TIDMWRES
RNS Number : 8126A
W Resources PLC
04 June 2021
4 June 2020
W Resources Plc
("W" or the "Company")
Final Results for the Year Ended 31 December 2020
Annual Report and Accounts and Notice of Annual General
Meeting
The Company is today posting a copy of the report and accounts
to shareholders along with a notice of Annual General Meeting
("AGM") which will take place at at 11:00am on Wednesday, 30 June
2021 at 27/28 Eastcastle St, London W1W 8DH.
A copy of the report and accounts, the notice of meeting and
proxy form can also be found on the Company's website,
www.wresources.com .
The Board continues to closely monitor the coronavirus pandemic
and the Company's priority at this time remains the health, safety
and wellbeing of all of its stakeholders. As part of its
monitoring, the Board has noted, in particular, the gradual easing
of public health restrictions across England in line with the
government's "COVID-19 Response - Spring 2021" roadmap. Based on
that roadmap and associated guidance, it is currently anticipated
as at the date of this Notice that attendance in person at the
meeting will not be unlawful. It is therefore intended that
sufficient of the Directors to form a quorum will be present in
person at the AGM, observing relevant social distancing guidelines
in place on the date of the meeting. However, given ongoing safety
and public health considerations, you are strongly encouraged not
to attend the meeting in person.
Instead of attending the meeting in person, Shareholders are
strongly encouraged to appoint the Chair of the meeting as their
proxy and to give instructions on how they wish the Chair to vote
on the proposed resolutions. Any shareholder who nonetheless wishes
to attend the AGM in person must register in advance by email to
info@wresources.com and will be expected to adhere to any special
arrangements and safety measures which the Company may put in place
on the day and, according to safety and public health
considerations and meeting venue restrictions it may not be
possible for any shareholders to attend the meeting. All proposed
resolutions at the AGM will be put to a vote on a poll.
The current situation is evolving and the Company will make any
further announcements that may be required by way of a Regulatory
News Service and on the Company's website.
The information contained 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.
Final Results for the Year Ended 31 December 2020
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 2020.
HIGHLIGHTS
La Parrilla, Tungsten and Tin, Spain
-- The Plant Improvement Plan continues to improve the dynamics at the mine.
-- Production in H2 was significantly greater than H1 on an actual and a pro-rata basis.
-- Plant availability increased to over 90% as the year progressed.
-- Recovery rates improved significantly throughout the year.
-- Tungsten feed grade continued to rise quarter on quarter.
-- Demand for tungsten and tin concentrate continues to grow
with customers committed to acquiring all current production.
-- Despite the COVID-19 pandemic, the management team and staff
at the mine were able to work safely and with minimum
disruption.
-- The Company was delighted to receive the continued support
from BlackRock with an additional US$7m loan to support the
continued development of La Parrilla and increase working
capital.
Chairman of W, Michael Masterman commented: "Whilst 2020 was a
very challenging year for W, progress was made and there was a
clear improvement in H2 with greater plant availability and an
increase in recoveries which lead to an increase in production.
Benefits of the Plant Improvement Programme are being demonstrated
throughout the mine at La Parrilla and are set to continue to
improve.
As we look ahead, the management team's clear priority is to
increase production at La Parrilla as we move to a 24/7 operation
in order to increase production towards the stated target of our T2
production target, whilst safeguarding our staff and
contractors.
Commodity prices remain robust with European ammonium
paratungstate ("APT") pricing remaining strong at US$270-US$280 /
mtu and the tin price continuing to strengthen, reaching US$31,000
per tonne.
"We appreciate the continued support of shareholders and are
fully committed to reaching our production targets at La Parrilla,
which will then transform the business to a profitable mining
company with positive cashflow and deliver a turnaround in
shareholder value."
Enquiries:
W Resources Plc Grant Thornton UK LLP
Paul Hailes, CFO 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 / 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
W RESOURCES PLC
CHAIRMAN'S STATEMENT
FOR THE YEARED 31 DECEMBER 2020
2020 was a turbulent year, presenting W Resources ("W" or "the
Company") with many challenges from responding to the global
pandemic with a business continuity plan to significant plant
challenges at the La Parrilla tungsten and tin mine in Spain. The
team has overcome many of these challenges and we are confident
that W is now on track to deliver growth for our shareholders in
the year ahead.
Notwithstanding the challenges faced in 2020, we are resolute in
exploiting the opportunity at the La Parrilla mine, with its
large-scale production capacity and low-cost structure which we are
now more confident than ever will form the basis of our cash
generation and expansion in the year ahead.
There is no denying that building a mine of this scale comes
with its challenges and whilst we have hit significant hurdles, the
team continues to work tirelessly to achieve the best outcome and
deliver on our objective of building a world class tungsten mining
company.
The Company's strong safety performance continued in 2020 with a
total recordable lost time injury frequency rate ("LTIFR") of 16.1
injuries per million hours worked, which is well below the Spanish
mining industry average of 46.7. The health and safety of all our
employees, contractors and customers remains an absolute priority
and we are working hard to ensure we implement all measures
necessary to maintain our safety record in the current COVID-19
pandemic.
TUNGSTEN & TIN
La Parrilla - Spain
Overview
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 target of the ramp-up remains to reach the target to
mine 2mtpa ("million tonnes per annum") of ROM and produce
approximately 2,700 tonnes ("t") of tungsten concentrate and 200t
of tin ("Sn") concentrate per annum ("T2").
Operations
Whilst production at La Parrilla started to build in the first
half of the year, we faced early-stage plant challenges which were
compounded by the restrictive conditions of the COVID-19 State of
Emergency. These resulted in mine and plant closure and operational
limitations on equipment sourcing as well as an increased focus on
the day-to-day management of the health & safety of all
personnel, which continues to remain a high priority.
Clearly production levels throughout 2020 were not at the level
we or our stakeholders expected them to be. The rigorous plant
improvement programme, implemented to mitigate against the
challenges the plant was experiencing, took longer than we had
originally anticipated, however this was completed in Q1 2021 and
the Company now looks forward to reaping the benefits of this
detailed process.
In the first nine months , recoveries of tungsten and tin
continued to improve following a realignment of the mine plan
around the high recovery ore in the main fast track mining area and
in the pit in general. In Q4, additional improvements were required
to the plant as recovery rates slowed, however this has now been
resolved. Additional work is required prior to reaching the T2
target.
2020 La Parrilla Production Summary
Q1 2020 Q2 2020 Q3 2020 Q4 2020
ROM feed: tonnes mined
(wmt) 273,656 253,256 171,454 261,841
============================= ========= ========= =========== ===========
Strip ratio 1.07 0.58 1.38 1.19
============================= ========= ========= =========== ===========
Jig plant: tonnes processed
(dmt) 240,926 228,060 148,417 236,677
============================= ========= ========= =========== ===========
WO(3) feed grade (ppm) 800 845 857 943
============================= ========= ========= =========== ===========
WO(3) recovery (%) 17% 16% 30% 31%
============================= ========= ========= =========== ===========
WO(3) concentrate (dmt) 58.9 47.6 54.7 100.0
============================= ========= ========= =========== ===========
WO(3) concentrate grade
(%) 56.1 57.4 69.8 67.0
============================= ========= ========= =========== ===========
WO(3) contained metal
(mtu) 3,306 2,756 3,820 6,698
============================= ========= ========= =========== ===========
Sn feed grade (ppm) 282 307 181 321
============================= ========= ========= =========== ===========
Sn recovery (%) 22% 25% 37% 26%
============================= ========= ========= =========== ===========
Sn concentrate (dmt) 23.3 41.2 22.9 33.4
============================= ========= ========= =========== ===========
Sn concentrate grade
(%) 51.9 48.5 42.7 56.3
============================= ========= ========= =========== ===========
Sn contained metal (dmt) 12.1 20.0 9.8 18.8
============================= ========= ========= =========== ===========
Total concentrate (dmt) 82.2 88.8 77.6 133.4
============================= ========= ========= =========== ===========
Total contained metal
(dmt) 45.2 47.6 48.0 85.8
----------------------------- --------- --------- ----------- -----------
* Each quarter was based on the following 24h working days per
week:
- Q1 2020 on 7 days per week
- Q2 2020 on 7 days per week
- Q3 2020 on 3 days per week
- Q4 2020 on 4 days per week
Tungsten and Tin sales in a challenging global environment
W shipped 251.3t of tungsten concentrate and 105.0t tin
concentrate for the 12 months to December 2020, with offtake
partners committed to all of T2 production.
Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
====================== ======== ======== ======== ======== ========
Tungsten concentrate
(t) 30.1 58.9 62.1 100.2 59.2
Tin concentrate (t) 20.2 20.6 38.1 26.1 20.0
====================== ======== ======== ======== ======== ========
PORTUGUESE PROJECTS
Status of Portuguese Mining and Exploration Licences
Unfortunately, granting of all new licences and extensions has
been delayed due to changes that have to be made to Portuguese
mining law combined with the challenges Portugal endured in 2020
with the COVID-19 crisis and associated state of emergency.
Management is, however, confident that, given the encouraging
exploration results, and given that no other company has applied
for the permits in these areas, combined with strong support from
respective local authorities, these licences will be granted. The
Company has received assurances to this effect.
Régua Tungsten Mine
Overview
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.
Régua has significant synergies with La Parrilla as it has
materially lower capital costs and will increase La Parrilla's
final concentrate production.
Development Strategy
Régua was W's second mine to come on stream. Mining operations
commenced in early February 2020, targeting the first of two adits
with skarn ore zones intersected in the initial development.
Engineering and procurement for the construction of the plant are
also at an advanced stage.
Unfortunately, Portuguese COVID-19 related restrictions resulted
in the halting of mining activities which we were not able to
recommence prior to the expiry of the trial mine licence on 20
September 2020. Management submitted an application to the
Portuguese mining authorities for the full mining licence on 16
June 2020. Mining and plant construction will recommence once the
full licence has been granted. In the meanwhile, environmental work
continues.
Tarouca Exploration
Although this licence expired on 23 March 2019, the Company
presented a request for a new exploration licence before it
expired, on 5 February 2019, to protect the Company's right to the
area. 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
Overview
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.
Development Strategy
We initially advanced São Martinho through a successful drilling
programme and we are still waiting for approval of our application
for a trial mine and gold production licence submitted in September
2018. We expect the trial mine licence to be granted in due course,
however we have no guidance on a timeframe at this point in
time.
Once granted, there is an opportunity 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.
This is particularly important as 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 continue to explore opportunities to bring in Joint Venture
or Farm-In partners parties to monetise the gold discovery.
Finance
During the year the management team has worked diligently to
ensure sufficient funds were available to both fund the development
of the La Parrilla mine and provide significant working capital.
This is evidenced by:
In February 2020, W finalised a EUR5m facility with the Spanish
bank, Banco Santander, S.A ("Santander") which repaid the EUR3m
loan from Caja Rural de Extremadura ("Caja Rural") and provided a
net EUR2m of additional working capital and liquidity. The loan was
repaid following receipt of EUR5.2m proceeds of the Grant Funds in
May 2021.
This was followed in March 2020 by a Placing to raise GBP0.76m
to new Spanish investors, to advance Régua and provide additional
support for working capital.
In parallel, the Spanish government, as part of the State of
Emergency, announced it is set to provide guarantees of up to 90%
of funds to back companies affected by the pandemic. Subsequently,
in July 2020, W signed a series of new Spanish government
guaranteed loan facilities with Spanish banks. Under the COVID-19
state of emergency, the Spanish state-owned bank (attached to the
Ministry of Economy and Business), the Instituto de Crédito Oficial
("ICO"), provided loan guarantees of up to 80% of loan value to
Spanish banks providing loans to Spanish companies, which are also
referred to as ICOs. EUR1.82m of such facilities at annual interest
rates of 2-3% pa was secured with four major banks: CaixaBank, S.A,
Bankinter, S.A, Banco Bilbao Vizcaya Argentaria, S.A ("BBVA") and
the Caja Rural de Extremadura. These facilities refinance and
extend the maturity of some existing lines, providing a net
EUR1.02m of additional working capital
funding. All loan agreements and extensions are to the Company's
100% owned subsidiary, Iberian Resources Spain
In March 2020, W secured a GBP4.0m convertible bond facility
from Atlas Capital Markets ("Atlas") comprising a convertible bond
with a coupon of 5% and a term of 3 years. The facility can be
drawn in tranches of up to GBP500,000 at the election of W, with an
agreed period between subsequent drawdowns. The facility is
unsecured and subordinated to the BlackRock Financial Management
Inc. ("BlackRock") loan facility with BlackRock consent required
for a draw. Atlas can convert the bond to W shares by issuing a
conversion notice with the price set at 95% of the selected 3-day
VWAP in the 15 days leading up to issue of a conversion notice by
Atlas. Warrants will be issued with each tranche on a pro rata
basis, with 5,555,555 Warrants issued at a subscription price of
0.36 pence per Ordinary Share per GBP100,000 principal amount of
Convertible Bonds that are issued. The Warrants have a 3 year
expiry term.
In August 2020, W drew down its first GBP500,000 tranche from
the GBP4m Atlas convertible bond facility and this was the only
draw down of its kind for the year. 27,777,775 warrants with a 3
year expiry term were also issued to Atlas as part of the
drawdown.
In October 2020, BlackRock Financial Management Inc. agreed to
increase W's existing loan facility by an additional US$7
million.
BlackRock continues to show its support for W with regard to
agreeing Payment in Kind ("PIK") payments for several quarterly
interest payments. The Company had entered into a Credit Facility
with one or more funds managed by BlackRock to provide a secured
term loan to the Company to fund the La Parrilla mine development
(the "Loan Facility"). The Company and BlackRock finalised and
executed an amendment agreement to allow payment of interest by PIK
for the May, August and the November 2020 interest payments and the
Company announced an extension to the facility of US$7 million on 8
October 2020.
Tungsten and Tin
The European APT price traded under pressure for most of 2020
with most end users out of the spot market due to persistently weak
demand for tungsten products, while limited volumes of material
were being shipped out of China (source: Fastmarkets MB). Tungsten
prices during the first half 2021 have been supported by tightening
supply and healthy end-user demand and prices currently sit around
US$270-278 per mtu, which is in line with budget expectations.
Tin prices on the London Metal Exchange started 2020 trading at
US$17,125 per metric ton and following a short lived downturn when
COVID-19 took over news headlines the price steadily rose and
closed the year at US$20,540 per metric ton. 2021 has seen an
extremely tight worldwide supply of tin, resulting in a cash price
near 10-year highs, surpassing US$30,000 per metric ton on several
occasions (source: Fastmarkets MB).
Board and Management Update
In March 2020, we announced that Dr Byron Pirola retired from
the Board after 12 years as a Director, due to increasing business
demands on his time.
In November 2020, Pablo Neira was appointed Executive Director,
following two years as a Non-Executive Director of the Company.
In addition, as part of the strengthening of the W Resources
management team, Paul Hailes was appointed Chief Financial Officer,
a non-board appointment, working on a part-time basis. Paul brings
extensive capital markets, financial and commercial experience to
the team, having previously held the role of Group Finance Director
of AIM quoted Immunodiagnostic Systems plc and Non-Executive
Director at Utilitywise plc.
