TIDMWRES
RNS Number : 0119K
W Resources PLC
17 April 2020
17 April 2020
W Resources Plc
("W" or the "Company")
March 2020 Quarterly Production Report
W Resources (AIM:WRES), the tungsten, copper and gold mining
company with assets in Spain and Portugal announces its Q1 2020
quarterly production update for the La Parrilla mine in Spain and
an update on its tungsten, tin and gold projects in Portugal.
-- A total of 274,000 tonnes ("t") of Run of Mine ("ROM") ore
fed to the La Parrilla plant in Q1 2020
-- Tungsten ("WO(3) ") metal production increased 242% to 3,306
metric tonne unit ("mtu") (33,060kg)
-- Tin ("Sn") metal production increased from 207% to 12.1 dry metric tonnes ("dmt")
-- Combined Tin and Tungsten contained metal increased 232% to 45.2t
-- Mining costs and the strip ratio remained low and below the
budgeted mine plan with grade in line with the plan
-- Shipped 48.8t of Tungsten Concentrate and 20.2t of Tin
Concentrate to offtake partners from January 2020 to date
-- Full-scale operations were put on hold in late March due to
Spanish State of Emergency COVID-19 shutdown which has now been
lifted for mining operations
-- Crusher plant and Jig plant are now in full operation and the
Concentrator plant to be restarted imminently following
installation of new cyclones on the spirals to improve density
control and desliming which should materially increase concentrator
plant recovery
Production Summary
La Parrilla Production Summary Q4 2019 Q1 2020 Var %
================================ ======== ======== ======
ROM feed (wmt) 113,322 273,656 141%
Strip ratio 0.56 1.07 91%
Jig plant feed (dmt) 105,579 240,926 128%
Concentrator feed (dmt) 32,042 98,726 208%
WO(3) concentrate (dmt) 21.4 58.9 175%
WO(3) contained metal (mtu) 968 3,306 242%
Sn concentrate (dmt) 7.9 23.3 195%
Sn contained metal (dmt) 3.9 12.1 207%
Total concentrate (dmt) 29.3 82.2 181%
Total contained metal (dmt) 13.6 45.2 232%
================================ ======== ======== ======
('dmt' - dry metric tonnes, 'wmt' - wet metric tonnes, 'mtu' -
metric tonne unit (1 mtu = 10kg of metal)
Michael Masterman, Chairman of W Resources, commented: "
Production at La Parrilla is building, albeit not at the pace we
had anticipated due to early stage plant challenges having an
impact on production levels for Q1 2020, as a result of a
combination of unplanned downtime with mechanical issues with the
jig and the crusher plants, which have now been resolved, and
planned shut downs to implement important production improvement
initiatives.
"The mining and processing operations expanded in Q1 2020 with
key initiatives implemented including construction of a
pre-concentrate stockpile area to allow continued operation of the
concentrator plant when the jig or crusher plants are down,
installation of deslime cyclones ahead of the fines circuit and a
hydrosizer ahead of the shaking tables which are complete and
operational. Production and export of both tin and tungsten
concentrate through the purification FME circuit continued during
April in accordance with the Spanish Mining Authority guidance and
allowances for export operation under the State of Emergency.
Following the expiry of the restrictions, the crusher and jig
plants are now in operation and the full concentrator plant circuit
will restart imminently following installation of cyclones on the
spirals.
"We are mindful that production levels are not where we or our
stakeholders expected them to be, however we are still very much in
the early stages of the ramp-up and the team is well set to achieve
significantly stronger results in the June quarter as a result of
the improvement initiatives implemented in Q1. The increase in
tungsten and tin production demonstrates progress in a very
difficult external environment and we remain focussed on the works
in hand and are confident of making the solid progress needed in
order to reach design capacity."
COVID-19 - Spanish State of Emergency
-- With the spread of COVID-19 in Spain, operations in Q1 2020
have been challenging with the priority being the safety of our
employees and contractors.
-- The closure of non-essential services which limited operations has now been lifted.
-- In early April following clarification from the mining
authorities, W has, with a limited workforce, focused on processing
existing tungsten and tin intermediate product to produce shipment
tonnages and revenue. In addition, the team has proceeded to
install cyclones on the spirals to enable greater density control
and increase concentrator plant recoveries.
