentrate and 200t of tin ("Sn") concentrate per annum ("T2"). With completion of development work imminent, the timing coincides well with continued strengthening in the European Ammonium paratungstate ("APT") price.
Project Funding
In February, W secured a US$35 million term loan facility from BlackRock to fund the La Parrilla mine development.
The funds were drawn in two tranches, with the second drawdown completing the US$35 million facility in May. As part of the completion of the funding W issued a total of 307,605,430 warrants on a pro-rata basis to the BlackRock funds that participated in the funding, representing 5% of W's fully diluted equity at the time.
In March, the Company was delighted to receive confirmation from the Junta de Extremadura Government in Spain who awarded a grant of €5,322,970 to W's 100% owned subsidiary, Iberian Resources Spain SL. The success of the application is testament to the skills and hard work from the team, who have built great on-the-ground relationships and appreciate the Government support.
Offtake Agreements
Two major long-term offtake agreements were signed in February. The first with Wolfram Bergbau und Hütten AG, ("WBH"), the largest tungsten processing company in Europe and the second is directly with a leading supplier to the USA tungsten markets.
With production commencing in November 2018, ahead of the ramp-up phase, W is pleased to have completed the first shipments of tungsten to date. The process is straightforward in that the offtaker arranges collection and the Company is then paid within three days.
Going forward, W will supply both with approximately 66% tungsten concentrate on competitive pricing terms. The offtake agreements cover the initial T2 development of the La Parrilla Mine and will account for approximately 80% of the planned production tonnage from this phase. There is significant demand for the balance of production which W plans to secure offtake following initial production start-up.
Contracts
In January, the third core design and construction contract for the Concentrator Plant was awarded to allmineral Aufbereitungstechnik GmbH & Co. KG of Germany ("allmineral") at a contract price of c€8 million. allmineral was also awarded the contract for the Jig & Mill Plant which provides important integration benefits for the project delivery and by September all contracts had been placed.
The Crusher Plant, the first of the three key contracts, was awarded in 2017 to Metso Minerals Portugal, Lda ("Metso"), a subsidiary of Metso Corporation for €1.2 million.
Development
With funding completed in May 2018, W Resources moved quickly to commence construction of the mine, Crusher, Jig and Mill, and large-scale Concentrator Plants together with critical water, power and other services.
The Crusher Plant concrete and civil works were completed during the summer and Metso and Ditecsa (steelwork contractor) structural steel delivered at the La Parrilla site. The Metso Crusher Plant equipment was fabricated in their plant in Mâcon, France and was delivered to site as steelwork which was erected on a just in time basis. The fully automated Crusher Plant is complete and fully commissioned to design capacity of 350t/hour.
The earthworks and foundations for the Jig & Mill Plant were completed in Q3 with mechanical completion of the Jig and Mill Plant in April 2019. Commissioning of the Jig & Mill Plant is now underway.
Construction of the large-scale Concentrator Plant is being built under a fixed price schedule contract with allmineral and is scheduled for completion and commencement of commissioning in Q2 2019.
Production and Shipments
Concentrate production commenced in October 2018, with first concentrate shipments in late November 2018. Initial production was from Tailings fed to the existing Concentrator Plant and a series of production runs on mined ore have been successfully completed.
Following the completion and commissioning of the Jig and Mill Plant, W Resources will be able to increase production rates using the new large-scale Crusher Plant, the Jig and Mill Plant and the existing Concentrator Plant. Production will move to a larger-scale of operation with the start-up of the new Concentrator Plant.
PORTUGUESE PROJECTS
Régua Tungsten Project
Progress at Régua continues apace. The high-grade, development-ready tungsten project with low capital cost has a Trial Mine Licence, with a current JORC compliant mineral resource of 5.46mt at a grade of 0.28% WO3, including an indicated resource of 3.76mt at a grade of 0.304% WO3. In July 2018, the Portuguese Secretary of State for Energy under the Ministry for the Economy granted a further one-year extension to the Régua Trial Mine Licence to 19 June 2020.
The Company has now secured all approvals, and in February 2018 W cleared the last hurdle for development when the purchase of 20.3 hectares of land covering the main area of the Régua mine, for a consideration of €300,000, was concluded. This land covers the outcropping resource of the deposit along with the trial mine facilities including the portals and the underground projected stopes.
Régua's high ROM grade (at greater than 0.3% WO3) and proximity to a crushing facility are likely to prove beneficial to the project economics.
The Régua deposit remains open at depth and on all sides, with significant potential to boost the resource growth to the northeast including a 10m thick tungsten intersection.
Preparatory mine grade control drilling commenced in Q2 2018, with nearly 2,000m of RC drilling completed during July. Further evaluation concluded that additional drilling programme would be beneficial in order to complete an updated Resource estimate.
The Company completed a further 2.73 km of drilling which comprised of 916 metres of diamond core drilling plus 1,809 metres of reverse circulation ("RC") drilling in Q1 2019. The results confirmed exceptionally good grades with thick higher-grade zones closer to the planned two mine portals chosen for initial mining indicating the potential for higher ROM feed grades and lower unit costs.
