30 Aug 2013 08:37
30 August 2013
W Resources Plc
("W" or "the Company")
La Parrilla Mine Acquisition
W Resources Plc (AIM:WRES), the tungsten and gold exploration and development company with assets in Spain and Portugal announces that the Company has taken ownership of the La Parrilla Mine in southwest Spain.
Following agreement with the mine owners, full title to the La Parrilla mine has been transferred to the Company for a consideration of €900,000 (plus VAT) in accordance with the existing option agreement. The Company will pay the initial consideration out of existing cash resources.
The decision to move to full title ownership was taken by W following the extension drilling and initial evaluation of the mine and its development potential.
Based on the preliminary work to date at the La Parrilla mine, in June 2013 Golder Associates Pty Ltd increased the JORC Inferred Resource by 30% to 46.92Mt at 0.09% Tungsten Trioxide (WO3) for contained metal of 39,882 tonnes WO3. In addition, the resource includes 0.009% Tin (Sn) for contained metal of 4,270 tonnes Sn. Furthermore, there is scope to increase returns by improved mine scheduling to target high grade zones adjacent to and on the top of the current mine pit. The Company has further identified an Exploration Target adjacent to the existing pit in the order of 13-18Mt at 0.06%-0.08% WO3, where targeted drilling is planned to considerably increase the JORC Resource at La Parrilla. The Board accordingly believes there is scope for substantial improvement to the NPV and IRR calculations associated with the historic SRK resource estimate.
Commenting on the transaction, Chairman Mr Masterman said: "La Parrilla will be a major tungsten mine and this decisive step will allow us to proceed with clear confidence and secure title towards development. With the tailings project on track to start first production later this year, we look forward to the next development phase of the mine."
Following the initial payment of €900,000, the Company will make a further phased payments of €1.3 million in Q3 2014 and of €500,000 in Q3 2015. It is intended that these payments will be funded from the cashflows from La Parrilla tailings production.
Construction of the La Parrilla tailings facility is progressing on schedule with the pre concentration plant expected to be complete in October and the full facility in December.
Enquiries:
W Resources Plc | Grant Thornton UK LLP - Nomad |
Michael Masterman | Colin Aaronson / Melanie Frean / Jen Clarke |
T: +44 (0) 20 7193 7463 | T: +44 (0) 20 7383 5100 |
www.wresources.co.uk | |
SI Capital - Broker | Gable Communications |
Andy Thacker / Nick Emerson | Justine James |
T: +44 (0) 1483 413500 | T: +44 (0) 20 7193 7463 |
www.sicapital.co.uk | M: +44 (0) 7525 324431 |
About La Parrilla
The La Parrilla project site is situated in the Extremadura region of southwest Spain, in the Provinces of Caceres-Badajoz, approximately 310 km southwest of Madrid. The site is accessed directly from the highway along a 3 km asphalt road and is serviced by electricity and water. The project comprises a tungsten mine and a tungsten tailings project. The historic mine resource estimated by SRK in 2008 is 36.0 million tonnes at 0.09% WO3, making it one of the largest tungsten deposits in the western world.
With the final approvals granted at the La Parrilla tailings project in January 2013, by the Mining Department of the regional authority of the Junta de Extremadura, the Company is targeting first production in H2 2013. Annual plant feed will be 330,000 tonnes and annual production is anticipated to be 28,000 MTU Tungsten (W) and 26 tonnes Tin (Sn), which will deliver over €7million per annum in revenue at current tungsten and tin prices.
The price of tungsten has increased rapidly over the last 3 years by more than double. The La Parrilla tailings deposit and tungsten mine development offer a low cost, high margin resource development opportunity for W Resources