21 Oct 2021 07:00
21 October 2021
W Resources Plc
("W" or the "Company")
Q3 2021 Production Report
W Resources Plc (AIM:WRES), the tungsten, tin and gold mining company with assets in Spain and Portugal, announces its Q3 2021 quarterly production report for the La Parrilla mine in Spain, a period in which the Company achieved record tungsten recovery rates, grades and production.
Q3 Highlights
· Tungsten recovery rate of 58% up from 47% in Q2 2021 and tungsten concentrate recovery grades of 66.7% up 3% on Q2 2021
· Tungsten production of 168.3 tonnes ("t") up 58% on Q2 2021
· 11 shipments made - nine tungsten concentrate shipments (180t) and two tin concentrate shipments (40.8t)
· Construction of the second water dam underway with target completion in November 2021
· Robust commodity pricing with tungsten and tin increasing in the period
· Plant utilisation remains high at 87.1% compared to 88.2% in Q2 2021
· Moved to a 24 / 7 operation on 7 September 2021
Key Metrics
· A total of 279,196t of Run of Mine ("ROM") ore fed to the La Parrilla plant in Q3 2021
· Total tungsten and tin concentrate production of 192.4t
· Tungsten ("WO3") concentrate production of 168.3t
· Tin ("Sn") concentrate production of 24.1 dry metric tonnes ("dmt")
La Parrilla Production Summary
Whilst Q3 2021 recorded a number of record performance milestones, production was impacted by a number of challenges which resulted in an estimated production loss of circa 40t of tungsten concentrate, including:
· A number of power outages were caused by technical problems with the LNG generators. This has been resolved by the supplier after isolating the cause of the stoppages. To mitigate against future power outages the Company is installing an additional connection to the grid power supply. This is expected to be finalised in 2022 and will supply sufficient electricity to power the entire plant.
The pro-rata below adjusts for the variance in production days.
| Q3 2021 | Q2 2021 | Variance | Variance |
La Parrilla Production Summary | Actual | Actual | Comparison | Pro rata |
WO3 contained metal (mtu) | 11,229 | 6,919 | 62.3% | 18.4% |
Sn contained metal (dmt) | 12.5 | 12.4 | 0.8% | -26.4% |
Total contained metal (dmt) | 124.8 | 81.6 | 53.0% | 11.6% |
('dmt' - dry metric tonnes, 'mtu' - metric tonne unit (1 mtu = 10kg of contained metal)) | ||||
Michael Masterman, Chairman of W Resources, commented: "Q3 2021 was our best performing quarter to date and we expect to see this growth continue as we head towards the end of the year. Notwithstanding a number of challenges towards the end of the quarter, the result is testament to the management team at the La Parrilla mine which reacted quickly to minimise any disruption.
"In September, the Extremadura region of Spain, where the La Parrilla mine is located, experienced torrential rain fall for a period of time. Although the mine continued to work, production did slow due to the wet feed being fed into the plant. The team at La Parrilla is looking to introduce a silo to hold a minimum of one weeks' supply of dry stock which should negate the problems caused by similar flash flooding.
"Work at the mine has continued with new staff recruited and the introduction of a 24 / 7 operation seeing activities increase throughout the mine. In Q3 2021, work commenced on the second water dam which we expect will be completed in November 2021 and will serve to protect the mine from further water issues.
"Work continues apace and the La Parrilla team has a clear focus on increasing production and efficiencies as the reality of continuous production becomes the norm."
Q3 2021 Overview
The final phase of the project to provide a permanent solution to the water issues at La Parrilla, comprising of a second dam, is currently underway and is expected to be completed in November.
The recovery rate for tungsten during Q3 2021 was 58%, the highest to date for any quarter notwithstanding further work is needed to improve tin recoveries.
ROM feed increased to 279,196t for the quarter, another record and up 21% on Q2 2021.
11 shipments of concentrate were made during Q3 2021, almost doubling the number of shipments made in Q2 2021.
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| Q3 2021 | Q2 2021 | Variance | Variance |
La Parrilla Production Summary |
| Actual | Actual | Comparison | Pro rata |
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ROM feed: tonnes mined (wmt) |
| 279,196 | 231,613 | 21% | -12% |
Strip ratio |
| 3.53 | 2.89 | 22% |
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Jig plant: tonnes processed (dmt) |
| 207,327 | 173,901 | 19% | -13% |
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WO3 feed grade (ppm) |
| 934 | 855 | 9% |
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WO3 recovery (%) |
| 58% | 47% | 23% |
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WO3 concentrate (dmt) |
| 168.3 | 106.4 | 58% | 15% |
WO3 concentrate grade (%) |
| 66.7 | 65.0 | 3% |
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WO3 contained metal (mtu) |
| 11,229 | 6,919 | 62% | 18% |
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Sn feed grade (ppm) |
| 263 | 259 | 2% |
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Sn recovery (%) |
| 23% | 27% | -15% |
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Sn concentrate (dmt) |
| 24.1 | 23.8 | 1% | -26% |
Sn concentrate grade (%) |
| 51.9 | 51.9 | 0% | -27% |
Sn contained metal (dmt) |
| 12.5 | 12.4 | 1% | -26% |
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Total concentrate (dmt) |
| 192.4 | 130.2 | 48% | 8% |
Total contained metal (dmt) |
| 124.8 | 81.6 | 53% | 12% |
Recovery
Tungsten recovery increased by 23% during Q3 2021, rising from 47% to 58%, although tin recovery fell by 15% from 27% to 23%.