The next phase will be to complete the updated Resource estimates and early indications bode well for increases in mine feed grades and overall resource tonnages. Once the updated Resource estimate has been received, planning for the preparatory mine works will commence.
Development planning for Régua is based on low-cost underground mining using adits (horizontal tunnels), trucking ore to a nearby existing Crusher Plant, and mobilisation of the existing La Parrilla Concentrator Plant to Régua, following new large scale La Parrilla Concentrator Plant start up.
Tarouca Tungsten Project
In 2015, trench sampling at the Tarouca project showed high grade tungsten results with 15 out of the 126 samples exceeding 0.5% WO3, including 0.8m at 11.4% WO3 (TTR063). Together with the 15 holes drilled in 2014, this confirms an outstanding exploration target in the north-eastern area of the licence.
In April 2018, the technical team carried out a month-long RC drilling programme including 29 holes with 1,515 metres of total drilling, completed in depths of 5 to 70 metres. As announced on 7 June 2018, this identified very high tungsten grade intersections, including 1 metre at 2.851% WO3 (TARC011) and 3 metres at 1.165% WO3 (TARCO14). Over 11 assays reported over 1% WO3. The RC holes were drilled at an angle to the primary strike and the drilling programme has enabled the team to model the tungsten resource. The next step will be resource modelling with a view to prepare a trial mine application in 2019.
Initial results have reported some very high-grade tungsten zones have been intersected which provides greater reassurance that this project can provide additional high-grade feed to the Régua mine development, just 20km to the north. The results also provide greater clarity on the geological structure and the potential to follow grade extensions.
CAA Portalegre - Gold
São Martinho currently has a JORC gold resource of over 110,000oz. Results from the drilling campaign in 2017 provided very promising results with a thick intersection of over 55m of gold at 2.34g/t. These results provide a solid base to drive extension drilling with the potential for a materially larger resource.
In May 2018, the Portuguese technical team commenced a 15-hole, 2,000 metre RC drilling programme with a view to materially increase the JORC resource. Initial results were received in July 2018, which highlighted continued strong gold intersections, enabling the team to further delineate the deposit. The evaluation work on this programme remains ongoing.
The overall results of the RC drilling campaign will form part of the update for the upgrade to the JORC compliant mineral resource estimate.
In November, the Company appointed SRK Consulting (UK) Ltd to complete the upgraded São Martinho gold deposit resource estimate which is now scheduled for completion in Q2 2019.
Monforte-Tinoca - Copper
The Monforte-Tinoca Copper exploration licence, which contains the Tinoca and Azeiteiros former copper mines, was granted to W in July 2016. Geophysics surveys were carried out in 2018 using both Induced Polarisation / Electric Resistivity and Transient Electromagnetics methods across the target Copper zones. The RC drilling (1,500m in total) completed mid-year yielded limited results and as a result W has decided to discontinue this exploration licence and focus its resources on the higher value Gold and Tungsten opportunities in Portugal.
Finance
In April 2018, the Company completed a placing to raise £1.5 million through the placement of 300,000,000 ordinary shares of 0.1p per share ("Ordinary Shares") at 0.5p per Ordinary Share.
In November 2018, the Company completed a placing to raise £1.5m through the placement of 306,122,449 ordinary shares of 0.1p per share ("Ordinary Shares") at 0.49p per Ordinary Share. This brought the well-known institutional fund manager Miton Group on to the register and significantly strengthened institutional participation in the register.
Executive Appointments
Mr Pablo Neira and Mr James Argalas were appointed as Non-Executive Directors of the Company in September. As W transitions to a significant tungsten producer, the appointment of Pablo and James to the Board comes at a time when their significant industrial and financial experience is already providing valuable counsel, insight and support. Both are based in Madrid and bring real time Spain based networks and financial and operational capability to the W Resources team.
In the same month, the Company appointed Juan Garcia Valledor as La Parrilla Operations Manager and Tomás Bragado as La Parrilla Plant Manager. Both executives have extensive operational experience in the Spanish mining and metals industry and join W's executive team in the lead up to the start of mining and completion of construction of the Crusher Plant and Jig & Mill Plant prior to the end of the year and the Concentrator Plant in the new year.
Outlook
La Parrilla is fully funded and under full project development. The project is on budget and with all major plant and non-plant infrastructure complete with the exception of the large-scale Concentrator Plant which is on track for construction completion mid-year. Tungsten and tin production and sales have commenced and are set to rise to larger scale production levels at low cost in 2019. Achievement of this objective will transform W Resources.
Régua in Portugal is approved and has advanced and will follow closely behind the development of La Parrilla. Exploration success at Tarouca will feed into and further enhance Régua hub development economics.
Steady advanced exploration and trial mine progress at our São Martinho gold project will further enhance investor returns.
The team with the strong support of the Board is executing development well and this is a credit to the calibre of the management team.
Mr M Masterman, Chairman,
W Resources Plc
30 April 2019
W RESOURCES PLC
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
The Directors present their strategic report of the company and the Group for the year ended 31 December 2018.
REVIEW OF BUSINESS
The results for the year and the financial position of the Group and the Company at the year-end are as shown in the annexed financial statements.
