TIDMWRES
RNS Number : 4516O
W Resources PLC
01 June 2020
1 June 2020
W Resources Plc
("W" or the "Company")
Final Results for the Year Ended 31 December 2019
W Resources Plc (AIM:WRES), the tungsten, tin and gold mining
company with assets in Spain and Portugal, announces its audited
financial results for the year ended 31 December 2019.
HIGHLIGHTS
La Parrilla, Tungsten and Tin, Spai n
-- Construction completed on this world class tungsten and tin project in September 2019.
-- Initial production of the T2 stage production commenced in November 2019.
-- Production in Q4 2019 built at a slower pace than anticipated
due to early stage plant challenges, which continue to be
resolved.
-- Production in Q1 2020 was reported on 17 April 2020,
recording an increase in tungsten metal production to 45.2 tonnes
(combined tungsten and tin).
-- Due to the COVID-19 pandemic, the timing of the EUR5.3m Grant
from the Junta de Extremadura is to be confirmed with the local
Government needing to prioritise resources in response to the
ongoing pandemic.
Régua Tungsten Project, Portugal
-- Régua has significant synergies with La Parrilla as it has
materially lower capital costs and will increase La Parrilla's
final concentrate production.
-- Mining operations commenced in March 2020 and is currently
paused due to the challenges presented by COVID-19.
COVID-19
The recent COVID-19 pandemic has meant that 2020 thus far has
been a very challenging time for Spain and Portugal as it has for
the rest of the world. Our priority has remained the health and
safety of our personnel and we continued to work hard at both our
operational sites in Spain and Portugal to review and maintain our
priorities on this matter in relation to our staff and
contractors.
In order to mitigate against risk of further impacts on
production as a result of this pandemic, W has secured additional
funding to ensure the Company has a strong buffer in these
unprecedented times.
Chairman of W, Michael Masterman commented: "Whilst 2019 was a
very challenging year with the core priority being completion of
the La Parrilla plant and commencement of production and ramp-up,
La Parrilla is in operation and is starting to reap the benefits
from the substantial plant improvement programme executed over the
last 3 months. The bulk of the operational plant improvements have
been installed and are now operational. We are of the view that the
plant can progressively increase both recoveries and utilisation to
increase production to design capacity."
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
APPIX 1 - JORC COMPLIANT MINERAL RESOURCE ESTIMATES
La Parrilla Proven and Probable Mineral Reserves - JORC 2012
Tonnes Grade Metal Content Grade Metal Content
'000 WO(3) (ppm)
------ ------------
WO(3) (t) Sn (ppm) Sn (t)
---------- ------ ------------ -------------- -------- ----------------
Proven 1,177 995 1,171 251 295
Probable 28,577 928 26,511 111 3,156
---------- ------ ------------ -------------- -------- ----------------
Total 29,754 931 27,683 116 3,451
Note: The La Parrilla mine reserves are set out in the following
table based on the optimal LOM Pit. Estimate for La Parrilla
Deposit using a 330 ppm WO(3) Cut-Off Grade and 5% dilution. All
tonnes quoted are dry tonnes. Differences in the addition of tonnes
to the total displayed is due to rounding.
The La Parrilla JORC-compliant mineral reserves update was fully
disclosed, with JORC Table 1 in a Company news release on 14 June
2017. Mr Adén Muñoz of AYMA Mining Solutions SL, a Spanish Mining
Engineering company based in Seville was the Competent Person
responsible for the La Parrilla Proven and Probable Mineral
Reserves. The mineral reserves are based on indicated and measured
resources prepared by Golder Associated in March 2017 (RNS, 11 May
2017).
Mineral Resources for La Parrilla Deposit Using a 400 ppm WO(3)
Cut-Off Grade within Mineralised Domains - JORC 2012
Classification Tonnage (Mt) WO(3) (ppm) Sn (ppm)
--------------- ------------ ----------- --------
Measured 1 1,115 278
Indicated 35 1,004 110
Inferred 13 974 97
---------------- ------------ ----------- --------
49 998 110
The La Parrilla JORC-compliant mineral resource update was fully
disclosed, with JORC Table 1 in a Company news release on 11 May
2017. Mr Andrew Weeks (Golder Associates Pty Ltd) was the Competent
Person responsible for the Mineral Resource Estimate for the La
Parrilla deposit.
Régua JORC Compliant Mineral Resource Estimate reported at a
0.1% WO(3) cut-off grade
Category Tonnes WO(3) % WO(3) metal
(ky)
---------- ------- ------- -----------
Indicated 3.74mt 0.28 10.6
Inferred 0.72mt 0.21 1.5
----------- ------ ------- -----------
Total 4.47mt 0.27 12.1
The Régua JORC compliant mineral resource update was fully
disclosed, with JORC Table 1 in a Company news release on 5
February 2020. Mr Andrew Weeks (Golder Associates Pty Ltd) was the
Competent Person responsible for the Mineral Resource Estimate for
the Régua deposit.
São Martinho Maiden JORC Compliant Mineral Resource Estimate
Category Tonnes Au (g/t) Au Content Cut-off
(Oz)
---------- -------- -------- ---------- -------
0.5 g/t
Indicated 0.48 mt 1.03 17,363 Au
0.5 g/t
Inferred 2.56 mt 1.05 94,624 Au
----------- ------- -------- ---------- -------
0.5 g/t
Total 3.04 mt 1.04 111,987 Au
The São Martinho maiden JORC-compliant mineral resource update
was fully disclosed, with JORC Table 1 in a W Resources Plc RNS
announcement on 8 June 2016. Mr Jorge Peres (Golder Associates Pty
Ltd) was the Competent Person responsible for the Mineral Resource
Estimate for the São Martinho deposit.
W RESOURCES PLC
CHAIRMAN'S STATEMENT
FOR THE YEARED 31 DECEMBER 2019
W Resources' focus for 2019 was to complete the construction of
its world class La Parrilla Tungsten and Tin Project in Spain,
which at full production will deliver 2,500tpa of tungsten and is
anticipated that this will deliver EBITDA of c.US$20.0m per annum
(T2 stage). Construction of the La Parrilla plant was completed in
September 2019 and production commenced in late November 2019. La
Parrilla, with its large-scale production capacity and low-cost
structure will form the base of our cash generation and expansion
in the year ahead.