Outlook
2020 was a very difficult year for the Company and the world at
large with the Covid-19 pandemic, however, as we continue to
prioritise our efforts at the La Parrilla mine steps taken last
year should begin to feed through in H2 2021 as we:
-- Look to permanently solve our water issue and re-access our higher-grade ore bodies
-- Produce between 880t and 1,000t of concentrate for the twelve
months ending 31 December 2021
-- Move production at La Parrilla mine back to a 24/7 basis and
get close to a T2 run-rate in Q4 2021
-- At our earliest opportunity, re-commence mining activities at
our tungsten mine in Régua, Portugal
-- Move to an initial breakeven period and then migrate to a
profit generating company as we see positive operational cashflow
and a turnaround in shareholder value.
The management team with the strong support of the board
continue to progress the Company's plan of reaching T2
as well as keeping its staff and contractors safe and well in these troubling times.
_________________
Michael Masterman
Chairman
W Resources Plc
W RESOURCES PLC
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEARED 31 DECEMBER 2020
2020 2019
CONTINUING OPERATIONS Notes EUR'000 EUR'000
Revenue 2 2,513 365
Cost of sales (2,513) (343)
GROSS PROFIT - 22
Operating expenses (845) (498)
Administrative expenses (1,604) (768)
Impairment of intangible assets 9 (2,257) -
Impairment of tangible assets 10 (1,276) -
OPERATING LOSS ( 5,982) (1,244)
Exchange gains / (losses) 4,267 (498)
Finance costs 4 (1,767) (1,200)
--------- --------
LOSS BEFORE INCOME TAX 5 (3,482) (2,942)
Income tax 6 - -
--------- --------
LOSS FOR THE YEAR (3,482) (2,942)
OTHER COMPREHENSIVE INCOME
OTHER COMPREHENSIVE INCOME FOR THE YEAR,
NET OF INCOME TAX - -
--------- --------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR (3,482) (2,942)
========= ========
Loss attributable to:
Owners of the parent (3,482) (2,942)
========= ========
Total comprehensive income attributable
to:
Owners of the parent (3,482) (2,942)
========= ========
Loss per share expressed in pence per
share: 8
Basic -0.05 -0.05
Diluted -0.05 -0.05
W RESOURCES PLC (REGISTERED NUMBER: 04782584)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 DECEMBER 2020
ASSETS 2020 2019
NON-CURRENT ASSETS Notes EUR'000 EUR'000
Owned
Intangible assets 9 41,157 31,882
Property, plant and equipment 10 31,877 30,103
Investments 11 - -
--------- ---------
73,034 61,985
--------- ---------
CURRENT ASSETS
Inventories 12 1,174 415
Trade and other receivables 13 7,296 6,580
Cash and cash equivalents 14 956 2,460
--------- ---------
9,426 9,455
--------- ---------
TOTAL ASSETS 82,460 71,440
========= =========
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 15 8,820 7,822
Share premium 16 37,694 36,658
Share based payment reserve 16 2,003 1,622
Merger reserve 16 1,014 1,014
Retained earnings 16 (31,394) (28,027)
--------- ---------
TOTAL EQUITY 18,137 19,089
--------- ---------
LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities - borrowings
Interest bearing loans and borrowings 18 51,626 44,312
--------- ---------
CURRENT LIABILITIES
Trade and other payables 17 6,734 3,978
Financial liabilities - borrowings
Interest bearing loans and borrowings 18 5,963 4,061
--------- ---------
12,697 8,039
--------- ---------
TOTAL LIABILITIES 64,323 52,351
--------- ---------
TOTAL EQUITY AND LIABILITIES 82,460 71,440
========= =========
As permitted by Section 408 of the Companies Act 2006, the
income statement of the parent company is not presented as part of
these financial statements. The parent company's profit for the
financial year is disclosed in Note 7.
The financial statements were approved by the Board of Directors
and authorised for issue on 3 June 2021 and were signed on its
behalf by:
..........................................
Mr Michael Masterman
Chairman
W RESOURCES PLC (REGISTERED NUMBER: 04782584)
COMPANY STATEMENT OF FINANCIAL POSITION
31 DECEMBER 2020
ASSETS 2020 2019
NON-CURRENT ASSETS Notes EUR'000 EUR'000
Investments 11 6,695 6,695
--------- ---------
6,695 6,695
--------- ---------
CURRENT ASSETS
Trade and other receivables 13 77,020 63,185
Cash and cash equivalents 14 65 1,670
--------- ---------
77,085 64,855
--------- ---------
TOTAL ASSETS 83,780 71,550
========= =========
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 15 8,820 7,822
Share premium 16 37,694 36,658
Share based payment reserve 16 2,003 1,622
Merger reserve 16 1,014 1,014
Retained earnings 16 (16,570) (20,586)
--------- ---------
TOTAL EQUITY 32,961 26,530
--------- ---------
LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities - borrowings
Interest bearing loans and borrowings 18 49,781 44,273
--------- ---------
CURRENT LIABILITIES
Trade and other payables 17 704 747
Financial liabilities - borrowings
Interest bearing loans and borrowings 18 334 -
--------- ---------
1,038 747
--------- ---------
TOTAL LIABILITIES 50,819 45,020
--------- ---------
TOTAL EQUITY AND LIABILITIES 83,780 71,550
========= =========
The financial statements were approved by the Board of Directors
and authorised for issue on 3 June 2021 and were signed on its
behalf by:
..........................................
Mr Michael Masterman
Chairman
W RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2020
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
2019 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
Transfer between reserves - (3,791) - - - 3,791 -
-------- --------- -------- -------- -------- ------------ --------
Total transactions with
owners recognised directly
in equity 685 - 2,240 - - - 2,925
Balance at 31 December
2019 7,822 (28,027) 36,658 1,622 1,014 - 19,089
-------- --------- -------- -------- -------- ------------ --------
Changes in equity
Total comprehensive income - (3,482) - - - - (3,482)
Issue of share capital 998 - 1,036 - - - 2,034
Issue of share warrants
and options - - - 496 - - 496
Transfer between reserves - 115 - (115) - - -
-------- --------- -------- -------- -------- ------------ --------
Total transactions with
owners recognised directly
in equity 998 - 1,036 496 - - 2,530
-------- --------- -------- -------- -------- ------------ --------
Balance at 31 December
2020 8,820 (31,394) 37,694 2,003 1,014 - 18,137
======== ========= ======== ======== ======== ============ ========
W RESOURCES PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2020
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
2019 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)
Transfer between reserves - (5,683) - - - 5,683 -
-------- --------- -------- -------- -------- ------------ --------
Total transactions with
owners recognised directly
in equity 685 - 2,240 - - - 2,925
-------- --------- -------- -------- -------- ------------ --------
Balance at 31 December
2019 7,822 (20,586) 36,658 1,622 1,014 - 26,530
-------- --------- -------- -------- -------- ------------ --------
Changes in equity
Issue of share capital 998 - 1,036 - - - 2,034
Total comprehensive income - 3,092 - - - - 3,092
Issue of share warrants
and options - - - 496 - - 496
Transfer between reserves - 115 - (115) - - -
-------- --------- -------- -------- -------- ------------ --------
Total transactions with
owners recognised directly
in equity 998 - 1,036 496 - - 2,530
-------- --------- -------- -------- -------- ------------ --------
Balance at 31 December
2020 8,820 (16,569) 37,694 2,003 1,014 - 32,962
======== ========= ======== ======== ======== ============ ========
W RESOURCES PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2020
2020 2019
Cash flows from operating activities Notes EUR'000 EUR'000
Cash generated from operations 1 785 (4,592)
Interest paid (377) (146)
Finance costs paid (1,639) (426)
Net cash from operating activities (1,231) (5,164)
-------- ---------
Cash flows from investing activities
Purchase of intangible fixed assets (7,446) (7,343)
Purchase of tangible fixed assets (1,896) (4,235)
-------- ---------
Net cash from investing activities (9,342) (11,578)
-------- ---------
Cash flows from financing activities