The Group has incurred a loss after tax of £4,051,000 for the year ended 31 December 2018. This is driven by exchange losses of £2,173,000 on translation of the US dollar denominated BlackRock loan into Sterling at 31 December 2018, finance costs associated with the Black Rock loan of £873,000 and an impairment charge of £317,000 on discontinuation of the Portuguese Monforte-Tinoca copper exploration licence. An operating loss of £806,000 was incurred in the year to 31 December 2018, compared to an operating loss of £711,000 for the year to 31 December 2017.
Detailed reviews of activities, business developments and projects are included within the Chairman's Statement.
PRINCIPAL RISKS AND UNCERTAINTIES
The Group uses various financial instruments. These include cash, loans and various other items, such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Company's operations.
The existence of these financial instruments exposes the Company to a number of financial risks, which are described in more detail below. The Directors review and agree policies for managing each of these risks and they are summarised below. These policies have remained unchanged from previous years.
Price Risk
The Directors consider that the price of tungsten is an area of potential risk. This is reviewed on a constant basis by the Board and Senior Management.
Liquidity Risk
The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.
Currency Risk
The Group principally operates in £ and € and has borrowings in US$. It does not currently consider the risk of exposure to be material. As such the Directors do not currently consider it necessary to enter into forward exchange contracts. This situation is monitored on a regular basis.
ON BEHALF OF THE BOARD:
...................................................
Mr Michael Masterman
Chairman
Date: 30 April 2019
W RESOURCES PLC
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2018
2018 | 2017 | |||
CONTINUING OPERATIONS | Notes | £'000 | £'000 | |
Revenue | 2 | 196 | ||
Cost of sales | (196) | - | ||
GROSS PROFIT | - | - | ||
Administrative expenses | (806) | (711) | ||
OPERATING LOSS BEFORE EXCEPTIONAL ITEMS | (806) | (711) | ||
Exceptional items | 148 | - | ||
OPERATING LOSS | (658) | (711) | ||
Finance costs | 4 | (971) | (21) | |
Exchange losses | (2,173) | - | ||
Impairment charge | (317) | - | ||
LOSS BEFORE INCOME TAX | 5 | (4,119) | (732) | |
Income tax | 6 | 68 | (126) | |
LOSS FOR THE YEAR | (4,051) | (858) | ||
| ||||
OTHER COMPREHENSIVE INCOME Items that will not be reclassified to profit or loss: | ||||
Translation reserve | 819 | 433 | ||
Income tax relating to items that will not be reclassified to profit or loss | - | - | ||
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX | 819 | 433 | ||
TOTAL COMPREHENSIVE INCOME FOR THE YEAR | (3,232) | (425) | ||
Loss per share expressed in pence per share: | 8 | |||
Basic | -0.07 | -0.02 | ||
Diluted | -0.07 | -0.02 | ||
W RESOURCES PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 DECEMBER 2018
ASSETS | 2018 | 2017 | ||
NON-CURRENT ASSETS | Notes | £'000 | £'000 | |
Intangible assets | 9 | 23,867 | 13,618 | |
Property, plant and equipment | 10 | 16,640 | 2,204 | |
Investments | 11 | - | - | |
40,507 | 15,822 | |||
CURRENT ASSETS | ||||
Inventories | 12 | 161 | 47 | |
Trade and other receivables | 13 | 5,901 | 1,055 | |
Cash and cash equivalents | 14 | 6,087 | 451 | |
12,149 | 1,553 | |||
TOTAL ASSETS | 52,656 | 17,375 | ||
EQUITY | ||||
SHAREHOLDERS' EQUITY | ||||
Called up share capital | 15 | 5,784 | 5,157 | |
Share premium | 16 | 26,488 | 24,146 | |
Share based payment reserve | 16 | 1,455 | 60 | |
Merger reserve | 16 | 909 | 909 | |
Translation reserve | 16 | 1,599 | 780 | |
Retained earnings | 16 | (19,100) | (15,049) | |
TOTAL EQUITY | 17,135 | 16,003 | ||
LIABILITIES | ||||
NON-CURRENT LIABILITIES | ||||
Financial liabilities - borrowings | ||||
Interest bearing loans and borrowings | 18 | 30,268 | - | |
CURRENT LIABILITIES | ||||
Trade and other payables | 17 | 5,253 | 902 | |
Financial liabilities - borrowings | ||||
Interest bearing loans and borrowings | 18 | - | 344 | |
Tax payable | - | 126 | ||
5,253 | 1,372 | |||
TOTAL LIABILITIES | 35,521 | 1,372 | ||
TOTAL EQUITY AND LIABILITIES | 52,656 | 17,375 |
The financial statements were approved by the Board of Directors on 30 April 2019 and were signed on its behalf by:
...................................................
