10 Sep 2018 07:00
10 September 2018
W Resources Plc
("W" or the "Company")
Half Year Results for the Six Months Ended 30 June 2018
W Resources Plc (AIM: WRES), the tungsten, copper and gold exploration and development company with assets in Spain and Portugal, announces its half year results for the six months to 30 June 2018.
HIGHLIGHTS
La Parrilla, 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.
· Commenced earthworks and construction at the La Parrilla mine with completion on track for Q1 2019.
· Secured offtake agreements with Wolfram Bergbau und Hütten and directly with a leading supplier to the USA tungsten markets for approximately 80% of planned production tonnage from the T2 phase.
· Awarded the Concentrator contract to allmineral Aufbereitungstechnik GmbH & Co. KG of Germany.
· 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.
Portuguese Projects
· Purchased 20.3 hectares of land covering the main area of the Régua mine, for a total of €300,000.
· 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.
· Completed a 2,000m RC drilling campaign at the São Martinho gold project during July which delivered very encouraging grades.
Chairman of W, Michael Masterman commented: "La Parrilla is funded and under full project development. The project is on schedule and on budget and tungsten and tin production and sales are set to commence at large scale production levels and at low cost in 2019. Achievement of this objective will transform W Resources.
"Régua in Portugal is approved and 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 progress at our São Martinho gold and Monforte-Tinoca copper projects 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."
A full copy of the W Resources Interim Results for the six months ended 30 June 2018 is available on the Company's website at www.wresources.co.uk and an extract of the Interim Results for the six months ended 30 June 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 / Jen Clarke / 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 |
About W
In 2012, W Resources Plc (AIM:WRES) made the successful transition into a tungsten production exploration and development company with projects in Spain and Portugal, following two acquisitions. Projects now include La Parrilla, a tungsten project in Spain and Régua and Tarouca Tungsten projects and the Portalegre copper-gold project in Portugal.
The Company's deposits and tungsten mine developments offer a low cost, high margin resource development opportunity. Tungsten and Tin prices have increased significantly over the last 12 months and Tungsten is in the EUs top 5 critical metals list.
The Board is focused to explore further opportunities in the region with a view to building a mid-tier minor metal producer.
The Company was incorporated in England and Wales in 2004.
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 following table 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 Adén Muñoz 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).
La Parrilla JORC Compliant Mineral Resource Estimate
Category | Tonnes | WO3 % | Sn (ppm) | Cut-off |
Indicated | 36 mt | 0.096 | 115 | 0.04% WO3 |
Inferred | 15 mt | 0.095 | 92 | 0.04% WO3 |
Total | 51 mt | 0.096 | 108 | 0.04% WO3 |
The La Parrilla JORC-compliant mineral resource update was fully disclosed, with JORC Table 1 in a Company news release on 5 February 2016. 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 | 3.76 mt | 0.304 | 0.1% WO3 |
Inferred | 1.70 mt | 0.227 | 0.1% WO3 |
Total | 5.46 mt | 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 Company news release 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.
CHAIRMANS STATEMENT
Dear Shareholders,
2018 has proven to be a transformational year for W Resources, with the receipt of a US$35m term loan facility from BlackRock Financial Management Inc. ("BlackRock") and exceptionally strong local Government support from the Junta de Extremadura in Spain, the Company is well positioned to deliver on its growth plans as it builds towards transitioning to a mid-tier mining Company.
In the first half of 2018, W Resources delivered on its objective to fund its flagship La Parrilla tungsten and tin mine in South-western Spain and is rapidly moving to complete construction and commissioning of the mine and processing plant. La Parrilla was fully funded in February 2018 through a US$35 million term loan facility from BlackRock, and development of the La Parrilla tungsten and tin mine is on schedule for completion in the first quarter of 2019.
In parallel, the team is continuing to advance W's core Portuguese tungsten, copper and gold assets.
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.