Building a mine of this scale comes with its challenges and
whilst the timeline to achieve this was delayed in 2019, the team
has worked tirelessly to ensure the best outcome in each phase of
development. This is now gaining traction for 2020 as we build
towards reaching target production and delivering improved EBITDA
in the year ahead.
In this environment of unprecedented market uncertainty, our
main priorities in 2020 are to take La Parrilla to design capacity
by the end of 2020 and to add an initial stream of tungsten
production from our newly opened Régua trial mine to the La
Parrilla core production base.
Planning is in place to install ore sorters at La Parrilla to
effect an increase in production capacity of the current T2 - 2
million tonne per annum plant. We will gradually take the expansion
to T3.5, demonstrating commercial operations in incremental steps
prior to substantially expanding production capacity.
COVID-19 and Safety
The recent COVID-19 pandemic has meant that 2020 thus far has
been a very challenging time for Spain and Portugal as it has for
the rest of the world. Our priority has remained the health and
safety of our personnel and we continued to work hard at both our
operational sites in Spain and Portugal to review and maintain our
priorities on this matter in relation to our staff and contractors.
On 14 March 2020, Pedro Sánchez, Spain's Prime Minister, declared a
national State of Emergency, which was subsequently updated
stipulating with effect from 31 March 2020 that non-essential
services, including mining, be closed until Thursday 9 April. The
closure of non-essential services which limited operations was
subsequently lifted and production at La Parrilla in Spain
recommenced, following key works to improve the circuit.
In order to mitigate against risk of further impacts on
production as a result of this pandemic, W has secured additional
funding to ensure the Company has a strong buffer in these
unprecedented times.
Our 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 per million hours worked, which is
well below the Spanish mining industry average of 45.2. The health
and safety of our all employees, contractors and customers remains
an absolute priority and we are working hard to ensure we implement
all measures necessary to maintain this in the current
pandemic.
TUNGSTEN & TIN
La Parrilla - Spain
La Parrilla is a large-scale, low-cost, long-life tungsten and
tin project, located approximately 310km southwest of Madrid. It
has Australasian Joint Ore Reserves Committee ("JORC") compliant
resources totalling 49 million tonnes ("mt") at a grade of 0.1% of
tungsten trioxide ("WO(3) ") and JORC compliant reserves of 29.8mt
(as shown in Appendix 1 of the Consolidated Financial
Statements).
The first phase of the ramp-up is to reach the target to mine
2mtpa of ROM and produce approximately 2,500 tonnes ("t") of
tungsten concentrate and 200t of tin ("Sn") concentrate per annum
("T2").
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 and the restrictive
conditions during the COVID-19 State of Emergency which have
necessitated mine and plant closure and operations limitation on
equipment sourcing and day-to-day safe personal management which
is, of course, our main priority. Significant progress has been
made at the plant to address and rectify these challenges,
including implementation of 15 plant improvement initiatives at a
total cost of EUR300,000. The improvements are directed at
significantly increasing overall recovery and reducing unplanned
downtime. We expect to see these changes translate into
significantly increased daily and monthly production outcomes.
W RESOURCES PLC
CHAIRMAN'S STATEMENT
FOR THE YEARED 31 DECEMBER 2019
The mining and processing operations have 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.
We are mindful that production levels at the start of the year
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 stronger results in the June quarter
resulting from plant improvement initiatives implemented in Q1
2020.
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.
Notwithstanding these challenges, we are delighted to have
completed construction of this impressive large-scale, long-life
tungsten and tin project and to now be focussing on the matter in
hand of building production at this world class mine.
Grant Update
In March 2018, the Junta de Extremadura in Spain awarded a grant
of EUR5.3m to W's 100% owned subsidiary, Iberian Resources Spain
SL. The conditions set, in order to be able to receive the Grant,
were a minimum investment in plant and equipment of EUR16.6m and
the creation of at least 20 full time positions. With these
conditions successfully met, W provided the documentation to
formally apply to receive this Grant. Timing of the Grant is yet to
be confirmed with the local Government needing to prioritise
resources in response to the ongoing COVID-19 pandemic. The team
continues to enjoy strong on-the-ground relationships and
appreciates the Government's support.
Tungsten and Tin sales in a challenging global environment
The COVID-19 crisis has created challenges across global
tungsten and tin markets in terms of both logistics of delivery and
in our customers' market environments. In these market conditions,
we continue to sell and deliver all our product to our offtake
partners and have broadened our distribution capacity. At times
during the peak of the crisis, transportation logistics have been
challenging to manage and therefore movement of product has been
slower than it has been previously, but in credit to the team we
have solved these issues in a timely way.
Importantly the quality of our Tungsten and Tin concentrate
consistently meets or exceeds customer offtake requirements and we
have seen consistent increases in concentrate quality and, in
producing up to 65% WO(3) from the plant, we have shown that we are
comfortably able to exceed our benchmark grades of 60%.
PORTUGUESE PROJECTS
Régua Tungsten Mine
This high-grade, development-ready tungsten project with low
capital cost has a trial mine licence, and an updated JORC
compliant mineral resource of 4.47Mt at a grade of 0.27% WO(3) ,
including an indicated resource of 3.74mt at a grade of 0.28% WO(3)
, which was completed by Golder Associates Pty Ltd ("Golder") in
January 2020.
As W's second mine to come on stream, following the start of
production at La Parrilla in November 2019, Régua has significant
synergies with La Parrilla as it has materially lower capital costs
and will increase La Parrilla's final concentrate production.
Mining operations at R ég ua commenced early March 2020 with the
commencement of mining in the first of two adits with skarn ore
zones intersected in the initial development. However, 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. As a result of the requirement to
pause operations, an application to extend the period of the trial
mine licence has been submitted to the Portuguese mining
authorities.
W RESOURCES PLC
CHAIRMAN'S STATEMENT
FOR THE YEARED 31 DECEMBER 2019
With ore haulage and crushing contracts in place with Francisco
Pereira Marinho Imãos SA ("FPMI"), once mining recommences later
this year, ore from Régua will be hauled 27km to the FPMI crushing
plant and crushed to a range of 5-10mm. Importantly, as part of the
service contract, FPMI will use the waste ore for rehabilitation of
their existing quarry providing local environmental benefits. The
estimated crushing and haulage cost is cUS$40-45/mtu and W will pay
EUR50,000 to expand access roads for haulage.
Tarouca Exploration
While the development focus has been on Régua we have also
applied for a new exploration licence at Tarouca. We expect to be
able to tie in operations at Tarouca to the Régua mining and
processing operations once the updated licence is granted.