Mr Michael Masterman
Chairman
W RESOURCES PLC
COMPANY STATEMENT OF FINANCIAL POSITION
31 DECEMBER 2018
ASSETS | 2018 | 2017 | ||
NON-CURRENT ASSETS | Notes | £'000 | £'000 | |
Intangible assets | 9 | - | - | |
Property, plant and equipment | 10 | - | - | |
Investments | 11 | 1,520 | 1,520 | |
1,520 | 1,520 | |||
CURRENT ASSETS | ||||
Trade and other receivables | 13 | 46,386 | 17,665 | |
Cash and cash equivalents | 14 | 4,348 | 191 | |
50,734 | 17,856 | |||
TOTAL ASSETS | 52,254 | 19,376 | ||
EQUITY | ||||
SHAREHOLDERS' EQUITY | ||||
Called up share capital | 15 | 5,784 | 5,157 | |
Share premium | 16 | 26,488 | 24,146 | |
Share based payment reserve | 16 | 1,455 | 60 | |
Merger reserve | 16 | 909 | 909 | |
Translation reserve | 16 | (98) | (98) | |
Retained earnings | 16 | (12,741) | (11,267) | |
TOTAL EQUITY | 21,797 | 18,907 | ||
LIABILITIES | ||||
NON-CURRENT LIABILITIES | ||||
Financial liabilities - borrowings | ||||
Interest bearing loans and borrowings | 18 | 30,268 | - | |
CURRENT LIABILITIES | ||||
Trade and other payables | 17 | 189 | 344 | |
Tax payable | - | 125 | ||
189 | 469 | |||
TOTAL LIABILITIES | 30,457 | 469 | ||
TOTAL EQUITY AND LIABILITIES | 52,254 | 19,376 |
The financial statements were approved by the Board of Directors on 30 April 2019 and were signed on its behalf by:
...................................................
Mr Michael Masterman
Chairman
W RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018
Share | |||||||||||||
Called up | Based | ||||||||||||
Share | Retained | Share | Payment | Merger | Translation | Total | |||||||
Capital | Earnings | Premium | Reserve | Reserve | Reserve | Equity | |||||||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||||||
Balance at 1 January 2017 | 4,360 | (14,191) | 22,381 | 60 | 909 | 347 | 13,866 | ||||||
Changes in equity | |||||||||||||
Issue of share capital | 797 | - | 1,765 | - | - | - | 2,562 | ||||||
Total comprehensive income | - | (858) | - | - | - | 433 | (425) | ||||||
Transactions with owners | - | - | - | - | - | - | - | ||||||
Balance at 31 December 2017 | 5,157 | (15,049) | 24,146 | 60 | 909 | 780 | 16,003 | ||||||
Changes in equity | |||||||||||||
Issue of share capital | 627 | - | 2,342 | - | - | - | 2,969 | ||||||
Total comprehensive income | - | (4,051) | - | - | - | 819 | (3,232) | ||||||
Transactions with owners | - | - | - | 1,395 | - | - | 1,395 | ||||||
Balance at 31 December 2018 | 5,784 | (19,100) | 26,488 | 1,455 | 909 | 1,599 | 17,135 |
W RESOURCES PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018
Share | |||||||||||||
Called up | Based | ||||||||||||
Share | Retained | Share | Payment | Merger | Translation | Total | |||||||
Capital | Earnings | Premium | Reserve | Reserve | Reserve | Equity | |||||||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||||||
Balance at 1 January 2017 | 4,360 | (11,261) | 22,381 | 60 | 909 | (98) | 16,351 | ||||||
Changes in equity | |||||||||||||
Issue of share capital | 797 | - | 1,765 | - | - | - | 2,562 | ||||||
Total comprehensive income | - | (6) | - | - | - | - | (6) | ||||||
Transactions with owners | - | - | - | - | - | - | - | ||||||
Balance at 31 December 2017 | 5,157 | (11,267) | 24,146 | 60 | 909 | (98) | 18,907 | ||||||
Changes in equity | |||||||||||||
Issue of share capital | 627 | - | 2,342 | - | - | - | 2,969 | ||||||
Total comprehensive income | - | (1,475) | - | - | - | - | (1,475) | ||||||
Transactions with owners | - | - | - | 1,395 | - | - | 1,395 | ||||||
Balance at 31 December 2018 | 5,784 | (12,742) | 26,488 | 1,455 | 909 | (98) | 21,796 |
W RESOURCES PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2018
2018 | 2017 | |||
Cash flows from operating activities | Notes | £'000 | £'000 | |
Cash generated from operations | 1 | 5,372 | (709) | |
Interest paid | (98) | (21) | ||
Finance costs paid | (4,764) | - | ||
Tax paid | (58) | - | ||
Net cash from operating activities | 452 | (730) | ||
Cash flows from investing activities | ||||
Purchase of intangible fixed assets | (9,364) | (1,577) | ||
Purchase of tangible fixed assets | (12,839) | (311) | ||
Net cash from investing activities | (22,203) | (1,888) | ||
Cash flows from financing activities | ||||
New loans in year | 24,761 | 168 | ||
Loan repayments in year | (344) | (35) | ||
Amount introduced by directors | - | 16 | ||
Share issue | 627 | 797 | ||
Share issue premium | 2,463 | 1,879 | ||
Share issue costs | (120) | (113) | ||
Net cash from financing activities | 27,387 | 2,712 | ||
Increase in cash and cash equivalents | 5,636 | 94 | ||
Cash and cash equivalents at beginning of year | 2 | 451 | 357 | |
Cash and cash equivalents at end of year | 2 | 6,087 | 451 |
W RESOURCES PLC
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2018
2018 | 2017 | |||
