TIDMWRES
RNS Number : 3392F
W Resources PLC
15 July 2021
15 July 2021
W Resources Plc
("W" or the "Company")
Q2 2021 Production Report
W Resources Plc (AIM:WRES), the tungsten, tin and gold mining
company with assets in Spain and Portugal, announces its Q2 2021
quarterly production report for the La Parrilla mine in Spain.
The following highlights the tangible progress the Company is
making towards reaching its T2 run rate later this year:
- Completion of the first water dam resulting in regaining access to the higher-grade ore.
- Increased revenues bolstered by increasing prices of both tungsten and tin.
- Higher plant utilisation, with record utilisation in Q2 2021;
with high expectations of improvements in Q3.
- More robust tungsten recovery in Q2 2021 with record
recoveries for both tungsten and tin during June 2021, with high
expectations of improvements continuing in Q3 2021.
- Looking to move to a 24*7 operating basis no later than Q4
2021, subject to staff recruitment and training.
- Expecting significant improvement in production during H2
based upon our progress in late Q2 and the start of Q3 2021.
In Q2, the plant operated on a five-day week for 11 of the 13
weeks. Each working day constituted a three 8-hour shift pattern,
up to 11 May, when the mine transitioned to a two 12-hour shift
pattern which has resulted in improved efficiencies and
communication between the workforce. Having two shift managers
rather than three also gives better plant stability as well as
better availability and utilisation.
The main priority in Q2 was to resolve the high water levels at
the mine in order for the team to safely access high-grade ore.
Following completion of the 500,000m3 dam, the dewatering of the
open pit was completed on 24 June 2021 and the Company is now
mining and processing the higher-grade ore.
The Company identified that it needed to carry out corrective
and proactive maintenance prior to regaining access to higher-grade
ore. These measures, which were performed successfully, resulted in
a 10-day production shutdown, with production recommencing on 8
June 2021.
In Q2, W achieved the highest quarterly tungsten concentrate
production to date at 106.4t.
In June 2021, W achieved the highest monthly concentrate
production to date (55.6t), notwithstanding the fact the plant
restarted on 8 June. In addition, for the month of June 2021, W
achieved the highest monthly recovery for both tungsten and tin at
56% and 50% respectively.
Based on the progress now being made the Company reconfirms
production guidance of between 880t and 1,000t of concentrate for
the year ending December 2021.
Key Metrics
-- A total of 231,613 tonnes ("t") of Run of Mine ("ROM") ore
fed to the La Parrilla plant in Q2 2021
-- Total tungsten and tin concentrate production of 130.2t
-- Tungsten ("WO(3) ") concentrate production of 106.4t
-- Tin ("Sn") concentrate production of 23.8 dry metric tonnes ("dmt")
La Parrilla Production Summary
Production for Q2 2021 was impacted by the 2-week closure of the
mine at La Parrilla. However due to increasing tungsten recovery
rates June has seen the highest monthly production figures to
date.
The pro-rata below adjusts for the variance in production
days.
Q2 2021 Q1 2021 Variance Variance
La Parrilla Production Actual Actual Comparison Pro rata
Summary
--------------------------- --------- -------- ----------- ---------
WO(3) contained metal
(mtu) 6,919 3,916 76.7% 47%
Sn contained metal (dmt) 12.4 16.3 -24.0% -37%
Total contained metal
(dmt) 81.6 55.5 47.0% 23%
--------------------------- --------- -------- ----------- ---------
('dmt' - dry metric tonnes, 'mtu' - metric tonne unit (1 mtu =
10kg of metal))
Michael Masterman, Chairman of W Resources , commented: "Whilst
we faced further challenges due to the impact of having to build a
500,000m3 dam, we were pleased to complete the dewatering of the
open pit on 24 June 2021 enabling us to safely regain access to the
higher-grade ore. The impact of lack of access to the higher-grade
ore was somewhat mitigated with our tungsten recovery rates
increasing from 32% to 47% enabling us to produce a record amount
of tungsten concentrate in the quarter.
"We are now highly encouraged that we are making tangible
progress having achieved our highest monthly production of
concentrate in June 2021, notwithstanding this was in a three-week
period. Looking ahead we now have access to a better quality and a
better grade of ore which should see our production numbers
increase towards our T2 target".
Q2 2021 Overview
In Q2, the Company successfully completed the construction of a
new water dam at the La Parrilla mine in order to resolve the issue
of the high water levels.
Dewatering of the mine pit was completed on Thursday, 24 June
and we are now able to safely regain access to high-grade ore
areas.
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 at the design stage and is expected to be completed in Q4
2021. This is a cautionary measure and will ensure future
production is not adversely affected should we have another very
wet winter with high rain fall.
For the month of June 2021, recovery rates for tungsten and tin
reached circa 56% and 50% respectively. W achieved consistent ROM
feed grade in June 2021, with circa 20% more metal content than
expected.