New loans in year 10,639 9,050
Loan repayments in year (3,000) -
New hire purchases in year - 58
Payment of lease liabilities (11) (8)
Amount introduced by directors - 390
Amount withdrawn by directors (390) -
Share issue 379 685
Share issue premium 896 2,329
Share issue costs - (89)
New convertible bonds in the year 556 -
-------- ---------
Net cash from financing activities 9,069 12,415
-------- ---------
Decrease in cash and cash equivalents (1,504) (4,327)
Cash and cash equivalents at beginning
of year 2 2,460 6,787
-------- ---------
Cash and cash equivalents at end of year 2 956 2,460
======== =========
Material non-cash movements
During the year the company settled outstanding creditors of
EUR538,000 (2019: Nil) through the issue of ordinary shares. (note
15)
W RESOURCES PLC
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2020
2020 2019
Cash flows from operating activities Notes EUR'000 EUR'000
Cash generated from operations 1 (6,782) (12,364)
Interest paid (1) -
Finance costs paid (1,260) (426)
Net cash from operating activities (8,043) (12,790)
-------- ---------
Cash flows from investing activities
Interest received 1,518 1,297
Net cash from investing activities 1,518 1,297
-------- ---------
Cash flows from financing activities
New loans in year 3,479 5,000
New convertible bonds in the year 556 -
Amount introduced by directors - 390
Amount withdrawn by directors (390) -
Share issue 379 685
Share premium 896 2,329
Share issue costs - (89)
-------- ---------
Net cash from financing activities 4,920 8,315
-------- ---------
Decrease in cash and cash equivalents (1,605) (3,178)
Cash and cash equivalents at beginning
of year 2 1,670 4,848
-------- ---------
Cash and cash equivalents at end of year 2 65 1,670
======== =========
Material non-cash movements
During the year the company settled outstanding creditors of
EUR538,000 (2019: Nil) through the issue of ordinary shares. (note
15)
W RESOURCES PLC
NOTES TO THE STATEMENTS OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2020
1. RECONCILIATION OF PROFIT / (LOSS) BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS
2020 2019
Group EUR'000 EUR'000
Loss before income tax (3,482) (2,942)
Depreciation charges 307 280
Impairment of intangible assets 2,257
Impairment of tangible assets 1,276
Exchange gains on loans (4,305) -
Share based payments 538 -
Share warrants issued 494 -
Share options issued 2 -
Finance costs 1,767 1,200
(1,146) (1,462)
Increase in inventories (759) (236)
Increase in trade and other receivables (464) (628)
(Decrease) / increase in trade and other
payables 3,154 (2,266)
-------- ---------
Cash generated from operations 785 (4,592)
======== =========
2020 2019
Company EUR'000 EUR'000
Profit / (loss) before income tax 3,902 (696)
Exchange gains on loans (4,304) -
Increase in inter-group loans (7,448) (11,383)
Share warrants issued 494 -
Share options issued 2 -
Share based payments 538 -
Finance costs 1,173 872
Finance income (1,518) (1,297)
(7,161) (12,504)
(Increase) / decrease in trade and other
receivables 13 (10)
Increase in trade and other payables 366 150
-------- ---------
Cash generated from operations (6,782) (12,364)
======== =========
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 December 1 January 31 December 1 January
2020 2020 2020 2020
EUR'000 EUR'000 EUR'000 EUR'000
Year ended 31 December
2020
Cash and cash equivalents 956 2,460 65 1,670
============ ========== ============ ==========
31 December 1 January 31 December 1 January
2019 2019 2019 2019
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
============ ========== ============ ==========
Reconciliation of Net debt
Group At Jan 2020 Cash flows Non cash changes At 31 December 2020
Foreign exchange Interest Bonds converted
movement capitalised to equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Cash and Cash
equivalents
Cash 2,460 (1,504) - - - 956
Borrowings
Debt due within one
year (200) (5,975) 1 - 221 (5,953)
Debt due after 1
year (48,123) (2,231) 4,304 (5,547) - (51,597)
Hire Purchases (50) 11 (39)
------------ -------- ----------------- -------------------- ---------------- ---------
(48,373) (8,195) 4,305 (5,547) 221 (57,589)
------------ -------- ----------------- -------------------- ---------------- ---------
Total (45,913) (9,699) 4,305 (5,547) 221 (56,633)
------------ -------- ----------------- -------------------- ---------------- ---------
Company At Jan 2020 Cash flows Non cash changes At 31 December 2020
Foreign exchange Interest Bonds converted
movement capitalised to equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Cash and Cash
equivalents
Cash 1,670 (1,605) 65
Borrowings
Debt due within one
year - (556) 1 221 (334)
Debt due after 1
year (44,273) (3,479) 4,304 (6,333) (49,781)
------------ -------- ----------------- -------------------- ---------------- ---------
(44,273) (4,035) 4,305 (6,333) 221 (50,115)
------------ -------- ----------------- -------------------- ---------------- ---------
Total (42,603) (5,640) 4,305 (6,333) 221 (50,050)
------------ -------- ----------------- -------------------- ---------------- ---------
W RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2020
1. ACCOUNTING POLICIES
The accounting policies of the Company are set out in full in
the Annual Report and Accounts
2. SEGMENTAL REPORTING
2019 Mineral
Corporate Exploration Total
By Business Segment: 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
========== ============ =============
2020 Mineral
Corporate Exploration Total
By Business Segment: EUR'000 EUR'000 EUR'000
Revenue - 2,513 2,513
Gain / (loss)
for the year 2,384 (5,866) (3,482)
---------- ------------ -------------
Balance Sheet - Segment Assets 3,350 79,110 82,460
- Segment Liabilities (50,764) (13,559) (64,323)
---------- ------------ -------------
Net Assets (47,414) 65,551 18,137
========== ============ =============
By Geographical Iberia UK Total
Sector
EUR'000 EUR'000 EUR'000
Revenue 2,513 - 2,513
Gain / (loss)
for the year (5,866) 2,384 (3,482)
---------- ------------ -------------
Balance Sheet - Segment Assets 79,110 3,350 82,460
- Segment Liabilities (13,559) (50,764) (64,323)
---------- ------------ -------------
Net Assets 65,551 (47,414) 18,137
========== ============ =============
3. EMPLOYEES AND DIRECTORS
During the year EUR2,508,000 (2019: EUR1,614,000) of staff costs
were capitalised in Intangible Assets within the group.
W Resources Plc had no staff during the year and therefore no
staff costs.
The average monthly number of employees during the year was as
follows:
2020 2019
Management & Administration 4 4
Technical 68 44
===== =====
2020
Share Directors
Options Consultancy Fees
EUR'000 EUR'000 EUR'000
Michael Masterman - 221 -
Byron Pirola (resigned 30 March - - -
2020)
David Garland - - 16
Pablo Neira - - 117
James Argalas - - 24
Oscar Marin Garcia (appointed
8 January 2020 / resigned 12
February 2021) 2 - 24
-------- ------------ ----------
Total 2 221 181
2019
Share Directors
Options Consultancy Fees
EUR'000 EUR'000 EUR'000
Michael Masterman - 304 -
Byron Pirola (resigned 30 March - - -
2020)
David Garland - - 16
Pablo Neira - - 48
James Argalas - - 24
Oscar Marin Garcia (appointed
8 January 2020 / resigned 12
February 2021) - - -
-------- ------------ ----------
Total - 304 88
4. NET FINANCE COSTS
2020 2019
Finance costs: EUR'000 EUR'000
Other finance costs 377 146
Amortisation of loan costs 1,390 1,054
-------- --------
1,767 1,200
======== ========
5. PROFIT / (LOSS) BEFORE INCOME TAX
The loss before income tax is stated after charging /
(crediting):
2020 2019
EUR'000 EUR'000
Cost of inventories recognised as expense 2,513 343
Depreciation - owned assets 238 218
Exploration & evaluation costs amortisation 69 61
Auditors' remuneration 40 33
Impairment of intangible assets (note 10) 2,257 -
Impairment of tangible assets (note 10) 1,276 -
Foreign exchange differences (4,267) 495
======== ========
A total of EUR125,000 (2019: EUR304,000) relating to Michael
Masterman's consultancy fees were capitalised in intangible assets
in 2020.