Cash flows from operating activities | Notes | £'000 | £'000 | |
Cash generated from operations | 1 | (20,307) | (2,570) | |
Interest paid | (1) | - | ||
Finance costs paid | (3,910) | - | ||
Tax paid | (56) | - | ||
Net cash from operating activities | (24,274) | (2,570) | ||
Cash flows from investing activities | ||||
Interest received | 700 | 85 | ||
Net cash from investing activities | 700 | 85 | ||
Cash flows from financing activities | ||||
New loans in year | 24,761 | - | ||
Share issue | 627 | 797 | ||
Share issue premium | 2,463 | 1,879 | ||
Share issue costs | (120) | (113) | ||
Net cash from financing activities | 27,731 | 2,563 | ||
Increase in cash and cash equivalents | 4,157 | 78 | ||
Cash and cash equivalents at beginning of year | 2 | 191 | 113 | |
Cash and cash equivalents at end of year | 2 | 4,348 | 191 |
W RESOURCES PLC
NOTES TO THE STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2018
1. RECONCILIATION OF (LOSS) / PROFIT BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS
2018 | 2017 | ||
Group | £'000 | £'000 | |
Loss before income tax | (4,119) | (732) | |
Depreciation charges | 226 | 212 | |
Translation reserve | 652 | (7) | |
Share warrants issued | 237 | - | |
Share options issued | 103 | - | |
Impairment of intangible assets | 317 | - | |
Finance costs | 971 | 21 | |
Exchange losses on new loans | 2,648 | - | |
1,035 | (506) | ||
Increase in inventories | (114) | (47) | |
(Increase) / decrease in trade and other receivables | 100 | (163) | |
Increase in trade and other payables | 4,351 | 7 | |
Cash generated from operations | 5,372 | (709) | |
Company | |||
(Loss) / profit before income tax | (1,544) | 119 | |
Increase in inter-group loans | (22,669) | (2,624) | |
Share warrants issued | 237 | - | |
Share options issued | 103 | - | |
Finance costs | 720 | - | |
Finance income | (700) | (85) | |
Exchange losses on new loans | 2,648 | - | |
(21,205) | (2,590) | ||
(Increase) / decrease in trade and other receivables | 1,011 | (6) | |
(Decrease) / increase in trade and other payables | (113) | 26 | |
Cash generated from operations | (20,307) | (2,570) | |
2. CASH AND CASH EQUIVALENTS
The amounts disclosed on the Statements of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:
Group | Company |
| |||||||
| |||||||||
31.12.18 | 1.1.18 | 31.12.18 | 1.1.18 | ||||||
£'000 | £'000 | £'000 | £'000 | ||||||
Year ended 31 December 2018 | |||||||||
Cash and cash equivalents | 6,087 | 451 | 4,348 | 191 | |||||
31.12.17 | 1.1.17 | 31.12.17 | 1.1.17 | ||||||
£'000 | £'000 | £'000 | £'000 | ||||||
Year ended 31 December 2017 | |||||||||
Cash and cash equivalents | 451 | 357 | 191 | 113 | |||||
W RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
2. REVENUE
Segmental reporting
2017 | |||||||
Mineral | |||||||
By Business Segment: | Corporate | Exploration | Total | ||||
£'000 | £'000 | £'000 | |||||
Revenue | - | - | - | ||||
Gain / (loss) for the year | (26) | (832) | (858) | ||||
Balance Sheet | - Segment Assets | 229 | 17,146 | 17,375 | |||
- Segment Liabilities | (361) | (1,011) | (1,372) | ||||
Net Assets | (132) | 16,135 | 16,003 | ||||
By Geographical Sector | Iberia | UK | Total | ||||
£'000 | £'000 | £'000 | |||||
Revenue | - | - | - | ||||
Gain / (loss) for the year | (832) | (26) | (858) | ||||
Balance Sheet | - Segment Assets | 17,146 | 229 | 17,375 | |||
- Segment Liabilities | (1,011) | (361) | (1,372) | ||||
Net Assets | 16,135 | (132) | 16,003 | ||||
2018 | |||||||
Mineral | |||||||
By Business Segment: | Corporate | Exploration | Total | ||||
£'000 | £'000 | £'000 | |||||
Revenue | - | 196 | 196 | ||||
Gain / (loss) for the year | (3,138) | (913) | (4,051) | ||||
Balance Sheet | - Segment Assets | 7,617 | 45,038 | 52,655 | |||
- Segment Liabilities | (30,385) | (5,135) | (35,520) | ||||
Net Assets | (22,768) | 39,903 | 17,135 | ||||
By Geographical Sector | Iberia | UK | Total | ||||
£'000 | £'000 | £'000 | |||||
Revenue | 196 | - | 196 | ||||
Gain / (loss) for the year | (913) | (3,138) | (4,051) | ||||
Balance Sheet | - Segment Assets | 45,038 | 7,617 | 52,655 | |||
- Segment Liabilities | (5,135) | (30,385) | (35,520) | ||||
Net Assets | 39,903 | (22,768) | 17,135 |
4. NET FINANCE COSTS
2018 | 2017 | ||
Finance costs: | £'000 | £'000 | |
Other finance costs | 98 | 21 | |
Loan costs | 873 | - | |
971 | 21 |
5. LOSS BEFORE INCOME TAX
The loss before income tax is stated after charging / (crediting):
2018 | 2017 | ||
£'000 | £'000 | ||
Depreciation - owned assets | 171 | 157 | |
Intangible assets amortisation | 55 | 54 | |
Auditors' remuneration | 25 | 26 | |
Auditors' remuneration for non-audit work | 3 | 2 | |
Impairment charge | 317 | - | |
Exceptional items | (148) | - |
A total of £272,000 (2017: £120,000) relating to M Masterman's consultancy fees were capitalised in intangible assets in 2018.