CAA Portalegre - Gold
São Martinho currently has a JORC 2012 gold resource of over
110,000oz. Results from the drilling campaigns in 2017 and 2018
provided a solid base to drive extension drilling with the
potential for a materially larger resource.
We have advanced São Martinho through a successful drilling
programme and submitted an application for a trial mine and gold
production licence in September 2018. Although the COVID-19 crisis
and associated state of emergency in Portugal has further delayed
the final approval process, we expect the trial mine licence to be
granted in due course. The trial mine licence, once granted, will
allow W to pursue a drilling programme to expand the resource and
resolve the geological interpretations of a flat lying structure
(Golder) and a deeply dipping structure (SRK) which have partially
arisen due to the combination of structural complexity and
multistage mineralising events.
Importantly, a trial mine is a key level of licence tenure and
will provide the authority to mine shallow ore and produce gold on
a pilot basis. We will actively explore opportunities to bring in
Joint Venture parties and monetise the gold discovery in 2020. New
expenditure on this project is pending grant of the trial mining
licence.
Finance
Whilst completion of the new plant at La Parrilla was later than
planned, it has remained our priority to ensure W has had a strong
buffer of additional financial resources in place to mitigate
against the resulting delayed production and also to ensure W
remains resilient in the year ahead with the uncertainty created by
COVID-19.
In the FY19, the Company secured a EUR3m loan facility with Caja
Rural de Extremadura to provide an advance of funding against the
EUR5.3m grant awarded by the Junta de Extremadura ("Grant"). This
loan had an interest rate of 1.75% per annum for a term of 15
months, although subsequent to 31 December, 2019, on 31 January
2020, Iberian Resources Spain S. L. signed a loan agreement for
EUR5m with Banco Santander, S.A ("Santander") which repaid the
EUR3m loan from the Caja Rural de Extremadura. The Santander
facility interest rate is 3% per annum, and this loan is now
secured by a pledge over the rights to the Grant funds. As stated
above, the timing of receipt of the Grant is to be advised by the
local Government, which is currently and understandably
prioritising its efforts towards coping with the COVID-19
pandemic.
In August 2019, BlackRock Financial Management Inc.
("BlackRock") agreed to capitalise an additional six months of
interest payments of the BlackRock term loan, which equated to
US$1.29m, and was added to the final loan balance . Furthermore, in
December 2019, BlackRock increased its existing loan facility by
US$5 million. The additional facility and the roll up of interest
(PIK) increased the total outstanding BlackRock loan balance to
US$50.5m at 31 March 2020.
During 2019, W raised a total of GBP2.57m in equity funding. In
September, the Company completed a EUR1m Placing at 0.5p per
Ordinary Share, a premium to the share price, from supportive
private Spanish investors.
In November 2019, the Company secured a funding package to raise
cEUR2.78m which comprised a first tranche of EUR1.358m secured
through: an equity placement of GBP289k (EUR330k) at 0.40p, loans
from Directors of GBP344k (EUR392k); and Blackrock agreed that an
additional 50% of the November interest payment, amounting to
US$700k (EUR636k) could be added to the existing debt facility (PIK
- payment in kind). Subsequent to this, in January 2020 the
short-term loans provided by three of W's directors were converted
into ordinary shares at a price of 0.307p per Ordinary Share.
W RESOURCES PLC
CHAIRMAN'S STATEMENT
FOR THE YEARED 31 DECEMBER 2019
As part of the second tranche, the Company completed a Placing
to raise GBP360,000 at a price of 0.40p per Ordinary Share to a new
Spanish investor in addition to securing a new EUR500,000 revolving
credit facility with leading Spanish Bank; CaixaBank, S.A.
Tungsten and Tin
Tungsten and Tin demand and supply has been disrupted by the
COVID-19 crisis.
Given the severity of the crisis, Tungsten prices have been
relatively solid and sit at US$215-225, which is 22% down on budget
expectations. There have been substantial shutdowns of capacity in
China, the world's largest producer of tungsten and as the world
economy comes out of the various lockdowns we do expect continued
price volatility and a boost in global demand although it is too
early to judge the supply/demand balance for the rest of 2020.
Tin prices on the London Metal Exchange started 2020 trading at
US$17,125 per metric ton, and moved in an upward trend until
January 2020, when the coronavirus outbreak took over news
headlines and the price came under pressure. Notably, the market
view is that whilst tin plays a pivotal role in all modern
technology and has a large role to play in the electric vehicle
market, it is the low-cost producers who will continue to reap the
benefits due to the unpredictable nature of the COVID-19 pandemic.
With a more stable environment, market forecasts expect tin to
stabilise in the mid US$20,000 per metric ton. (source: Investing
News).
Outlook
2019 was a very challenging year with the core priority being
completion of the La Parrilla plant and commencement of production
and ramp-up.
There is no question, however, that the global challenges of
2020 are significantly more difficult, but I believe that our team
has responded to them thoughtfully and effectively.
-- States of Emergency in both Spain and Portugal have required
short-term closures of both La Parrilla and Régua.
-- Régua mining and construction operations are currently closed
pending confirmation from the Portuguese authorities. We expect to
recommence mining in Q3 2020.
-- La Parrilla is in operation and is starting to reap the
benefits from the substantial plant improvement programme executed
over the last 3 months.
-- Production on the March quarter was reported on 17 April
2020, recording an increase in tungsten metal production to 45.2
tonnes (combined tungsten and tin).
-- During the COVID-19 crisis shut down which came into effect
early in June, we have effected substantial improvements in
operating capacity which we expect to translate into significant
increases in production in the latter stages of the June
quarter.
-- The bulk of the operational plant improvements have been
installed and are now operational. We are of the view that the
plant can progressively increase both recoveries and utilisation to
increase production to design capacity.
-- Stock and commodity market conditions will remain volatile
and subject to substantial uncertainty.
The team, with the strong support of the Board, continues to
execute development well and this is a credit to the calibre of the
management team.
________________
Michael Masterman
Chairman
W RESOURCES PLC
GROUP STRATEGIC REPORT
FOR THE YEARED 31 DECEMBER 2019
The directors present their strategic report of the company and
the group for the year ended 31 December 2019.
REVIEW OF BUSINESS
The results for the year and the financial position of the Group
and the Company at the year-end are as shown in the annexed
financial statements.