Development work is underway with construction progressing well during H1 2018 towards project completion in Q1 2019. The timing coincides well with the sharp rise in the European Tungsten ammonium paratungstate ("APT") price over the past year and the project is on target to mine 2 million tonnes per annum ("mtpa") of Run of Mine ("ROM") and produce approximately 2,700 tonnes ("t") of tungsten concentrate and 500t of tin ("Sn") concentrate per annum ("T2").
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.
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.
W Resources 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 in early 2019.
Contracts
In January, the third core design and construction contract for the Concentrator was awarded to allmineral Aufbereitungstechnik GmbH & Co. KG of Germany ("allmineral") at a contract price of c€8 million. allmineral also have the contract for the Jig & Mill which provides important integration benefits for the project delivery.
Development
With funding in place, the earthworks commenced in April with plant civil works nearing completion.
Concrete and civil works are also now complete for the crusher and Metso Minerals Portugal, Lda ("Metso") and Disteca (steelwork contractor) have commenced structural steel delivery at the La Parrilla site. Metso crusher equipment was fabricated in their plant in Mâcon, France and will be progressively delivered to site as steelwork is erected on a just in time basis.
The earthworks and foundations for the Jig & Mill have now been completed with construction of the Jig & Mill on schedule for Q4 2018.
We expect to complete construction of the crusher and the jig in the December quarter and the concentrator in the first quarter of 2019.
PORTUGUESE PROJECTS
Régua Tungsten Project
Significant progress continues at Régua, a high grade, development-ready tungsten project with low capital cost. The project, which has a Trial Mine Licence to 19 June 2020, has a current JORC compliant mineral resource of 5.46mt at a grade of 0.28% WO3, with an indicated resource of 3.76mt at a grade of 0.304% WO3. In July, 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.
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.
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.
Preparatory mine grade control drilling commenced in Q2 2018 with nearly 2,000m of RC drilling completed during July. Diamond core drilling is underway and preparatory mine works will commence following analysis of results.
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.
The Company is working towards consolidating the prior exploration programmes completed to date by carrying out a reverse circulation ("RC") drilling campaign. In April 2018, the 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.
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 provide greater clarity on the geological structure and the potential to follow grade extensions. The full assay results are expected to be received in Q3 2018, following which the development team will model the mineralised lenses in order to advance a geological resource at Tarouca.
The outcome of the drilling campaign at Tarouca will assist to further delineate the resource with a view to increasing our overall tungsten resource and production base and apply for a trial mine licence later in 2018.
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, 2,000m RC drilling programme with a view to materially increase the JORC resource. Initial results were received in July 2018 which highlight 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 which is expected to be completed in H2 2018.
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 and this project will be advanced during 2018. Geophysics surveys are currently underway using both Induced Polarisation / Electric Resistivity and Transient Electromagnetics methods across the target Copper zones.
The geophysics surveys are expected to pin point the copper anomaly and extensions of the former high-grade copper mines. RC drilling (1,500m in total) was completed mid-year.
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.
Executive Appointments
In September, the Company announced the executive appointments of 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 and jig & mill prior to the end of the year and the concentrator plant in the new year.
Outlook
La Parrilla is funded and under full project development. The project is on schedule and on budget and tungsten and tin production and sales are set to commence at large scale production levels and at low cost in 2019. Achievement of this objective will transform W Resources.