An exceptional loss of (£148,0000) in 2016 related to a review by HMRC of the Company's VAT position resulting in the suspension of the Company's VAT registration number and a deemed irrecoverability of VAT, which was provided for in the financial statements. The Company disputed HMRC's decision and the review was concluded during this financial year.
It was concluded at tribunal that the Company's VAT registration be reinstated and that VAT may be claimed from 1 July 2014 onwards. During the current year and in previous years no VAT was reclaimed and expenditure in 2017 and 2018 is shown gross of VAT. In 2018 however, an adjustment has been made to reverse the provision made in 2016 and to adjust the Statement of profit and loss for all unclaimed VAT. The reduction is shown as an exceptional gain in 2018, and totals £148,000.
The impairment charge of £317,000 relates only to the Monforte-Tinoca copper exploration area. The assay results did not demonstrate a regular distribution of significant mineralisation or grade, nor any potential extension of the ore body, to justify a positive future financial return. Given these results, the Company decided not to extend nor renew the exploration licence. The area was discontinued effective from 6 November 2018, resulting in this impairment charge and equal to the capitalised exploration expenditure incurred form the date it was awarded until 31 December 2018.
6. INCOME TAX
Analysis of tax (income) / expense
2018 | 2017 | ||
£'000 | £'000 | ||
Current tax: | |||
Tax | (68) | 126 | |
Total tax (income) / expense in consolidated statement of profit or loss and other comprehensive income | (68) | 126 |
Factors affecting the tax expense
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:
2018 | 2017 | ||
£'000 | £'000 | ||
Loss before income tax | |||
(4,119) | (732) | ||
Loss multiplied by the standard rate of corporation tax in the UK of 19% (2017 - 19%) | (783) | (139) | |
Effects of: | |||
Share options cost disallowed | (20) | - | |
Share warrants cost disallowed | (45) | - | |
Benefit of losses brought forward | (3,684) | (3,544) | |
Benefit of losses carried forward | 4,464 | 3,684 | |
Interest taxed above current year losses | - | 123 | |
Effect of change in rate of tax | - | 2 | |
Tax (income) / expense | (68) | 126 |
8. LOSS PER SHARE
Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
Diluted loss per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares. The share options issued during 2016 and 2018 are considered to be anti-dilutive in accordance with IAS 33 as on conversion they would decrease loss per share from continuing operations.
Reconciliations are set out below | 2018 | ||||
Weighted | |||||
Average | |||||
Number | Per Share | ||||
Loss | of Shares | Amount | |||
£'000 | (millions) | Pence | |||
Basic loss per share | |||||
Loss attributable to ordinary shareholders | (4,051) | 5,423 | -0.07 | ||
Effect of dilutive securities | - | - | - | ||
Diluted loss per share | |||||
Adjusted loss | (4,051) | 5,423 | -0.07 | ||
Reconciliations are set out below | 2017 | |||||
Weighted |
| |||||
Average |
| |||||
Number | Per Share |
| ||||
Loss | of Shares | Amount |
| |||
£'000 | (millions) | Pence |
| |||
Basic loss per share |
| |||||
Loss attributable to ordinary shareholders | (858) | 4,763 | -0.02 |
| ||
Effect of dilutive securities | - | - | - |
| ||
| ||||||
Diluted loss per share |
| |||||
Adjusted loss | (858) | 4,763 | -0.02 |
| ||
9. INTANGIBLE ASSETS
Exploration | |
Group | & Evaluation |
Costs | |
£'000 | |
COST | |
At 1 January 2018 | 13,847 |
Additions | 10,479 |
Exchange differences | 144 |
At 31 December 2018 | 24,470 |
AMORTISATION | |
At 1 January 2018 | 229 |
Amortisation for year | 55 |
Impairments | 317 |
Exchange differences | 2 |
At 31 December 2018 | 603 |
NET BOOK VALUE | |
At 31 December 2018 | 23,867 |
Exploration | |
Group | & Evaluation |
Costs | |
£'000 | |
COST | |
At 1 January 2017 | 11,887 |
Additions | 1,577 |
Exchange differences | 383 |
At 31 December 2017 | 13,847 |
AMORTISATION | |
