TIDMWRES
RNS Number : 0213P
W Resources PLC
25 August 2017
25 August 2017
W Resources Plc
("W" or the "Company")
La Parrilla Update
Financial Investment Decision Report and Debt Funding Update
W Resources Plc (AIM:WRES), the tungsten, copper and gold,
exploration and development company with assets in Spain and
Portugal, provides an update on development of its La Parrilla
Project in Spain.
The Company has completed the Financial Investment Decision
("FID") report, a summary of which is available at
www.wresources.co.uk.
La Parrilla is a large scale, low cost tungsten and tin project,
located 300km south of Madrid. JORC compliant resources total 49
million tonnes ("mt") at a grade of 998 parts per million ("ppm")
tungsten trioxide ("WO(3) ") and JORC compliant reserves are 29.8mt
at a grade of 931ppm WO(3) .
The mine is expected to be developed and expanded over the next
12 months 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 concentrate per annum.
FID Summary
Project Phases Phase 1: T2 2Mtpa ROM producing 2,700tpa of WO(3) concentrate
============= ===================================================
Phase 2: T3.5 3.5Mtpa ROM producing 4,000tpa of WO(3) concentrate
============= ===================================================
Capex Operating 2018 2019 2020 2021 2022 Total
(US$'000) Year Capex
========== ====== ===== ===== ====== ==== ======
Total 25,494 1,933 6,116 12,950 809 47,302
====================== ====== ===== ===== ====== ==== ======
Operating Costs Operating Area 2018 2019 2020 2021 2022 Avg. Opex
($ / mtu)
=============== ==== ==== ==== ==== ==== =========
Mining 44 76 42 32 28 44
================================ ==== ==== ==== ==== ==== =========
Processing 62 65 53 58 63 60
================================ ==== ==== ==== ==== ==== =========
Royalty 3 3 4 4 4 4
================================ ==== ==== ==== ==== ==== =========
Tin Credits (11) (22) (14) (16) (14) (15)
================================ ==== ==== ==== ==== ==== =========
Total 98 122 85 78 81 94
================================ ==== ==== ==== ==== ==== =========
Financial Evaluation Initial 6 Years of Production Real 2017 US Dollars (Millions)
============================================= ===============================
Project NPV (After-tax at 10% discount rate) 54
=================================================================== ===============================
IRR (After-tax) % 64
=================================================================== ===============================
Total Revenue 311
=================================================================== ===============================
Total Operating costs (133)
=================================================================== ===============================
Total EBITDA 178
=================================================================== ===============================
Average EBITDA p.a. 29.7
=================================================================== ===============================
Average EBITDA Margin % 57
=================================================================== ===============================
Payback Years 2
=================================================================== ===============================
Price assumptions used in the FID for ammonium paratungstate
(APT) were US$240-325/mtu, and for tin (LME) US$18,000-20,000/t.
Operating costs were calculated in Euros and converted to US$, at
an exchange rate of EUR0.91:US$1. A corporation tax rate of 26% was
assumed.
With an initial six years of planned production, until further
development work has been completed, the current plan for the six
years mining is as follows:
Summary Y1 Y2 Y3 Y4 Y5 Y6 Total
=================== ====== ====== ====== ====== ====== ====== ======
Ore tonnes (Mt) 2 2 3.2 3.5 3.5 3.5 17.7
=================== ====== ====== ====== ====== ====== ====== ======
Waste tonnes (Mt) 3.6 3.4 8.7 4.1 1.5 0.5 22
=================== ====== ====== ====== ====== ====== ====== ======
Strip Ratio 1.82 1.71 2.73 1.19 0.42 0.25 1.35
=================== ====== ====== ====== ====== ====== ====== ======
Grade WO(3) ppm 1,352 1,258 1,025 1,116 1,000 1,008 1,127
=================== ====== ====== ====== ====== ====== ====== ======
Grade Sn ppm 120 121 183 121 114 99 126
=================== ====== ====== ====== ====== ====== ====== ======
The next key development is the debt financing. High level term
sheets have been received and negotiations are advancing well and
to ensure the right outcome. This may now be complete in early Q4
2017 as it is in the shareholders best interest that the Company
obtains the most competitive debt package. The development timeline
from financing to completion of the plant is 12 months, therefore a
Q4 2017 financing completion will pave the way for production in Q4
2018. The timing in concluding the financing is aided by further
strengthening of the European Tungsten APT price to over US$250
metric ton unit ("mtu") this month.