Health and Safety
During the period there were three serious and one minor accident and three reported Covid-19 incidences. The Company believes its robust measures for controlling entry to and from the mine help in reducing Covid-19 events. Additional training is always provided to employees following serious accidents at the mine.
Plant Utilisation
Plant utilisation decreased to 87% slightly down from 88% in Q2 2021 - adversely impacted by the number of power outages experienced during the quarter.
Shipments
Nine shipments of tungsten concentrate totalling 180t and two shipments of tin concentrate totalling 40.8t were completed in Q3 2021.
| Q3 2021 | Q2 2021 | Variance | Variance |
La Parrilla Shipment Summary | Actual | Actual | Comparison | Pro rata |
Tungsten concentrate (t) | 180.0 | 100.0 | 80% | 31% |
Tin concentrate (t) | 40.8 | 19.3 | 111% | 54% |
Commodity Pricing
European ammonium paratungstate ("APT") pricing remains strong and has further increased to US$315-320 as at 15 October 2021 - Fastmarkets MB.
The LME Tin price continues to strengthen reaching a three-month forward price of US$37,875 per tonne as per Fastmarkets MB, 14 October 2021.
Production Guidance
The Company is leasing a water treatment plant to improve water quality in the feed to the process plant and expects this measure to reduce maintenance issues and improve productivity.
Associated maintenance issues and supply chain bottlenecks for replacement parts have led to lower plant availability and as a result W Resources has adjusted its full year production guidance to between 650t and 750t of concentrate.
The Company expects Q4 2021 production to be greater than Q3 2021 production. However, production volumes will not reach the T2 run rate until Q1 2022.
The months of August and September were both EBITDA positive for W's operating subsidiary Iberian Resources Spain ("IRS") and the Company firmly expects Q4 2021 to be EBITDA positive as well for IRS with the mine at La Parrilla increasing production as the quarter progresses.
Employees
The number of staff employed at La Parrilla mine as at 30 September 2021 was 124 compared to 90 as at 30 June.
The historic La Parrilla mine production summary is as follows:
La Parrilla Historic Production | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 |
Summary | Actual | Actual | Actual | Actual | Actual | Actual | Actual |
No. of working days |
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| 39 | 52 | 45 | 54 | 74 |
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ROM feed: tonnes mined (wmt) | 273,656 | 253,256 | 171,454 | 261,841 | 196,094 | 231,613 | 279,196 |
Strip ratio | 1.07 | 0.58 | 1.38 | 1.19 | 5.13 | 2.89 | 3.53 |
Jig plant: tonnes processed (dmt) | 240,926 | 228,060 | 148,417 | 236,677 | 163,866 | 173,901 | 207,327 |
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WO3 feed grade (ppm) | 800 | 845 | 857 | 943 | 744 | 855 | 934 |
WO3 recovery (%) | 17% | 16% | 30% | 31% | 32% | 47% | 58% |
WO3 concentrate (dmt) | 58.9 | 47.6 | 54.7 | 100 | 63.5 | 106.4 | 168.3 |
WO3 concentrate grade (%) | 56.1 | 57.4 | 69.8 | 67.0 | 61.6 | 65.0 | 66.7 |
WO3 contained metal (mtu) | 3,306 | 2,756 | 3,820 | 6,698 | 3,916 | 6,919 | 11,229 |
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Sn feed grade (ppm) | 282 | 307 | 181 | 321 | 228 | 259 | 263 |
Sn recovery (%) | 22% | 25% | 37% | 26% | 44% | 27% | 23% |
Sn concentrate (dmt) | 23.3 | 41.2 | 22.9 | 33.4 | 28.9 | 23.8 | 24.1 |
Sn concentrate grade (%) | 51.9 | 48.5 | 42.7 | 56.3 | 56.6 | 51.9 | 51.9 |
Sn contained metal (dmt) | 12.1 | 20.0 | 9.8 | 18.8 | 16.3 | 12.4 | 12.5 |
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Total concentrate (dmt) | 82.2 | 88.8 | 77.6 | 133.4 | 92.4 | 130.2 | 192.4 |
Total contained metal (dmt) | 45.2 | 47.6 | 48 | 85.8 | 55.5 | 81.6 | 124.8 |
Shipments
The historic tungsten and tin concentrate shipments from the La Parrilla mine are as follows:
| Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 |
| Actual | Actual | Actual | Actual | Actual | Actual | Actual |
Tungsten concentrate (t) | 30.1 | 58.9 | 62.1 | 100.2 | 59.2 | 100.0 | 180.0 |
Tin concentrate (t) | 20.2 | 20.6 | 38.1 | 26.1 | 20.0 | 19.3 | 40.8 |
The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
Enquiries:
W Resources Plc Paul Hailes investor@wresources.com www.wresources.com | Grant Thornton UK LLP Colin Aaronson / Harrison Clarke / Lukas Girzadas T: +44 (0) 20 7383 5100 |
Alternative Resource Capital / Shard Capital Alex Wood T:+44 (0) 207 186 9004 www.altrescap.com Damon Heath T:+44 (0) 207 186 9952 www.shardcapital.com | Alma PR Justine James M: +44 (0) 7525 324431 wres@almapr.co.uk |