The Group has incurred a loss after tax of EUR2,942,000 for the
year ended 31 December 2019. This is driven by exchange losses of
EUR653,000 on translation of the US dollar denominated BlackRock
Financial Management Inc. loan into Euros at 31 December 2019 and
finance costs associated with the BlackRock Financial Management
Inc. loan of EUR1,054,000. An operating loss of EUR1,244,000 was
incurred in the year to 31 December 2019, compared to an operating
loss of EUR899,000 for the year to 31 December 2018.
Detailed reviews of activities, business developments and
projects are included within the Chairman's Statement.
PRINCIPAL RISKS AND UNCERTAINTIES
The Group uses various financial instruments. These include
cash, convertible loans and various other items, such as trade
debtors and trade creditors that arise directly from its
operations. The main purpose of these financial instruments is to
raise finance for the Company's operations.
The existence of these financial instruments exposes the Company
to a number of financial risks, which are described in more detail
below. The Directors review and agree policies for managing each of
these risks and they are summarised below. These policies have
remained unchanged from previous years.
Price Risk
The Directors consider that the price of tungsten is an area of
potential risk. This is reviewed on a constant basis by the Board
and Senior Management.
Liquidity Risk
The Group seeks to manage financial risk by ensuring sufficient
liquidity is available to meet foreseeable needs and to invest cash
assets safely and profitably.
Currency Risk
The Group principally operates in GBP and EUR and has borrowings
in US$. It does not currently consider the risk of exposure to be
material. As such the Directors do not currently consider it
necessary to enter into forward exchange contracts. This situation
is monitored on a regular basis.
ON BEHALF OF THE BOARD:
________________
Michael Masterman
Chairman
Date: 1 June 2020
W RESOURCES PLC
CONSOLIDATED STATEMENT OF INCOME AND OTHER COMPREHENSIVE
INCOME
FOR THE YEARED 31 DECEMBER 2019
2019 2018
CONTINUING OPERATIONS Notes EUR'000 EUR'000
Revenue 2 365 219
Cost of sales (343) (219)
GROSS PROFIT 22 -
Operating expenses (498) (77)
Administrative expenses (768) (822)
OPERATING LOSS BEFORE EXCEPTIONAL ITEMS (1,244) (899)
Exceptional items - 165
OPERATING LOSS (1,244) (734)
Finance costs 4 (1,200) (1,082)
Exchange losses (498) (2,423)
Impairment charge - (353)
-------- --------
LOSS BEFORE INCOME TAX 5 (2,942) (4,592)
Income tax 6 - 76
LOSS FOR THE YEAR (2,942) (4,516)
OTHER COMPREHENSIVE INCOME
Items that will not be reclassified
to profit or loss:
Translation reserve - 721
Income tax relating to items that will - -
not be reclassified to profit or loss
OTHER COMPREHENSIVE INCOME FOR THE YEAR,
NET OF INCOME TAX - 721
TOTAL COMPREHENSIVE INCOME FOR THE YEAR (2,942) (3,795)
Loss attributable to owners of the parent (2,942) (4,516)
Total comprehensive income attributable
to owners of the parent (2,942) (3,795)
Loss per share expressed in cents per
share: 8
Basic -0.05 -0.08
Diluted -0.05 -0.08
W RESOURCES PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 DECEMBER 2019
ASSETS 2019 2018
NON-CURRENT ASSETS Notes EUR'000 EUR'000
Intangible assets 9 31,882 26,609
Property, plant and equipment 10 30,103 18,551
Investments 11 - -
61,985 45,160
CURRENT ASSETS
Inventories 12 415 179
Trade and other receivables 13 6,580 6,580
Cash and cash equivalents 14 2,460 6,787
9,455 13,546
TOTAL ASSETS 71,440 58,706
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 15 7,822 7,137
Share premium 16 36,658 34,418
Share based payment reserve 16 1,622 1,622
Merger reserve 16 1,014 1,014
Translation reserve 16 - (3,791)
Retained earnings 16 (28,027) (21,294)
TOTAL EQUITY 19,089 19,106
LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities - borrowings
Interest bearing loans and borrowings 18 44,312 33,746
CURRENT LIABILITIES
Trade and other payables 17 3,978 5,854
Financial liabilities - borrowings
Interest bearing loans and borrowings 18 4,061 -
8,039 5,854
TOTAL LIABILITIES 52,351 39,600
TOTAL EQUITY AND LIABILITIES 71,440 58,706
The financial statements were approved by the Board of Directors
and authorised for issue on 1 June 2020 and were signed on its
behalf by:
________________
Michael Masterman
Chairman
Date: 1 June 2020
W RESOURCES PLC
COMPANY STATEMENT OF FINANCIAL POSITION
31 DECEMBER 2019
ASSETS 2019 2018
NON-CURRENT ASSETS Notes EUR'000 EUR'000
Investments 11 6,695 1,695
6,695 1,695
CURRENT ASSETS
Trade and other receivables 13 63,185 51,717
Cash and cash equivalents 14 1,670 4,848
64,855 56,565
TOTAL ASSETS 71,550 58,260
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 15 7,822 7,137
Share premium 16 36,658 34,418
Share based payment reserve 16 1,622 1,622
Merger reserve 16 1,014 1,014
Translation reserve 16 - (5,683)
Retained earnings 16 (20,586) (14,207)
TOTAL EQUITY 26,530 24,301
LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities - borrowings
Interest bearing loans and borrowings 18 44,273 33,746
CURRENT LIABILITIES
Trade and other payables 17 747 213
TOTAL LIABILITIES 45,020 33,959
TOTAL EQUITY AND LIABILITIES 71,550 58,260
The financial statements were approved by the Board of Directors
and authorised for issue on 1 June 2020 and were signed on its
behalf by:
________________
Michael Masterman
Chairman
Date: 1 June 2020
W RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2019
Share
Called Based
up
Share Retained Share Payment Merger Translation Total
Capital Earnings Premium Reserve Reserve Reserve Equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance at 1 January
2018 6,397 (16,778) 31,655 67 1,014 (4,512) 17,843
Changes in equity
Total comprehensive
income - (4,516) - - - 721 (3,795)
Issue of share capital 740 - 2,763 - - - 3,503
Transactions with owners - - - 1,555 - - 1,555
-------- --------- -------- -------- -------- ------------ --------
Balance at 31 December
2018 7,137 (21,294) 34,418 1,622 1,014 (3,791) 19,106
-------- --------- -------- -------- -------- ------------ --------
Changes in equity
Total comprehensive
income - (2,942) - - - - (2,942)
Issue of share capital 685 - 2,240 - - - 2,925
Transfers between reserves - (3,791) - - - 3,791 -
Transactions with owners - - - - - - -
-------- --------- -------- -------- -------- ------------ --------
Balance at 31 December
2019 7,822 (28,027) 36,658 1,622 1,014 - 19,089
======== ========= ======== ======== ======== ============ ========
W RESOURCES PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2019
Share
Called Based
up
Share Retained Share Payment Merger Translation Total
Capital Earnings Premium Reserve Reserve Reserve Equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance at 1 January
2018 6,397 (12,562) 31,655 67 1,014 (5,491) 21,080
Changes in equity
Issue of share capital 740 - 2,763 - - - 3,503
Total comprehensive
income - (1,645) - - - (192) (1,837)
Transactions with directors - - - 1,555 - - 1,555