Following finalisation of the FID report and based on
discussions and feedback, the Board has elected to increase the
size of the target debt financing from US$25m to US$30m, which is
expected to allow the Company to remove the equity financing
component previously outlined. Capital and operating costs
estimates remain at the previously indicated highly competitive
levels.
In parallel at La Parrilla, development work continues with
design of the jig, concentrator, mine and associated infrastructure
advancing. Formal feedback on the grants application is expected in
Q4 2017 and the Company is advanced in submitting the approval
documentation to expand the mine from 2mtpa to 3.5mtpa at that
time.
Michael Masterman, Chairman of W Resources commented: "The
fundamentals of La Parrilla are ever more competitive with the
tungsten price increase over the past 12 months, currently priced
at over US$250 mtu. Design and construction for the 2mtpa plant is
advancing and we are working to ensure the Company is well
positioned to accelerate development on completion of the planned
debt financing.
"We appreciate our shareholders patience as we reach the next
major milestone with the debt financing and we are as keen as any
to conclude our negotiations in order to ramp up the La Parrilla
project development."
A summary of the FID report is available on the Company's
website at www.wresources.co.uk.
http://www.rns-pdf.londonstockexchange.com/rns/0213P_-2017-8-25.pdf
In addition, Turner Pope Investments has released a full
research report on W Resources which is available to professional
investors who can request a copy by emailing
jess@turnerpope.com.
Enquiries:
W Resources Plc Grant Thornton UK LLP
Michael Masterman Colin Aaronson / Harrison
T: +44 (0) 20 7193 7463 Clarke
www.wresources.co.uk T: +44 (0) 20 7383 5100
Turner Pope Investments (TPI) Gable Communications
Ltd Justine James
Ben Turner / James Pope T: +44 (0) 20 7193 7463
T: +44 (0) 203 621 4120 M: +44 (0) 7525 324431
www.turnerpope.com
Competent Person
The preparation of the FID report was managed by W Resources Plc
and supported by an expert external team of leading industry
specialists including Golder Associates Pty Ltd, FF Consultores SL,
IDEXMA, ATM and AYMA Mining Solutions.
Technical information in this report and on the W website has
been approved for inclusion by Mr Fernando de la Fuente, who is a
'qualified person' in respect of the AIM Rules for Companies with
over 41 years' experience in the Exploration and Mining Geology
industry. Mr de la Fuente holds a B.Sc. in Geology and an MSc in
Geology from the University of Granada in Spain. He is also a
member of the Spanish College of Geologists (Number 49), the
Spanish Society of Mineralogy, founder member of the Spanish
Society of Geology, member of the Spanish Association of Applied
Geology to Mineral Deposits, member of the Society for Mining,
Metallurgy and Exploration, Inc., member of PDAC.
Competent Person's Statement - La Parrilla Open Pit Mineral
Reserves Statement. The information in this report that relates to
the Ore Reserves (previously announced 14/6/2017) is based on and
fairly represents information and supporting documentation compiled
by Adén Muñoz MEng (Min), a Competent Person who is a Member of the
Australasian Institute of Mining and Metallurgy (AusIMM Membership
No. 322810). Adén is Principal Mining Eng. of AYMA Mining Solutions
and consultant to W Resources Plc. Adén has sufficient experience
to qualify as a Competent Person as defined in the 2012 Edition of
the 'Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves' (the JORC Code). Adén Muñoz
consents to the inclusion in the report of the matters based on his
information in the form and context in which they appear. The Ore
Reserve estimates have been compiled in accordance with the
guidelines defined in the JORC Code. The Competent Person considers
that the FID Report is at least pre-Feasibility Study level report,
and that the economic studies in the FID are positive, to the
extent that extraction can reasonably be justified, and are thus
sufficient for the estimation of an Ore Reserve Estimate in
accordance with the JORC code (2012).
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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