Régua in Portugal is approved and 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 progress at our São Martinho gold and Tinoca copper projects 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
10 September 2018
W RESOURCES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2018
| Unaudited Six Months to 30 June 2018 £(000's) |
| Unaudited Six Months to 30 June 2017 £(000's) |
| Year to 31 December 2017 £(000's) |
|
|
|
|
|
|
Continuing Operations |
|
|
|
|
|
Revenue | - |
| - |
| - |
Cost of Sales | - |
| - |
| - |
Gross Loss | - |
|
- |
| - |
Administrative Expenses | (639) |
| (371) |
| (711) |
Exceptional Items | - |
| - |
| - |
|
|
|
|
|
|
Operating Loss | (639) |
| (371) |
| (711) |
Finance Costs | (279) |
| (10) |
| (21) |
Exchange Gain/(Loss) | (1,084) |
| - |
| - |
Finance Income | - |
| - |
| - |
|
|
|
|
|
|
Loss before Income Tax | (2,002) |
| (381) |
| (732) |
|
|
|
|
|
|
Income Tax | 68 |
| - |
| (126) |
Loss for the Period | (1,934) |
| (381) |
| (858) |
|
|
|
|
|
|
Other Comprehensive Income |
|
|
|
|
|
Share Based Payment | - |
| - |
| - |
Translation Reserve Movement | 105 |
| 333 |
| 433 |
Share Options issued/related | - |
| - |
| - |
|
|
|
|
|
|
Total Comprehensive (Loss)/Profit for the period | (1,829) |
| (48) |
| (425) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Loss per Share |
(0.03p) |
| (0.008p) |
| (0.02p) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
W RESOURCES PLC
GROUP FINANCIAL POSITION
30 JUNE 2018
| Unaudited 30 June 2018 |
| Unaudited 30 June 2017 |
| 31 December 2017 |
| £(000's) |
| £(000's) |
| £(000's) |
ASSETS |
|
|
|
|
|
NON-CURRENT ASSETS |
|
|
|
|
|
Intangible Fixed Assets | 17,761 |
| 12,810 |
| 13,618 |
Tangible Fixed Assets | 7,345 |
| 2,171 |
| 2,204 |
| 25,106 |
| 14,981 |
| 15,822 |
CURRENT ASSETS |
|
|
|
|
|
Inventories | 47 |
| - |
| 47 |
Trade and Other Receivables | 4,037 |
| 851 |
| 1,055 |
Cash and Cash Equivalents | 15,058 |
| 813 |
| 451 |
| 19,142 |
| 1,664 |
| 1,553 |
TOTAL ASSETS | 44,248 |
| 16,645 |
| 17,375 |
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
SHAREHOLDERS EQUITY |
|
|
|
|
|
Called up share capital | 5,478 |
| 4,843 |
| 5,157 |
Share premium account | 25,340 |
| 23,336 |
| 24,146 |
Retained earnings | (16,983) |
| (14,572) |
| (15,049) |
Merger Reserve | 909 |
|
909 |
| 909 |
Translation Reserve | 885 |
| 680 |
| 780 |
Share based Payment Reserve | 60 |
| 60 |
| 60 |
TOTAL SHAREHOLDERS EQUITY | 15,689 |
|
15,256 |
| 16,003 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
Trade and other payables | 1,218 |
| 1,191 |
| 902 |
Financial Liabilities - borrowing interest bearing loans | - |
| 198 |
| 344 |
Tax Payable | 57 |
| - |
| 126 |
| __________ 1,275 |
| __________ 1,389 |
| __________1,372 |
| __________ |
| __________ |
| __________ |
|
|
|
|
|
|
NON-CURRENT LIABILITIES |
|
|
|
|
|
Loan Capital | 27,284 |
| - |
| - |
| ___________ |
| __________ |
| __________ |
TOTAL LIABILITIES | 28,559 |
| 1,389 |
| 1,372 |
| ___________ |
| __________ |
| __________ |
TOTAL EQUITY AND LIABILITIES | 44,248 |
| 16,645 |
| 17,375 |
| ___________ |
| __________ |
| __________ |
W RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2018
|
Called Up Share Capital £(000's) |
Profit and Loss Account £(000's) |
Share Premium £(000's) |
Merger Reserve £(000's) |
Translation Reserves £(000's) | Share Based Payment Reserve £(000's) |
Total Equity £(000's) |
|
|
|
|
|