-------- --------- -------- -------- -------- ------------ ---------
Balance at 31 December
2018 7,137 (14,207) 34,418 1,622 1,014 (5,683) 24,301
-------- --------- -------- -------- -------- ------------ ---------
Changes in equity
Issue of share capital 685 - 2,240 - - - 2,925
Total comprehensive
income - (696) - - - - (696)
Transfers between reserves - (5,683) - - - 5,683 -
Transactions with directors - - - - - - -
-------- --------- -------- -------- -------- ------------ ---------
Balance at 31 December
2019 7,822 (20,586) 36,658 1,622 1,014 - 26,530
======== ========= ======== ======== ======== ============ =========
W RESOURCES PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2019
2019 2018
Cash flows from operating activities Notes EUR'000 EUR'000
Cash generated from operations 1 (4,592) 5,989
Interest paid (146) (109)
Finance costs paid (426) (5,311)
Tax paid - (64)
--------- ---------
Net cash from operating activities (5,164) 505
--------- ---------
Cash flows from investing activities
Purchase of intangible fixed assets (7,343) (10,440)
Purchase of tangible fixed assets (4,235) (14,315)
--------- ---------
Net cash from investing activities (11,578) (24,755)
--------- ---------
Cash flows from financing activities
New loans in year 9,050 27,606
Loan repayments in year - (384)
New hire purchases in year 58 -
Payment of lease liabilities (8) -
Amount introduced by directors 390 -
Share issue 685 740
Share issue premium 2,329 2,904
Translation adjustment - (191)
Share issue costs (89) (141)
--------- ---------
Net cash from financing activities 12,415 30,534
--------- ---------
(Decrease) / increase in cash and cash
equivalents (4,327) 6,284
Cash and cash equivalents at beginning
of year 2 6,787 503
--------- ---------
Cash and cash equivalents at end of year 2 2,460 6,787
========= =========
W RESOURCES PLC
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2019
2019 2018
Cash flows from operating activities Notes EUR'000 EUR'000
Cash generated from operations 1 (12,364) (22,639)
Interest paid - (2)
Finance costs paid (426) (4,360)
Tax paid - (62)
--------- ---------
Net cash from operating activities (12,790) (27,063)
--------- ---------
Cash flows from investing activities
Interest received 1,297 780
Net cash from investing activities 1,297 780
--------- ---------
Cash flows from financing activities
New loans in year 5,000 27,606
Amount introduced by directors 390 -
Share issue 685 740
Share premium 2,329 2,904
Translation reserve - (192)
Share issue costs (89) (141)
--------- ---------
Net cash from financing activities 8,315 30,917
--------- ---------
(Decrease) / increase in cash and cash
equivalents (3,178) 4,634
Cash and cash equivalents at beginning
of year 2 4,848 214
--------- ---------
Cash and cash equivalents at end of year 2 1,670 4,848
========= =========
W RESOURCES PLC
NOTES TO THE STATEMENTS OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2019
1. RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS
2019 2018
Group EUR'000 EUR'000
Loss before income tax (2,942) (4,592)
Depreciation charges 280 251
Exchange losses on new loans - 2,952
Translation reserve - 727
Share warrants issued - 264
Share options issued - 116
Impairment of intangible assets - 353
Finance costs 1,200 1,082
(1,462) 1,153
Increase in inventories (236) (127)
(Increase) / decrease in trade and other
receivables (628) 112
(Decrease) / increase in trade and other
payables (2,266) 4,851
--------- ---------
Cash generated from operations (4,592) 5,989
========= =========
Company
Loss before income tax (696) (1,722)
Exchange losses on new loans - 2,952
Increase in inter-group loans (11,383) (25,274)
Share warrants issued - 264
Share options issued - 115
Finance costs 872 804
Finance income (1,297) (780)
(12,504) (23,641)
(Increase) / decrease in trade and other
receivables (10) 1,127
(Decrease) / increase in trade and other
payables 150 (125)
--------- ---------
Cash generated from operations (12,364) (22,639)
========= =========
2. CASH AND CASH EQUIVALENTS
The amounts disclosed on the Statements of Cash Flows in respect
of cash and cash equivalents are in respect of these Statement of
Financial Position amounts:
Group Company
31.12.19 1.1.19 31.12.19 1.1.19
EUR'000 EUR'000 EUR'000 EUR'000
Year ended 31 December
2019
Cash and cash equivalents 2,460 6,787 1,670 4,848
========= ======== ========= ========
31.12.18 1.1.18 31.12.18 1.1.18
EUR'000 EUR'000 EUR'000 EUR'000
Year ended 31 December
2018
Cash and cash equivalents 6,787 503 4,848 214
========= ======== ========= ========
W RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2019
2. SEGMENTAL INFORMATION
2018
Mineral
By Business Segment: Corporate Exploration Total
EUR'000 EUR'000 EUR'000
Revenue - 219 219
Gain / (loss)
for the year (3,499) (1,017) (4,516)
---------- ------------ ---------
Balance Sheet - Segment Assets 8,492 50,214 58,706
- Segment Liabilities (33,876) (5,724) (39,600)
---------- ------------ ---------
Net Assets (25,384) 44,490 19,106
========== ============ =========
By Geographical Iberia UK Total
Sector
EUR'000 EUR'000 EUR'000
Revenue 219 - 219
Gain / (loss)
for the year (1,017) (3,499) (4,516)
---------- ------------ ---------
Balance Sheet - Segment Assets 50,214 8,492 58,706
- Segment Liabilities (5,724) (33,876) (39,600)
---------- ------------ ---------
Net Assets 44,490 (25,384) 19,106
========== ============ =========
2019
Mineral
By Business Segment: Corporate Exploration Total
EUR'000 EUR'000 EUR'000
Revenue - 365 365
Gain / (loss)
for the year (2,009) (933) (2,942)
---------- ------------ ---------
Balance Sheet - Segment Assets 4,881 66,559 71,440
- Segment Liabilities (44,959) (7,392) (52,351)
---------- ------------ ---------
Net Assets (40,078) 59,167 19,089
========== ============ =========
By Geographical Iberia UK Total
Sector
EUR'000 EUR'000 EUR'000
Revenue 365 - 365
Gain / (loss)
for the year (933) (2,009) (2,942)
---------- ------------ ---------
Balance Sheet - Segment Assets 66,559 4,881 71,440
- Segment Liabilities (7,392) (44,959) (52,351)
---------- ------------ ---------
Net Assets 59,167 (40,078) 19,089
========== ============ =========
W RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2019
4. NET FINANCE COSTS
2019 2018
Finance costs: EUR'000 EUR'000
Other finance costs 146 109
Amortisation of loan costs 1,054 973
-------- --------
1,200 1,082
======== ========
5. LOSS BEFORE INCOME TAX
The loss before income tax is stated after charging /
(crediting):
2019 2018
EUR'000 EUR'000
Cost of inventories recognised as expense 343 219
Depreciation - owned assets 218 190
Exploration & evaluation costs amortisation 61 62
Auditors' remuneration 33 28
Auditors' remuneration for non-audit work - 4
Foreign exchange differences 495 2,422
Exceptional items - 148
Impairment charge - 317
======== ========
A total of EUR304,000 (2018: EUR303,000) relating to Michael
Masterman's consultancy fees were capitalised in intangible assets
in 2019.