6. INCOME TAX
Analysis of tax expense
No liability to corporation tax arose for the year ended 31
December 2020 nor for the year ended 31 December 2019.
Reconciliation of the tax expense
2020 2019
EUR'000 EUR'000
Loss before income tax (3,482) (2,942)
======== ========
Profit / (Loss) multiplied by a rate of corporation
tax
of 31.6% (2019 - 23.4%) (1,099) (687)
Effects of: -
Accelerated capital allowances
Effect of different tax rates in other jurisdictions (361) (8)
Intercompany interest not yet recognised
in Spain and Portugal 479 304
Share options and warrants issued 5 -
Depreciation 97 65
Impairment of tangible assets 1,116 -
Accelerated capital allowances - (356)
Adjustment to losses with no recognisable
deferred tax asset (238) 682
Tax expense - -
======== ========
The weighted average applicable tax rate of 31.6% (2019: 23.4%)
is a combination of 19% the standard rate of corporation tax in the
UK, 25% the rate of corporation tax in Spain and 21% the rate of
corporation tax in Portugal.
No deferred tax asset has been recognised in accordance with IAS
12, for carried forward tax losses, due to uncertainty as to when
profits will be recognised against which these losses can be
relieved. The Group has approximately EUR13,624,000 (2019:
EUR15,221,000) of tax losses carried forward for use against future
taxable profits. These losses does not include the interest charged
from W resources to its subsidiaries, which has been recognised in
income in W Recourses but has not yet been recognised in Spain and
Portugal, these costs will be recognised and relieved when paid.
These total a further EUR5,284,000 (2019: EUR3,766,000)
7. PROFIT OF PARENT COMPANY
As permitted by Section 408 of the Companies Act 2006, the
income statement of the parent company is not presented as part of
these financial statements. The parent company's profit for the
financial year was EUR3,902,000 (2019: Loss (EUR696,000)). Included
within these figures are intra-group interest received of
EUR1,518,000 (2019: EUR1,298,000).
8. EARNINGS PER SHARE
Basic loss per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
Diluted earnings 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 and warrants
issued during 2016, 2018, 2019 and 2020 are considered to be
anti-dilutive in 2019 in accordance with IAS 33 as on conversion
they would decrease loss per share from continuing operations.
Reconciliations are set out 2020
below:
Weighted Average Per Share
Loss Number of Shares Amount
EUR'000 (millions) Pence
Basic earnings per share
Earnings attributable to ordinary
shareholders (3,482) 6,795 -0.05
Effect of dilutive securities
Options and warrants - - -
Diluted earnings per share
Adjusted earnings (3,482) 6,795 -0.05
======== ================= ==========
2019
Weighted Average Per Share
Loss Number of Shares Amount
EUR'000 (millions) Pence
Basic earnings per share
Earnings attributable to ordinary
shareholders (2,942) 6,018 -0.05
Effect of dilutive securities - - -
-------- ----------------- ----------
Diluted earnings per share
Adjusted earnings (2,942) 6,018 -0.05
======== ================= ==========
9. INTANGIBLE ASSETS
Exploration
Group & Evaluation
Costs
COST EUR'000
At 1 January 2020 32,616
Additions 11,601
At 31 December 2020 44,217
-------------
AMORTISATION
At 1 January 2020 734
Amortisation for year 69
Impairment 2,257
-------------
At 31 December 2020 3,060
-------------
NET BOOK VALUE
At 31 December 2020 41,157
=============
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
=============
The above represents capitalised testing works and concessions
costs acquired.
10. PROPERTY, PLANT AND EQUIPMENT
Group Plant &
Machinery
COST EUR'000
At 1 January 2020 31,125
Additions 3,288
At 31 December 2020 34,413
----------
DEPRECIATION
At 1 January 2020 1,022
Charge for year 238
Impairment 1,276
At 31 December 2020 2,536
----------
NET BOOK VALUE
At 31 December 20209 31,877
==========
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
==========
Reclassifications
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
Euro (EUR) Euro (EUR)
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
--------------- -----------------
Impairment
Impairment tests were performed on the fair value of each
intangible and tangible asset at 31 December 2020, and the Group
concludes that the following impairment adjustments are
necessary:
Intangible Assets:
Tailing Plant Optimisation costs EUR2,257,000
Tangible Assets:
Net book value of the Tailings
Plants EUR1,276,000
Total Impairment EUR3,534,000
The Tailings Processing Plants were built between 2014 and 2015.
They were operating until 2017 to process the old tailings dumps
and produced over 100 tonnes of WO(3) concentrate, however these
plants never attained optimum capacity, and although they were used
during the testing phase of the new Crusher Plant completed in
2019, they are now no longer utilised and are redundant. They may
have a future scrap retail value but as this cannot be determined,
we have impaired their net book value of EUR1,276,000 to Nil as at
31 December 2020.
The ramp-up period is defined as the period between plant
completion and the attainment of optimum capacity, during which the
plants' equipment is subject to testing and adjustment until said
optimum capacity is attained. During the period of their operation,
operating costs associated with the two plants were incurred and
capitalised between 2014 & 2017 totalling EUR2,257,000 -
management considers it appropriate to impair the net book value of
these plants. Consistent with this an impairment adjustment of
EUR2,257,000 has been made at 31 December 2020.
The net book value of intangible assets at 31 December, 2020 EUR
41,156,890, above, includes capitalised exploration &
evaluation costs for the Company's three exploration sites in
Portugal, with a combined value of EUR 6,324,233 as follows:
Régua Tungsten Deposit
- A trial mining licence awarded on 20 June 2014 for the Re gua
tungsten deposit located 400km North of Lisbon and 95km East of
Porto in the municipality of the town of Armamar. In October 2015,
Golder Associates issued a JORC compliant mineral resource estimate
indicating a total resource tonnage of 5.46mt at a grade of 28% a
cut off of 0.1% WO(3) . In February 2020 Golder Associates issued a
revised JORC compliant mineral estimate confirming 4.47mt at 0.27%
WO(3) . The total historic cost of this exploration licence at 31
December 2020 was EUR3,271,712.
- This licence expired on 20 September 2020 and an application
for the full mining licence was submitted on 16 June 2020.
Tarouca Tungsten and Tin Project
- A permit for the exploration of the Tarouca tungsten and tin
project, located some 70km east of the city of Porto and just 20km
from Re gua, was granted on 23 March, 2012. Exploration activities
completed here have shown extremely high-grade results with heavy
mineralisation. Although no Resource Estimate has issued, as
further exploration is necessary, it has the potential to enhance
and expand the Re gua development. The total historic cost of this
exploration licence at 31 December 2019 was EUR939,125.
- This licence expired on 29 March 2019 and an application for
its renewal and the inclusion of an additional area of further to
the south where the Company believes mineralisation occurs, was
submitted on 5 February 2019.
Sa o Martinho and Crato Assumar Arronches gold prospection
- Two combined exploration licences for gold prospection, Sa o
Martinho and Crato Assumar Arronches, near the town of Portalegre
(Northern Alentejo), around 200 km East of Lisbon. The total
historic cost of these two exploration licences at 31 December 2020
was EUR2,113,397. In June 2016, Golder Associates issued a maiden
JORC mineral resource estimate of 3Mt at 1.04 g/t gold, which
equates to 111,987oz in contained gold. This maiden JORC compliant
mineral resource estimate provides a basis from which the Company
will look to upgrade the quality and size of the resource.