At 1 January 2017 | 169 |
Amortisation for year | 54 |
Exchange differences | 6 |
At 31 December 2017 | 229 |
NET BOOK VALUE | |
At 31 December 2017 | 13,618 |
The above represents capitalised testing works and concessions costs acquired. |
10. PROPERTY, PLANT AND EQUIPMENT
Group | Plant & |
Machinery | |
£'000 | |
COST | |
At 1 January 2018 | 2,748 |
Additions | 14,583 |
Exchange differences | 30 |
At 31 December 2018 | 17,361 |
DEPRECIATION | |
At 1 January 2018 | 544 |
Charge for year | 171 |
Exchange differences | 6 |
At 31 December 2018 | 721 |
NET BOOK VALUE | |
At 31 December 2018 | 16,640 |
Group | Plant & |
Machinery | |
£'000 | |
COST | |
At 1 January 2017 | 2,357 |
Additions | 311 |
Exchange differences | 80 |
At 31 December 2017 | 2,748 |
DEPRECIATION | |
At 1 January 2017 | 374 |
Charge for year | 157 |
Exchange differences | 13 |
At 31 December 2017 | 544 |
NET BOOK VALUE | |
At 31 December 2017 | 2,204 |
11. INVESTMENTS
Company | Shares in |
Group | |
Undertakings | |
£'000 | |
COST | |
At 1 January 2018 | |
and 31 December 2018 | 1,520 |
NET BOOK VALUE | |
At 31 December 2018 | 1,520 |
At 31 December 2017 | 1,520 |
Company | Shares in |
Group | |
Undertakings | |
£'000 | |
COST | |
At 1 January 2017 | |
and 31 December 2017 | 1,520 |
NET BOOK VALUE | |
At 31 December 2018 | 1,520 |
The Group or the Company's investments at the Statement of Financial Position date in the share capital of companies include the following:
Subsidiaries
Iberian Resources Spain SL
Registered office: Finca La Parrilla, 10132 Almoharin Caceres, Spain
Nature of business: Tungsten mining, production, exploration
% | |||||
Class of shares: | Holding | ||||
Ordinary | 100.00 | ||||
2018 | 2017 | ||||
£'000 | £'000 | ||||
Aggregate capital and reserves | (3,718) | (2,402) |
Copper Gold Resources Plc (Group)
Registered office: 27/28 Eastcastle Street, London W1W 8DH
Nature of business: Tungsten mining exploration, development
% | |||||
Class of shares: | Holding | ||||
Ordinary | 100.00 | ||||
2018 | 2017 | ||||
£'000 | £'000 | ||||
Aggregate capital and reserves | (211) | 233 |
Iberian Resources Portugal LDA
Registered office: Lugar das Mozes, 5110-159 Armamar, Portugal
Nature of business: Mineral Exploration
% | |||||
Class of shares: | Holding | ||||
Copper Gold Resources Plc owns | 100.00 | ||||
2018 | 2017 | ||||
£'000 | £'000 | ||||
Aggregate capital and reserves | (280) | 121 |
12. INVENTORIES
Group | ||||
2018 | 2017 |
| ||
£'000 | £'000 |
| ||
| ||||
Concentrate for re-sale | 161 | 47 |
| |
13. TRADE AND OTHER RECEIVABLES
Group | Company | |||||||
2018 | 2017 | 2018 | 2017 | |||||
£'000 | £'000 | £'000 | £'000 | |||||
Current: | ||||||||
Other debtors | 930 | 410 | 52 | 10 | ||||
Other prepayments | 1,079 | 645 | 28 | 25 | ||||
Finance cost prepayments | 953 | - | 781 | - | ||||
>1 year: | ||||||||
Amounts owed by group undertakings | - | - | 43,116 | 17,630 | ||||
Finance cost prepayments | 2,939 | - | 2,409 | - | ||||
5,901 | 1,055 | 46,386 | 17,665 | |||||
14. CASH AND CASH EQUIVALENTS
Group | Company | |||||||
2018 | 2017 | 2018 | 2017 | |||||
£'000 | £'000 | £'000 | £'000 | |||||
Bank accounts | 6,087 | 451 | 4,348 | 191 | ||||
15. CALLED UP SHARE CAPITAL
Nominal | 2018 | 2017 | |||||
Number | Class | Value | £'000 | £'000 | |||
5,784,197,054 (2017: 5,156,646,034) | Ordinary | 0.1p | 5,784 | 5,157 |
627,551,020 Ordinary Shares of 0.1p were issued during the year for cash as follows:
- On 21 February 2018, 21,428,571 Ordinary Shares of 0.1p each were issued at a premium of 0.32p raising £90,000. This was the exercise of 21,428,571 share warrants issued last year.
- On 05 April 2018, 300,000,000 Ordinary Shares of 0.1p each were issued at a premium of 0.40p raising £1,500,000.
- On 27 November 2018, 306,122,449 Ordinary Shares of 0.1p each were issued at a premium of 0.39p raising £1,500,000.
At the year-end there were 554,034,000 Share Warrants in issue that were yet to be exercised. (2017: 267,857,141). An early exercise option has been offered to warrant holders since the balance sheet date, per note 20.