Q2 2021 Q1 2021 Variance Variance
La Parrilla Production Actual Actual Comparison Pro rata
Summary
--------------------------------- --------- --------- ------------ ---------
ROM feed: tonnes mined
(wmt) 231,613 196,094 18% -2%
Strip ratio 2.89 5.13 -44%
Jig plant: tonnes processed
(dmt) 173,901 163,866 6% -12%
WO(3) feed grade (ppm) 855 744 15%
WO(3) recovery (%) 47% 32% 47%
WO(3) concentrate (dmt) 106.4 63.5 68% 40%
WO(3) concentrate grade
(%) 65.0 61.6 6%
WO(3) contained metal
(mtu) 6,919 3,916 77% 47%
Sn feed grade (ppm) 259 228 14%
Sn recovery (%) 27% 44% -39%
Sn concentrate (dmt) 23.8 28.9 -18% -31%
Sn concentrate grade
(%) 51.9 56.6 -8% -24%
Sn contained metal (dmt) 12.4 16.3 -24% -37%
Total concentrate (dmt) 130.2 92.4 41% 17%
Total contained metal
(dmt) 81.6 55.5 47% 23%
---------------------------------- --------- --------- ------------ ---------
* Q1 2021 production was based on working 5 days a week and Q2
production was also based on working five days a week
* Q1 2021 production consisted of 10 working weeks, Q2 2021 production
consisted of 11 working weeks
Recovery
Tungsten recovery increased during Q2 2021 from 32% to 47%,
although tin recovery fell from 45% to 27%. Working practices at
the mine have been updated to ensure better recovery rates for both
tungsten and tin and the benefits of these changes were clearly
evidenced in June 2021.
Health and Safety
During the period there were two accidents and two minor
injuries. Additional training has been provided to the staff
involved. There were no reported Covid-19 incidents.
Plant Utilisation
Plant utilisation increased from 84.8% to 88.2% and this is the
best performance to-date.
Shipments
Five shipments of tungsten concentrate totalling 100t and one
shipment of tin concentrate totalling 19.3t were completed in
Q2
Q2 2021 Q1 2021 Variance Variance
La Parrilla Shipment
Summary Actual Actual Comparison Pro rata
---------------------- -------- -------- ----------- ---------
Tungsten concentrate
(t) 100.0 59.2 68.9% 41%
Tin concentrate (t) 19.3 20 -3.5% -20%
Commodity Pricing
European ammonium paratungstate ("APT") pricing remains strong
and has further increased to US$287-US$292 per metric tonne unit
("MTU") - Fastmarkets MB, 9 July 2021.
The LME Tin price continues to strengthen reaching a three-month
forward price of $33,550 per tonne as per the Fastmarkets MB, 13
July 2021.
Production Guidance
The Company continues to expect that total annual production
will be between 880t and 1,000t of concentrate for the twelve
months ending 31 December 2021.
Employees
The number of staff employed at La Parrilla mine as at 30 June
2021 was 90 compared to 82 as at 31 March. This number is slightly
lower than the guidance given in the Q1 update but recruitment of
additional staff is ongoing.
La Parrilla Historic Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
Production
Summary Actual Actual Actual Actual Actual Actual
----------------------------- -------- -------- -------- -------- -------- --------
No. of working days 39 52 45 54
ROM feed: tonnes mined
(wmt) 273,656 253,256 171,454 261,841 196,094 231,613
Strip ratio 1.07 0.58 1.38 1.19 5.13 2.89
Jig plant: tonnes processed
(dmt) 240,926 228,060 148,417 236,677 163,866 173,901
WO(3) feed grade (ppm) 800 845 857 943 744 855
WO(3) recovery (%) 17% 16% 30% 31% 32% 47%
WO(3) concentrate (dmt) 58.9 47.6 54.7 100.0 63.5 106.4
WO(3) concentrate grade
(%) 56.1 57.4 69.8 67.0 61.6 65.0
WO(3) contained metal
(mtu) 3,306 2,756 3,820 6,698 3,916 6,919
Sn feed grade (ppm) 282 307 181 321 228 259
Sn recovery (%) 22% 25% 37% 26% 44% 27%
Sn concentrate (dmt) 23.3 41.2 22.9 33.4 28.9 23.8
Sn concentrate grade
(%) 51.9 48.5 42.7 56.3 56.6 51.9
Sn contained metal (dmt) 12.1 20.0 9.8 18.8 16.3 12.4
Total concentrate (dmt) 82.2 88.8 77.6 133.4 92.4 130.2
Total contained metal 48.
(dmt) 45.2 47.6 0 85.8 55.5 81.6
----------------------------- -------- -------- -------- -------- -------- --------
Shipments
The historic shipments from La Parrilla are as follows:
La Parrilla Historic Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
Shipment Summary Actual Actual Actual Actual Actual Actual
---------------------- -------- -------- -------- -------- -------- --------
Tungsten concentrate
(t) 30.1 58.9 62.1 100.2 59.2 100.0
Tin concentrate (t) 20.2 20.6 38.1 26.1 20.0 19.3
With increasing production and improving recoveries and plant
utilisation, W looks forward to updating the market in August 2021
on the excellent progress being made at the mine at La
Parrilla.
Information communicated within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014 which is part of UK law by virtue of
the European Union (withdrawal) Act 2018. 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
Paul Hailes Colin Aaronson / Harrison Clarke
investor@wresources.com / Lukas Girzadas
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 / James Pope 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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