- These combined licences expired on 29 September 2018 and an
application to convert the Sa o Martinho into a trial mining
licence of 5.74km(2) and for a new exploration licence of 268.9
km(2) which encompasses the Sa o Martinho area, and a large part of
the old Crato Assumar Arronches area was submitted on 27 September
2018.
All expenditure commitments under the licences were fulfilled
and as they have expired there is currently no unfulfilled
commitment to future expenditure. Although they have expired as
detailed above, applications for their renewal or conversion into
trial mining or full mining licences have been submitted to
Portuguese authorities. The granting of all new licences and
extensions has, however, been delayed due to changes that have to
be made to Portuguese mining law combined with the challenges
Portugal endured in 2020 with the COVID-19 crisis and associated
state of emergency.
The Company is, however, confident that, given the encouraging
exploration results, and given that no other company has applied
for these areas, combined with strong support from local
authorities, these licences will be granted, which has also been
assured verbally by them. As a result, the Company considers that
their further successful development is likely to proceed and no
impairment adjustment is necessary.
11. INVESTMENTS
Company Shares in
Group
Undertakings
COST EUR'000
At 1 January 2020
and 31 December 2020 6,695
-------------
NET BOOK VALUE
At 31 December 2020 6,695
=============
At 31 December 2019 6,695
=============
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
=============
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 Caceres,
Spain
Nature of business: Tungsten mining, production, exploration
%
Class of shares: Holding
Ordinary 100.00
2020 2019
EUR'000 EUR'000
Aggregate capital and reserves (13,490) (6,258)
========= ========
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
2020 2019
EUR'000 EUR'000
Aggregate capital and reserves (518) (367)
======== ========
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
2020 2019
EUR'000 EUR'000
Aggregate capital and reserves (567) (431)
======== ========
During 2019 the company converted EUR5m of its intercompany loan
with Iberian Resources Spain SL, into equity of Iberian Resources
Spain SL.
12. INVENTORIES
Group
2020 2019
EUR'000 EUR'000
Concentrate for re-sale 621 415
Spares and Consumables 553 -
-------- --------
1,174 415
======== ========
13. TRADE AND OTHER RECEIVABLES
Group Company
2020 2019 2020 2019
EUR'000 EUR'000 EUR'000 EUR'000
Current:
Trade receivables 389 36 - -
Other receivables 1,197 905 28 61
Other prepayments 1,768 1,929 56 36
Finance cost prepayments 1,883 1,203 1,526 1,009
>1 year:
Amounts owed by group undertakings - - 73,737 59,977
Finance cost prepayments 2,059 2,507 1,673 2,102
-------- -------- -------- --------
7,296 6,580 77,020 63,185
======== ======== ======== ========
14. CASH AND CASH EQUIVALENTS
Group Company
2020 2019 2020 2019
EUR'000 EUR'000 EUR'000 EUR'000
Bank accounts 956 2,460 65 1,670
======== ======== ======== ========
15. CALLED UP SHARE CAPITAL
Allotted and issued: Nominal 2020 2019
Number Class Value EUR'000 EUR'000
7,269,220,952
(2019: 6,378,417,640) Ordinary 0.1p 8,820 7,822
======== ======== ========
890,713,312 Ordinary Shares of 0.1p were issued during the year
as follows:
- On 17 January 2020, 111,615,139 Ordinary Shares of 0.1p each
were issued at a premium of 0.21p to repay directors loans
totalling EUR390,000.
- On 10 March 2020, 209,999,998 Ordinary Shares of 0.1p each
were issued at a premium of 0.26p raising GBP756,000
(EUR900,000).
- On 24 August 2020, 75,187,969 Ordinary Shares of 0.1p each
were issued at a premium of 0.03p being the conversion of
EUR100,000 of convertible bonds.
- On 9 October 2020, 397,689,658 Ordinary Shares of 0.1p each
were issued at a premium of 0.023p to three creditors in order to
settle amounts totalling GBP489,000 (EUR538,025).
- On 4 December 2020, 96,300,548 Ordinary Shares of 0.1p each
were issued at a premium of 0.0111p being the conversion of
EUR100,000 of convertible bonds and EUR7,000 of capitalised
interest.
On 15 December 2020, the initial expiry date of 471,428,568
Share Warrants was extended from 31 December 2020 to 31 December
2021.
At the year-end there were 1,384,201,147 Share Warrants in issue
that were yet to be exercised. (2019: 779,033,998).
16. RESERVES
Share
Group Based
Retained Share Payment Merger
Earnings Premium Reserve Reserve Totals
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
At 1 January 2020 (28,027) 36,658 1,622 1,014 11,267
Profit for the
year (3,482) - - - (3,482)
Cash share issue - 896 - - 896
Non cash share
issue - 140 - - 140
Share warrants
issued - - 494 - 494
Transfer between
reserves 115 - (115) - -
Share options issued - - 2 - 2
--------- -------- -------- -------- --------
At 31 December
2020 (31,394) 37,694 2,003 1,014 9,317
========= ======== ======== ======== ========
Share
Company Based
Retained Share Payment Merger
Earnings Premium Reserve Reserve Totals
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
At 1 January 2020 (20,587) 36,658 1,622 1,014 18,707
Profit for the
year 3,902 - - - 3,902
Cash share issue - 896 - - 896
Non cash share
issue - 140 - - 140
Share warrants
issued - - 494 - 494
Transfer between
reserves 115 - (115) - -
Share options issued - - 2 - 2
--------- -------- -------- -------- --------
At 31 December
2020 (16,570) 37,694 2,003 1,014 24,141
========= ======== ======== ======== ========
17. TRADE AND OTHER PAYABLES
Group Company
2020 2019 2020 2019
EUR'000 EUR'000 EUR'000 EUR'000
Current:
Trade creditors 6,265 3,500 183 198
Amounts owed to group undertakings - - 56 75
Other creditors 1 2 1 2
Accrued expenses 468 86 464 82
Directors' current accounts - 390 - 390
-------- -------- -------- --------
6,734 3,978 704 747
======== ======== ======== ========
18. FINANCIAL LIABILITIES - BORROWINGS
Group Company
2020 2019 2020 2019
EUR'000 EUR'000 EUR'000 EUR'000
Current financial liabilities
- borrowings:
BBVA reverse factoring agreement 119 200 - -
BankInter advance on VAT receivables 500 - - -
Santander loan 5,000 - - -
Atlas convertible bonds 334 - 334 -
BBVA overdraft facility - 300
BBVA advance on VAT receivables - 50
Caja Rural de Extremadura
loan - 3,000
CaixaBank credit facility - 500
Hire purchase (note 19) 11 11 - -
Non - Current financial liabilities
- borrowings:
BlackRock loan facility 49,781 44,273 49,781 44,273
BBVA overdraft facility 296 - - -
Caja Rural de Extremadura 500 - - -
loan
CaixaBank credit facility 500 - - -
BankInter S.A. Loan 400 - - -
BBVA loan 120 - - -
Hire purchase (note 19) 28 39 - -
-------- -------- -------- --------
57,589 48,373 50,115 44,273
======== ======== ======== ========
All non-current financial liabilities are due between 2-5 years.
No financial liabilities are due in more than 5 years.
On 14 February 2018, W Resources signed a Credit and Guaranty
Agreement with BlackRock Financial Management Inc. ("BlackRock") 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.
- 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 agreed to increase the existing
loan facility provided to W Resources by US$5 million, with no
warrants attached.
On 8 October 2020, BlackRock agreed to further increase the
existing loan facility provided to W Resources by US$7 million,
with no warrants attached. By 31 December 2020 two tranches of this
facility, for US$2,750,004 and US$2,250,000, had been drawn down on
4 October 2020 and on 1 December 2020, respectively, for a total of
US$5,000,004.
During the year, interest of EUR6,331,396 (2019: EUR5,257,259)
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 loan included in the statement of
financial position at the balance sheet date is US$61,093,027
(EUR49,781,329) (2019: EUR44,273,000).