16. RESERVES
Share | |||||
Group | Based | ||||
Retained | Share | Payment | |||
Earnings | Premium | Reserve | |||
£'000 | £'000 | £'000 | |||
At 1 January 2018 | (15,049) | 24,146 | 60 | ||
Deficit for the year | (4,051) | - | - | ||
Cash share issue | - | 2,462 | - | ||
Cost of share issue | - | (120) | - | ||
Share warrants issued | - | - | 1,292 | ||
Share options issued | - | - | 103 | ||
At 31 December 2018 | (19,100) | 26,488 | 1,455 |
Group | Merger | Translation | |||
Reserve | Reserve | Totals | |||
£'000 | £'000 | £'000 | |||
At 1 January 2018 | 909 | 780 | 10,846 | ||
Deficit for the year | - | - | (4,051) | ||
Cash share issue | - | - | 2,462 | ||
Cost of share issue | - | - | (120) | ||
Trans to translation reserve | - | 819 | 819 | ||
Share warrants issued | - | - | 1,292 | ||
Share options issued | - | - | 103 | ||
At 31 December 2018 | 909 | 1,599 | 11,351 |
Share | |||||
Company | Based | ||||
Retained | Share | Payment | |||
Earnings | Premium | Reserve | |||
£'000 | £'000 | £'000 | |||
At 1 January 2018 | (11,267) | 24,146 | 60 | ||
Deficit for the year | (1,475) | - | - | ||
Cash share issue | - | 2,463 | - | ||
Cost of share issue | - | (120) | - | ||
Share warrants issued | - | - | 1,292 | ||
Share options issued | - | - | 103 | ||
At 31 December 2018 | (12,742) | 26,489 | 1,455 |
Company | Merger | Translation | |||
Reserve | Reserve | Totals | |||
£'000 | £'000 | £'000 | |||
At 1 January 2018 | 909 | (98) | 13,750 | ||
Deficit for the year | - | - | (1,475) | ||
Cash share issue | - | - | 2,462 | ||
Cost of share issue | - | - | (120) | ||
Share warrants issued | - | - | 1,292 | ||
Share options issued | - | - | 103 | ||
At 31 December 2018 | 909 | (98) | 16,013 |
17. TRADE AND OTHER PAYABLES
Group | Company | |||||||
2018 | 2017 | 2018 | 2017 | |||||
£'000 | £'000 | £'000 | £'000 | |||||
Current: | ||||||||
Trade creditors | 5,188 | 740 | 54 | 70 | ||||
Amounts owed to group undertakings | - | - | 73 | 115 | ||||
Other creditors | 1 | 136 | 1 | 136 | ||||
Accrued expenses | 64 | 26 | 61 | 23 | ||||
5,253 | 902 | 189 | 344 | |||||
18. FINANCIAL LIABILITIES - BORROWINGS
In November 2017, a loan of £133,097 was granted by the Banco Bilbao Vizcaya to Iberian Resources Spain SL. Repayment. This loan was repaid in its entirety in February 2018.
On 20 October 2014, Beronia Investments Pty granted Iberian Resources Spain SL a short-term loan of €200,000 to cover VAT receivables. This remained outstanding at 31 December 2017, and it was repaid in its entirety on 21 February 2018. This loan had an interest rate of 5% per annum. Interest in the year was recognised in the profit and loss account of £Nil (2017 £16,000). The converted balance included in financial liabilities - borrowings at the year-end was £Nil (2017; £211,000).
On 14 February 2018, W Resources signed a Credit and Guaranty Agreement with BlackRock Financial Management Inc. to provide a US$35 million secured term loan facility to the Company to fund the La Parrilla mine development. The first US$13.125 million was drawn in February 2018 and the balance of US$21.875 million was funded in May 2018.
The key terms of the Credit and Guaranty Agreement with BlackRock Financial Management Inc. are as follows:
- The Loan is for a scheduled term of five years, with a two year non-call period. The Company has the right to repay the Loan after two years for a premium of 5%, after three years for a premium of 3%, and after four years for no premium; the Loan is secured over the value of the Group's intangible and tangible assets in Spain and in Portugal as well as the stream of future revenues expected from off take agreements.
- Subject to any early repayment permitted or required under the Agreement, repayment will be made by way of a cash flow sweep, utilising free cash to repay the loan; it is not expected that cash will be available within the initial two-year period and therefore the full amount of the loan has been recognised as payable between 2-5 years.
- The Loan is subject to an average 5-year interest rate of 12.6%, being 14% in the first year, 13% in the second year and 12% thereafter;
- First year interest is added to the value of the principal, while 50% of the second-year interest is added to the value of the principal and 50% is payable in cash; from the third year onwards interest will be fully payable in cash on quarterly anniversaries of the loan agreement.
- Lenders received a non-refundable upfront fee of 3% of the face value of each of the respective Loan disbursements;
- Lenders received warrants totalling 5% of W Resources Plc fully diluted equity. These have been valued at 5% of the total loan value £1,292,000 (note 21)
- The value of the loan included in the statement of financial position at the balance sheet date is £30,268,000 (2017: Nil)
- During the year interest of £2,801,000 was incurred on the Loan. This was added to the loan capital during the year and recharged by W Resources PLC to its subsidiary Iberian Resources Spain SL where it was capitalised in Intangible and in Tangible assets in proportion to the expenditure on each of these categories during the year, and in accordance with the Groups accounting policy for loan interest.