An exceptional loss of EUR(165,000) in 2016 related to a review
by HMRC of the Company's VAT position resulting in the suspension
of the Company's VAT registration number and a deemed
irrecoverability of VAT, which was provided for in the financial
statements. The Company disputed HMRC's decision and the review was
concluded during the last financial year.
It was concluded at tribunal that the Company's VAT registration
be reinstated, and that VAT may be claimed from 1 July 2014
onwards. During the current year and in previous years no VAT was
reclaimed and expenditure in 2017 and 2018 is shown gross of VAT.
In 2018 however, an adjustment has been made to reverse the
provision made in 2016 and to adjust the Statement of profit and
loss for all unclaimed VAT. The reduction is shown as an
exceptional gain in 2018, and totals EUR165,000.
The impairment charge of EUR353,000 in 2018 relates only to the
Monforte-Tinoca copper exploration area. The assay results did not
demonstrate a regular distribution of significant mineralisation or
grade, nor any potential extension of the ore body, to justify a
positive future financial return. Given these results, the Company
decided not to extend nor renew the exploration license. The area
was discontinued effective from 6 November 2018, resulting in this
impairment charge and equal to the capitalised exploration
expenditure incurred from the date it was awarded until 31 December
2018.
6. INCOME TAX
2019 2018
EUR'000 EUR'000
Current tax:
Tax - (76)
-------- --------
Total tax (income) / expense in consolidated
statement of profit or loss and other comprehensive
income - (76)
======== ========
W RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2019
6. INCOME TAX continued
Factors affecting the tax expense
The tax assessed for the year is higher than the standard rate
of corporation tax in the UK. The difference is explained
below:
2019 2018
EUR'000 EUR'000
Loss before income tax
(2,942) (872)
======== ========
Loss multiplied by the standard rate of corporation
tax in
the UK of 19% (2018 - 19%) (559) (872)
Effects of:
Share options cost disallowed - (22)
Share warrants cost disallowed - (50)
Benefit of losses brought forward (4,976) (4,108)
Benefit of losses carried forward 5,535 4,976
-------- --------
Tax income - (76)
======== ========
8. LOSS PER SHARE
Basic loss per share is calculated by dividing the loss
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
Diluted loss per share is calculated using the weighted average
number of shares adjusted to assume the conversion of all dilutive
potential ordinary shares. The share options issued during 2016,
2018 and 2019 are considered to be anti-dilutive in accordance with
IAS 33 as on conversion they would decrease loss per share from
continuing operations.
Reconciliations are set out below 2019
Weighted
Average
Number Per Share
Loss of Shares Amount
EUR'000 (millions) Cents
Basic loss per share
Loss attributable to ordinary shareholders (2,942) 6,018 -0.05
Effect of dilutive securities - - -
-------- ----------- ----------
Diluted loss per share
Adjusted loss (2,942) 6,018 -0.05
======== =========== ==========
2018
Weighted
Average
Number Per Share
Loss of Shares Amount
EUR'000 (millions) Cents
Basic loss per share
Loss attributable to ordinary shareholders (4,516) 5,423 -0.08
Effect of dilutive securities - - -
-------- ----------- ----------
Diluted loss per share
Adjusted loss (4,516) 5,423 -0.08
======== =========== ==========
W RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2019
9. INTANGIBLE ASSETS
Exploration
Group & Evaluation
Costs
COST EUR'000
At 1 January 2019 27,282
Additions 10,567
Reclassification / transfer (5,233)
-------------
At 31 December 2019 32,616
-------------
AMORTISATION
At 1 January 2019 673
Amortisation for year 61
At 31 December 2019 734
-------------
NET BOOK VALUE
At 31 December 2019 31,882
=============
Intangible asset additions includes a reduction of EUR470,000 in
relation to an invoice issued to Arypex SL, from whom the Group
acquired the rights to the mining concessions in Spain, to recover
expenses incurred by the Group to correct certain environmental
damages which originated prior to the date that the Group signed
the original lease (with option to purchase agreement) with Arypex
SL, in 2009.
Exploration
Group & Evaluation
Costs
COST EUR'000
At 1 January 2018 15,438
Additions 11,683
Reclassification / transfer 161
-------------
At 31 December 2018 27,282
-------------
AMORTISATION
At 1 January 2018 255
Amortisation for year 62
Impairments 353
Exchange differences 3
-------------
At 31 December 2018 673
-------------
NET BOOK VALUE
At 31 December 2018 26,609
=============
The above represents capitalised testing works and concessions
costs acquired.
W RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2019
10. PROPERTY, PLANT AND EQUIPMENT
Group Plant &
Machinery
COST EUR'000
At 1 January 2019 19,355
Additions 6,537
Reclassification / transfer 5,233
----------
At 31 December 2019 31,125
----------
DEPRECIATION
At 1 January 2019 804
Charge for year 218
At 31 December 2019 1,022
----------
NET BOOK VALUE
At 31 December 2019 30,103
==========
Group Plant &
Machinery
COST EUR'000
At 1 January 2018 3,063
Additions 16,259
Exchange differences 33
----------
At 31 December 2018 19,355
----------
DEPRECIATION
At 1 January 2018 607
Charge for year 190
Exchange differences 7
----------
At 31 December 2018 804
----------
NET BOOK VALUE
At 31 December 2018 18,551
==========
At 31 December 2019, the following non-current assets, which
were additions during the construction phase of La Parrilla mine,
during 2018 and its completion in 2019, were reclassified from
intangible non-current assets to tangible non-current assets to
better reflect their physical nature or direct attribution to the
construction cost of the new plants:
Cumulative balance further to reclassification Reclassification
2019 2018
EURuro EURuro
Civils & earthworks 2,422,940 1,159,374
Tailings dam walls 660,859 412,635
Transformation centre 2,566,671 1,618,238
Project management fees 1,498,885 1,200,957
Engineering fees 849,277 841,787
------------- -----------------
Total 7,998,632 5,232,990
------------- -----------------
W RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2019
11. INVESTMENTS
Company Shares in
Group
Undertakings
COST EUR'000
At 1 January 2019 1,695
Additions 5,000
-------------
and 31 December 2019 6,695
-------------
NET BOOK VALUE
At 31 December 2019 6,695
=============
At 31 December 2018 1,695
=============
Company Shares in
Group
Undertakings
COST EUR'000
At 1 January 2018
-------------
and 31 December 2018 1,695
-------------
NET BOOK VALUE
At 31 December 2018 1,695
=============
Company
During the year the company converted EUR5m of its intercompany
loan with Iberian Resources Spain SL into equity in Iberian
Resources Spain SL.
The group or the company's investments at the Statement of
Financial Position date in the share capital of companies include
the following:
Direct Subsidiaries
Iberian Resources Spain SL
Registered office: Finca La Parrilla, 10132 Almoharin Cáceres,
Spain
Nature of business: Tungsten mining, production, exploration
%
Class of shares: Holding
Ordinary 100.00
2019 2018
EUR'000 EUR'000
Aggregate capital and reserves (6,258) (4,145)
======== ========
Copper Gold Resources Plc (Group)
Registered office: 27/28 Eastcastle Street, London W1W 8DH
Nature of business: Tungsten mining exploration, development
%
Class of shares: Holding
Ordinary 100.00
2019 2018
EUR'000 EUR'000
Aggregate capital and reserves (367) (235)
======== ========
W RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2019
11. INVESTMENTS - continued
Indirect subsidiaries
Iberian Resources Portugal LDA
Registered office: Lugar das Mozes, 5110-159 Armamar,
Portugal
Nature of business: Mineral Exploration
%
Class of shares: Holding
Copper Gold Resources Plc owns 100.00
2019 2018
EUR'000 EUR'000
Aggregate capital and reserves (431) (312)
======== ========
12. INVENTORIES
Group
2019 2018
EUR'000 EUR'000
Concentrate for re-sale 415 179
======== ========
13. TRADE AND OTHER RECEIVABLES
Group Company
2019 2018 2019 2018
EUR'000 EUR'000 EUR'000 EUR'000
Current:
Trade receivables 36 - - -
Other receivables 905 1,037 61 58
Other prepayments 1,929 1,203 36 31
Finance cost prepayments 1,203 1,063 1,009 871
>1 year:
Amounts owed by group undertakings - - 59,977 48,071
Finance cost prepayments 2,507 3,277 2,102 2,686
-------- -------- -------- --------
6,580 6,580 63,185 51,717
======== ======== ======== ========
14. CASH AND CASH EQUIVALENTS
Group Company
2019 2018 2019 2018
EUR'000 EUR'000 EUR'000 EUR'000
Bank accounts 2,460 6,787 1,670 4,848
======== ======== ======== ========
15. CALLED UP SHARE CAPITAL
Allotted and issued: Nominal 2019 2018
Number Class Value GBP'000 GBP'000
6,378,427,640
(2018: 5,784,197,054) Ordinary 0.1p 7,134 6,448
======== ======== ========
W RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2019
15. CALLED UP SHARE CAPITAL - continued
594,230,586 Ordinary Shares of 0.1p were issued during the year
for cash as follows:
- On 5 February 2019, 9,183,673 Ordinary Shares of 0.1p each
were issued at a premium of 0.39p raising EUR51,043.
- On 18 April 2019, 201,571,429 Ordinary Shares of 0.1p each
were issued at a premium of 0.32p raising GBP846,600 (EUR979,855).
This was in part the exercise of 200,000,000 share warrants issued
last year.
- On 22 May 2019, 35,714,284 Ordinary Shares of 0.1p each were
issued at a premium of 0.32p raising GBP150,000 (EUR170,145). This
was the exercise of 35,714,284 share warrants issued last year.
- On 16 September 2019, 185,511,200 Ordinary Shares of 0.1p each
were issued at a premium of 0.40p raising GBP927,556
(EUR1,052,962)
- On 15 November 2019, 72,250,000 Ordinary Shares of 0.1p each
were issued at a premium of 0.30p raising GBP289,000
(EUR337,350)
- On 29 November 2019, 90,000,000 Ordinary Shares of 0.1p each
were issued at a premium of 0.30p raising GBP360,000
(EUR422,280)
At the year-end there were 779,033,998 Share Warrants in issue
that were yet to be exercised. (2018: 554,034,000).