On 7 May 2019, a loan of EUR3,000,000 was granted by Spanish
bank, Caja Rural de Extremadura Sociedad Cooperativa de Cre dito
("Caja Rural de Extremadura") with a term of 15 months and an
interest rate of 1.75% p.a. This loan was repaid on 31 January
2020. The value of this loan included in the statement of financial
position at the balance sheet date is NIL (2019: EUR3,000,000).
On 18 June 2019, an overdraft facility of EUR300,000 was
provided by Banco Bilbao Vizcaya Argentaria, S.A ("BBVA"), 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. On 28 May 2020 the BBVA
extended the term on this overdraft facility 18 June 2025. The
value of this overdraft included in the statement of financial
position at the balance sheet date is EUR296,436 (2019:
EUR299,700).
On 15 October 2019, the Banco Bilbao Vizcaya provided and
advance on VAT receivables of EUR50,000 with a term of 12 months
and an Interest rate of 2.3% p.a. This was fully repaid at 31
December 2020.
On 15 October 2019, Iberian Resources Spain S. L. signed a
reverse factoring agreement with the BBVA, for up to EUR200,000
with an interest rate 2.75% p.a. This agreement was automatically
renewed for a one year period on its first anniversary. The value
of this credit facility included in the statement of financial
position at the balance sheet date is EUR118,980 (2018:
EUR199,833).
On 3 December 2019, Iberian Resources Spain S. L. signed a
revolving credit facility of EUR500,000 with CaixaBank, S.A
("CaixaBank") with a term 6 months and an interest rate of 2.5%
p.a. This facility was extended on 28 June 2020 for a 5-year
period. The value of this credit facility included in the statement
of financial position at the balance sheet date is EUR500,000
(2019: EUR500,000).
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. On 15
January 2021, the Company finalised a six month extension to this
loan facility with an interest rate is 3.5% per annum.
Subsequently, on 7 May 2021 the EUR5.2m Grant was paid by the Junta
de Extremadura Government and this loan was repaid in full.
The value of this loan included in the statement of financial
position at the balance sheet date is EUR5,000,000 (2019: NIL).
Under the COVID-19 state of emergency, the Spanish state-owned
bank (attached to the Ministry of Economy and Business), the
Instituto de Cre dito Oficial ("ICO"), provided loan guarantees of
up to 80% of loan value to Spanish banks providing loans to Spanish
companies. EUR1.82m of such facilities at annual interest rates of
2-3% pa was secured with four major banks as detailed below. These
facilities refinance and extend the maturity of some existing
lines, the details of which are listed below and provide a net
EUR1.02m of additional working capital funding. All loan agreements
and extensions are to the Company's 100% owned subsidiary, Iberian
Resources Spain:
The specific new facilities were:
- On 1 June 2020, Bankinter S.A. granted IRS a loan for EUR400,000 with a term of 5 years.
- On 28 May 2020, the BBVA granted IRS a loan for EUR120,000 from with a term of 5 years.
- On 9 July 2020, the Caja Rural de Extremadura granted IRS a
loan for EUR500,000 with a term of 5 years.
The extensions to existing loan facilities are as follows:
- On 28 June 2020, CaixaBank extended the term of the EUR500,000
revolving credit facility granted to IRS on 3 December 2019, from
30 May 2020 to 4 June 2025, guaranteed by W Resources Plc and also
by ICO.
- On 28 May 2020, the BBVA extended the term on IRS' existing
EUR300,000 overdraft facility granted on 18 June 2019, from 18 June
2020 to 18 June 2025 which is now guaranteed as an ICO loan.
In March 2020, W secured a GBP4.0m convertible bond facility
from Atlas Capital Markets ("Atlas") comprising a convertible bond
with a coupon of 5% and a term of 3 years. The facility can be
drawn in tranches of up to GBP500,000 at the election of W, with an
agreed period between subsequent drawdowns. The facility is
unsecured and subordinated to the BlackRock Financial Management
Inc. ("BlackRock") loan facility with BlackRock consent required
for a draw. Atlas can convert the bond to W shares by issuing a
conversion notice with the price set at 95% of the selected 3-day
VWAP in the 15 days leading up to issue of a conversion notice by
Atlas. At the balance sheet date one tranche of GBP500,000 had been
drawn down and two tranches of GBP100,000 converted into shares
leaving a balance of GBP300,000 (EUR334,000) (2019: NIL). Warrants
will be issued with each tranche on a pro rata basis, with
5,555,555 Warrants issued at a subscription price of 0.36 pence per
Ordinary Share per GBP100,000 principal amount of Convertible Bonds
that are issued. The Warrants have a 3 year expiry term. During the
year 27,777,775 warrants were issued. The Black Scholes valuation
was immaterial and therefore has not been recognised in the
financial statements. (see note 22)
On 15 January 2021, the Company drew down the third and final
tranche of US$1,999,996 of the BlackRock incremental loan facility
of US$7 million granted on 8 October 2020.
19. HIRE PURCHASE
Group
Hire purchase liabilities 2020 2019
Minimum lease payments fall due as follows: EUR'000 EUR'000
Gross obligations repayable:
Within one year 11 11
Between one and five years 28 39
-------- --------
39 50
-------- --------
Finance charges repayable: - -
-------- --------
Net obligations repayable: 11 11
Within one year 28 39
-------- --------
Between one and five years 39 50
======== ========
20. RELATED PARTY DISCLOSURES
During the year the Directors acquired the following Ordinary
0.1p Shares:
Michael Masterman 65,146,580
David Garland -
Byron Pirola (resigned 30 March 2020) 32,573,290
Pablo Neira -
James Argalas 13,895,269
Oscar Marin Garcia (appointed 8 January 2020 / resigned -
12 February 2021)
Between the year end and the date of signing of this report the
Directors have acquired the following Ordinary 0.1p Shares:
Michael Masterman 150,000,000 (Purchased on
market)
David Garland -
Pablo Neira 40,074,602
James Argalas -
On 2 December 2016, Share Options were granted to the directors
as follows:
Director Number of Options Exercise Price Expiry Date
Michael Masterman 20,000,000 GBP0.007 31/12/2020
10,000,000 GBP0.008 31/12/2020
10,000,000 GBP0.01 31/12/2020
Byron Pirola 20,000,000 GBP0.007 31/12/2020
10,000,000 GBP0.008 31/12/2020
10,000,000 GBP0.01 31/12/2020
David Garland 20,000,000 GBP0.007 31/12/2020
10,000,000 GBP0.008 31/12/2020
10,000,000 GBP0.01 31/12/2020
These expired on 31 December 2020 and none were exercised.
Further on 20 November 2018, Share Options were granted to
directors as follows:
Director Number of Options Exercise Price Expiry Date
Pablo Neira 30,000,000 GBP0.0055 30/11/2021
James Argalas 30,000,000 GBP0.0055 30/11/2021
These remained unexercised at the balance sheet date.
Further on 15 November 2019, Share Options were granted to a
related party of a Director as follows:
Director Number of Options Exercise Price Expiry Date
Related party of Oscar 21,900,000 GBP0.0040 30/11/2020
Garcia (appointed 08
January 2020 / resigned
12 February 2021)
These options expired on 30 November 2020 and none were
exercised.
During 2019, the Directors made loans to the company as
follows:
Michael Masterman EUR229,000
Byron Pirola EUR111,000
James Argalas EUR50,000
-----------
Total EUR390,000
These loans were converted into Share Capital on 17 January
2020.
Included in other creditors is the sum of EUR414,000 (2019:
EUR358,000) for unpaid consultancy fees due to FeX Limited a
company, based in Hong Kong, wholly-owned by Michael Masterman a
Director and significant shareholder. During 2020 consultancy fees
of EUR179,000 were charged to the Group by FeX Limited.