-- The plan (subject to Spanish State of Emergency restrictions)
is to restart the concentrator plant operations imminently on
completion of the key works.
-- No W Resources personnel or contractors have been affected by
COVID-19 and strict workplace procedures remain in place.
Operations
-- Strong safety performance continues with no Lost Time
Injuries during the last 12 months and a total recordable injury
frequency rate (TRIFR) of 16.1 which is well below the Spanish
mining industry average of 45.2.
-- Mining and processing operations expanded during Q1 2020 as
the ramp-up of the La Parrilla mine progressed and plant
enhancement modifications were completed.
-- Mining operations continued at low-strip ratios (waste:ore)
averaging 1.07 to 1 during the quarter, well below budget levels
and the mine is delivering the required grade to the plant.
-- Production was lower than planned during the quarter as a
result of unplanned downtime with mechanical issues with the jig
and the crusher plants and planned shutdowns to implement important
production improvement initiatives.
-- Key initiatives implemented include the construction of a
pre-concentrate stockpile area to allow continued operation of the
concentrator plant when jig or crusher plants are down, the
installation of deslime cyclones ahead of the fines circuit and a
hydrosizer ahead of the shaking tables which are complete and
operational. Work is underway to install cyclones ahead of all
spirals to improve density control and desliming which should
materially increase concentrator plant recovery.
-- Tin production was a highlight with higher grades delivered
from the mine and high metal recoveries through the process plant
and 12.1t of contained tin metal produced up from 3.9t in the prior
quarter.
Shipments and Marketing
-- W Resources is shipping all its Tungsten and Tin concentrate
to customers but the volatility and changes in COVID-19 regulations
in Spain and Europe have led to longer lead times to organise and
effect delivery.
-- The Company shipped 48.8t of Tungsten Concentrate and 20.2t
of Tin Concentrate in the March quarter and to the date of this
report.
-- Market prices for European ammonium paratungstate ("APT")
remained at 240-245 USD/mtu throughout the quarter.
-- LME tin prices decreased from 16,850 USD/t to 14,591 USD/t during the quarter.
-- Supply disruptions appear to have reduced Chinese exports of
APT to Europe and the US providing some solid support to
prices.
Tungsten and Tin Projects
-- Mining operations commenced early March 2020 at the Régua
tungsten mine in northern Portugal with the commencement of mining
in the first of two adits with skarn ore zones intersected in the
initial development. Following an extension in Portugal of COVID-19
related restrictions mining activity has been paused.
-- Plant design and procurement activities are near completion
in advance of construction activities which have been rescheduled
to later in the year after the COVID-19 crisis has hopefully
passed.
-- An application to extend the period of the trial mine licence
as a result of the COVID-19 emergency has been requested to the
Portuguese mining authorities.
Gold and Tungsten Exploration
-- The application for the São Martinho gold trial mine licence
continues to advance towards grant with the issue of the licence
expected in late 2020. New expenditure on this project is pending
grant.
Corporate
-- BlackRock Financial Management Inc. ("BlackRock") interest
payments were made on schedule during the quarter and BlackRock has
agreed, subject to documentation, to allow Payment in Kind (or roll
up) of June quarter interest payments.
-- A GBP4m facility was put in place with Atlas Capital Markets
to provide a strong buffer of funds to W Resources.
-- W Resources has applied to four banks for Spanish Government
guaranteed loan facilities and expects to receive feedback during
April on these applications. Timing on receipt of the existing
approved EUR5.3m grant is likely to be delayed with the Extremadura
government sensibly focussed on the COVID-19 crisis.
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Enquiries:
W Resources Plc Grant Thornton UK LLP
Michael Masterman Colin Aaronson / Jen Clarke /
T: +44 (0) 20 7193 7463 Seamus Fricker
www.wresources.com T: +44 (0) 20 7383 5100
Joint Broker Joint Broker
Turner Pope Investments (TPI) Alternative Resource Capital /
Ltd Shard Capital
Andy Thacker / Zoe Alexander Alex Wood
T: +44 (0) 203 657 0050 T:+44 (0) 207 186 9004
www.turnerpope.com 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
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END
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