16. RESERVES
Share
Group Based
Retained Share Payment
Earnings Premium Reserve
EUR'000 EUR'000 EUR'000
At 1 January 2019 (21,294) 34,418 1,622
Deficit for the year (2,942) - -
Cash share issue - 2,329 -
Cost of share issue - (89) -
Transfer of reserves (3,791) - -
--------- -------- --------
At 31 December 2019 (28,027) 36,658 1,622
========= ======== ========
Group Merger Translation
Reserve Reserve Totals
EUR'000 EUR'000 EUR'000
At 1 January 2019 1,014 (3,791) 11,969
Deficit for the year - - (2,942)
Cash share issue - - 2,329
Cost of share issue - - (89)
Transfer of reserves - 3,791 -
-------- ------------ --------
At 31 December 2019 1,014 - 11,267
======== ============ ========
W RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
16. RESERVES - continued
Share
Company Based
Retained Share Payment
Earnings Premium Reserve
EUR'000 EUR'000 EUR'000
At 1 January 2019 (14,207) 34,418 1,622
Deficit for the year (696) - -
Cash share issue - 2,329 -
Cost of share issue - (89) -
Share options issued (5,683) - -
--------- -------- --------
At 31 December 2019 (20,586) 36,658 1,622
========= ======== ========
Company Merger Translation
Reserve Reserve Totals
EUR'000 EUR'000 EUR'000
At 1 January 2019 1,014 (5,683) 17,164
Deficit for the year - - (696)
Cash share issue - - 2,329
Cost of share issue - - (89)
Transfer of reserves - 5,683 -
-------- ------------ --------
At 31 December 2019 1,014 - 18,708
======== ============ ========
17. TRADE AND OTHER PAYABLES
Group Company
2019 2018 2019 2018
EUR'000 EUR'000 EUR'000 EUR'000
Current:
Trade creditors 3,500 5,782 198 63
Amounts owed to group undertakings - - 75 81
Other creditors 2 1 2 1
Accrued expenses 86 71 82 68
Directors' current accounts 390 - 390 -
-------- -------- -------- --------
3,978 5,854 747 213
======== ======== ======== ========
18. FINANCIAL LIABILITIES - BORROWINGS
On 14 February 2018, W Resources signed a Credit and Guaranty
Agreement with BlackRock Financial Management Inc. to provide a
US$35 million secured term loan facility to the Company to fund the
La Parrilla mine development. The first US$13.125 million was drawn
in February 2018 and the balance of US$21.875 million was funded in
May 2018.
The key terms of the Credit and Guaranty Agreement with
BlackRock Financial Management Inc. are as follows:
- The Loan is for a scheduled term of five years, with a
two-year non-call period. The Company has the right to repay the
Loan after two years for a premium of 5%, after three years for a
premium of 3%, and after four years for no premium; the Loan is
secured over the value of the Group's intangible and tangible
assets in Spain and in Portugal as well as the stream of future
revenues expected from off take agreements.
- Subject to any early repayment permitted or required under the
Agreement, repayment will be made by way of a cash flow sweep,
utilising free cash to repay the loan; it is not expected that cash
will be available within the initial two-year period and therefore
the full amount of the loan has been recognised as payable between
2-5 years.
W RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
18. FINANCIAL LIABILITIES - BORROWINGS - continued
- The Loan is subject to an average 5-year interest rate of
12.6%, being 14% in the first year, 13% in the second year and 12%
thereafter.
- First year interest is added to the value of the principal,
while 50% of the second-year interest is added to the value of the
principal and 50% is payable in cash; from the third year onwards,
interest will be fully payable in cash on quarterly anniversaries
of the loan agreement.
- Lenders received a non-refundable upfront fee of 3% of the
face value of each of the respective Loan disbursements.
- Lenders received warrants totalling 5% of W Resources Plc
fully diluted equity. These have been valued at 5% of the total
loan value EUR1,440,000 (note 21).
On 18 December 2019, BlackRock Financial Management Inc. agreed
to increase the existing loan facility provided to W Resources by
US$5 million, with no warrants attached.
During the year interest of EUR5,257,259 (2018: EUR3,141,667)
was incurred on the Loan. This was added to the loan capital during
the year and recharged by W Resources PLC to its subsidiary Iberian
Resources Spain SL where it was capitalised in Intangible and in
Tangible assets in proportion to the expenditure on each of these
categories during the year, and in accordance with the Groups
accounting policy for loan interest.
The value of the BlackRock Financial Management Inc. loan
included in the statement of financial position at the balance
sheet date is US$49,458,659 (EUR44,273,000) (2018:
EUR33,746,000).
On 7 May 2019, a loan of EUR3,000,000 was advanced by Spanish
bank, Caja Rural de Extremadura to Iberian Resources Spain S.L.
with a term of 15 months and an interest rate of 1.75% p.a. The
Caja Rural de Extremadura bank has a lien over the grant to
receivable from the Junta de Extremadura of EUR5.3 million. The
value of this loan included in the statement of financial position
at the balance sheet date is EUR3,000,000 (2018: NIL).
On 18 June 2019, an overdraft facility of EUR300,000 was
provided by Banco Bilbao Vizcaya to Iberian Resources Spain S.L.
with a term of 12 months and an interest rate of 2.65% p.a. A 29%
APR will apply if not repaid by 18 June 2020. The value of this
overdraft included in the statement of financial position at the
balance sheet date is EUR299,700 (2018: NIL).
On 15 October 2019, the Banco Bilbao Vizcaya provided and
advance on VAT receivables of EUR50,000 to Iberian Resources Spain
S.L. with a term of 12 months and an Interest rate of 2.3% p.a. The
value of this VAT advance included in the statement of financial
position at the balance sheet date is EUR50,000 (2018: NIL).
On 15 October 2019, Iberian Resources Spain S. L. signed a
reverse factoring agreement with the Banco Bilbao Vizcaya, for up
to EUR200,000 with an interest rate 2.75% p.a. The value of this
credit facility included in the statement of financial position at
the balance sheet date is EUR199,833 (2018: NIL).
On 3 December 2019, Iberian Resources Spain S. L. signed a
revolving credit facility of EUR500,000 with CaixaBank with a term
6 months and an interest rate of 2.5% p.a.. The value of this
credit facility included in the statement of financial position at
the balance sheet date is EUR500,000 (2018: NIL).
Subsequent to 31 December 2019, on 31 January 2020 Iberian
Resources Spain S. L. signed a loan agreement for EUR5,000,000 with
Banco Santander, S.A ("Santander") which repaid the EUR3,000,000
loan from the Caja Rural de Extremadura. The facility interest rate
is 3% per annum, payable quarterly, with no amortisation and is
secured by a pledge over the rights to the Grant funds. The term of
the loan is the earlier of 12 months or the receipt of the proceeds
of the Grant funds.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR WPUBUAUPUGQG
(END) Dow Jones Newswires
June 01, 2020 02:35 ET (06:35 GMT)
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