|
|
|
Balance at 1 January 2018 | 5,157 | (15,049) | 24,146 | 909 | 780 | 60 | 16,003 |
Issue of Share Capital | 321 |
| 1,194 |
|
|
| 1,515 |
Total Loss for the Period |
| (1,934) |
|
|
|
| (1,934) |
Unrealised Foreign Exchange Gain | _______ | _______ | _______ | _______ | 105 | _______ | 105 |
Total Comprehensive Income
|
______ | (1,934) |
_______ |
_______ |
105 |
_______ |
(1,829) |
Balance at 30 June 2018 (unaudited) | 5,478 | (16,983) | 25,340 | 909 | 885 | 60 | 15,689 |
|
|
|
|
|
|
|
|
Year to 31 December 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2017 | 4,360 | (14,191) | 22,381 | 909 | 347 | 60 | 13,866 |
Issue of Share Capital | 797 |
| 1,765 |
|
|
| 2,562 |
Total Comprehensive Income |
| (858) |
|
|
|
| (858) |
Unrealised Foreign Exchange Loss | _______ | _______ | _______ | ______ | 433 | _______ | 433 |
|
|
|
|
|
|
|
|
Balance at 31 December 2017 | 5,157 | (15,049) | 24,146 | 909 | 780 | 60 | 16,003 |
|
|
|
|
|
|
|
|
6 Months to 30 June 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2017 | 4,360 | (14,191) | 22,381 | 909 | 347 | 60 | 13,866 |
Issue of Share Capital | 483 |
| 955 |
|
|
| 1,438 |
Total Loss for the Period |
| (381) |
|
|
|
| (381) |
Share Based Payment |
|
|
|
|
|
| - |
Unrealised Foreign Exchange Gain | _______ | _______ | _______ | _______ | 333 | _______ | 333 |
Total Comprehensive Income |
_______ |
(381) |
_______ |
_______
|
333 |
_______ |
(48) |
|
|
|
|
|
|
|
|
Balance at 30 June 2017 (unaudited) | 4,843 | (14,572) | 23,336 | 909 | 680 | 60 | 15,256 |
W RESOURCES PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2018
| Unaudited Six Months to 30 June 2018 |
| Unaudited Six Months to 30 June 2017 |
| Year to 31 December 2017 |
| £(000's) |
| £(000's) |
| £(000's) |
|
|
|
|
|
|
Cash Flows from Operating Activities |
|
|
|
|
|
Cash Absorbed by Operations | (4,551) |
| 77 |
| (709) |
Interest Paid | - |
| - |
| - |
Finance Costs paid | (279) |
| (10) |
| (21) |
| (4,830) |
| 67 |
| (730) |
|
|
|
|
|
|
Cash Flows from Investing Activities |
|
|
|
|
|
Purchase of intangible fixed assets | (3,790) |
| (864) |
| (1,577) |
Purchase of tangible fixed assets | (5,228) |
| (220) |
| (311) |
|
|
|
|
|
|
| (9,018) |
| (1,084) |
| (1,888) |
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
New Loans in period | 27,284 |
| - |
| 168 |
Loan Repayments in period | (344) |
| 35 |
| (35) |
Share Issue | 321 |
| 483 |
| 797 |
Share Premium | 1,269 |
| 1,018 |
| 1,895 |
Share Issue costs | (75) |
| (63) |
| (113) |
|
|
|
|
|
|
Net Cash for Financing Activities | 28,455 |
| 1,473 |
| 2,712 |
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) in Cash and Cash Equivalents | 14,607 |
| 456 |
| 94 |
Cash and Cash Equivalent at Beginning of Period | 451 |
| 357 |
| 357 |
|
|
|
|
|
|
Cash and Cash Equivalent at end of Period | 15,058 |
| 813 |
| 451 |
|
|
|
|
|
|
Reconciliation of Cash Flows from Operations |
|
|
|
|
|
Loss before Tax | (2,002) |
| (381) |
| (732) |
Depreciation | 106 |
| 105 |
| 212 |
Exchange Difference on Translation | (268) |
| (3) |
| (7) |
Finance Costs | 279 |
| 10 |
| 21 |
|
|
|
|
|
|
| (1,885) |
| (269) |
| (506) |
(Increase) / Decrease in Trade and Other Receivables | (2,982) |
| 41 |
| (163) |
Increase/(Decrease) in Trade and Other Payables | 316 |
| 305 |
| 7 |
(Increase)/Decrease in Inventories | - |
| - |
| (47) |
|
|
|
|
|
|
Cash Absorbed by Operations | (4,551) |
| 77 |
| (709) |
|
|
|
|
|
|