Included in trade creditors is the sum of EUR42,000 (2019: Nil)
for unpaid consultancy fees due to Michael Masterman a Director and
significant shareholder. During the year consultancy fees of
EUR42,000 were charged to the Company by Michael Masterman.
Also included in other creditors is the sum of EUR120,000 (2019:
EUR43,000) for accrued directors fees due to the Directors as
follows: EUR69,000 Pablo Neira, EUR3,300 (GBP3,000) David Garland,
EUR24,000 James Argalas, EUR24,000 Oscar Marin Garcia.
21. EVENTS AFTER THE REPORTING PERIOD
On 11 January 2021, the Group drew down a further GBP500,000
tranche from the GBP4.0 million Atlas Capital Markets ("Atlas")
convertible bond facility. This is the second draw down made from
the facility which was secured on 30 March 2020. This convertible
bond tranche has a 5% coupon and 3-year term. As part of the
agreement, Atlas can convert the bond to W shares by issuing a
conversion notice with the price set at 95% of the selected 3-day
VWAP in the 15 days leading up to the issue of a conversion notice
by Atlas.
On 11 January 2021, the Company converted GBP100,000 of Atlas
Convertible Bonds into 96,525,097 ordinary shares of 0.1p per share
("Ordinary Shares") at a price of 0.1036p per Ordinary Share.
On 15 January 2021, the Company finalised a six month extension
to the EUR5m loan facility with the Spanish bank, Santander. As the
initial term of the loan was the earlier of 18 February 2021 or the
receipt of the proceeds of the Grant funds. The facility interest
rate is 3.5% per annum, payable quarterly, with no amortisation and
is secured by a pledge over the rights to the Grant funds.
On 26 January 2021, the Company issued 247,290,458 ordinary
shares of 0.1p per share ("Ordinary Shares") at a price of 0.1113p
per Ordinary Share. GBP44,603 (EUR50,000) forms part of Director,
Pablo Neira's 2020 remuneration package while GBP230,631 was issued
to technical and professional creditors.
On 28 January 2021, the Company converted GBP100,000 of Atlas
Convertible Bonds into 96,899,224 ordinary shares of 0.1p per share
("Ordinary Shares") at a price of 0.1032p per Ordinary Share.
On 12 February 2021, Oscar Marin Garcia stepped down from the
Board to focus on increased commitments in his business.
On 8 March 2021, the Group announced a proposed reorganisation
of the Company's share capital. The proposed Capital Reorganisation
consisted of the following steps:
- the amendment of the Company's Articles of Association to set
out the rights and restrictions attaching to a new class of
Deferred Shares;
- each Existing Ordinary Share of GBP0.001 nominal value each
will be subdivided into two new shares, a Redenominated Ordinary
Share and a Deferred Share;
- the nominal value of each new Redenominated Ordinary Share
will be one per cent. of an Existing Ordinary Share, being
GBP0.00001;
- the nominal value of each new Deferred Share will be
ninety-nine per cent. of an Existing Ordinary Share, being
GBP0.00099; and
- every 100 Redenominated Ordinary Shares will then be
consolidated into one New Ordinary Share with a nominal value of
GBP0.001 (being 100 * GBP0.00001).
This reorganisation was approved at a General meeting held on 31
March 2021.
On 22 March 2021, the Company converted GBP100,000 of Atlas
Convertible Bonds into 100,000,000 ordinary shares of 0.1p per
share ("Ordinary Shares") at a price of 0.1000p per Ordinary Share.
The Company will pay GBP20,200 to Atlas as compensation for Atlas
being unable to convert at price lower than the nominal value of an
Ordinary Share.
On 8 April 2021, the Company converted GBP250,000 of Atlas
Convertible Bonds into 2,724,469 ordinary shares of 0.1p per share
("Ordinary Shares") at a price of 9.1761p per Ordinary Share.
On 7 May 2021, Iberian Resources Spain received the EUR5.2m
Grant from the Junta de Extremadura Government in Spain, which was
initially awarded in March 2018. In February 2020, W received a
EUR5m loan from the Spanish bank, Santander in order to monetise
the Grant and this has now been repaid in full.
On 17 May 2021, the Company completed a placement of 28,278,610
ordinary shares of 0.1p per share at 8p per Ordinary Share to raise
GBP2.26 million. Under the Placing, subscribers were offered
warrants to subscribe for new ordinary shares in conjunction with
the Placing Shares on the basis of 1 Warrant for every 2 Ordinary
Shares subscribed for. The Warrants are exercisable at any time in
the two years following admission of the Placing Shares to trading
on AIM at an exercise price of 12p per share.
22. SHARE WARRANTS / SHARE BASED PAYMENTS
2020
Weighted Outstanding
average exercise at 31 December 2020
Number issued price 2020 Expiry Date EUR'000
Share Options
2 December
2016 120,000,000 - 31/12/2020 -
20 November
2018 150,000,000 90,000,000 30/11/2021 69
15 November
2019 43,800,000 - 30/11/2020 -
------------------ --------------- --------
GBP0.0055 90,000,000 69
------------------ --------------- --------
Share Warrants
14 May 2018 307,605,430 307,605,430 14/05/2023 1,440
18 April 2019 400,000,000 400,000,000 31/12/2021 -
22 May 2019 71,428,568 71,428,568 31/12/2021 -
4 August 2020 27,777,775 27,777,775 04/08/2023 -
27 October
2020 96,000,000 96,000,000 27/10/2025 17
3 November
2020 481,389,374 481,389,374 03/11/2025 477
------------------ --------------- --------
GBP0.0029 1,384,201,147 1,934
------------------ --------------- --------
2019
Weighted Outstanding
average exercise at 31 December 2019
Number issued price 2019 Expiry Date EUR'000
Share Options
2 December
2016 120,000,000 120,000,000 31/12/2020 67
20 November
2018 150,000,000 150,000,000 30/11/2021 115
15 November
2019 43,800,000 43,800,000 30/11/2020 -
------------------ --------------- --------
GBP0.0062 313,800,000 182
------------------ --------------- --------
Share Warrants
14 May 2018 307,605,430 307,605,430 14/05/2023 1,440
18 April 2019 400,000,000 400,000,000 31/12/2021 -
22 May 2019 71,428,568 71,428,568 31/12/2021 -
GBP0.0040 779,033,998 1,440
------------------ --------------- --------
On 2 December 2016, Share Options were granted to the directors
as follows:
Director Number of Options Exercise Price Expiry Date
Michael Masterman 20,000,000 GBP0.007 31/12/2020
10,000,000 GBP0.008 31/12/2020
10,000,000 GBP0.01 31/12/2020
Byron Pirola 20,000,000 GBP0.007 31/12/2020
10,000,000 GBP0.008 31/12/2020
10,000,000 GBP0.01 31/12/2020
David Garland 20,000,000 GBP0.007 31/12/2020
10,000,000 GBP0.008 31/12/2020
10,000,000 GBP0.01 31/12/2020
The share options issued during 2016 have been valued at fair
value at 31 December 2016 using the Black Scholes method and
GBP60,000 (EUR67,000) has been recognised in administrative
expenses in 2016 and a share based payments reserve of GBP60,000
(EUR67,000) created and included in the Statement of Other
Comprehensive Income. The inputs used in calculating this include:
29.33% Volatility, 5% Risk-free interest rate, 0% Dividend Yield,
0.4770p Share price at the grant date.
These options expired on the 31 December 2020, none were
exercised and therefore a transfer of EUR67,000 has been made from
the share based payment reserve into retained earnings.
Further on 20 November 2018, Share Options were granted to
Directors and Key Management Personnel as follows:
Director Number of Options Exercise Price Expiry Date
Pablo Neira 30,000,000 GBP0.0055 30/11/2021
James Argalas 30,000,000 GBP0.0055 30/11/2021
Key Management Personnel 90,000,000 GBP0.0055 30/11/2021
The share options issued during 2018 have been valued at fair
value at 30 November 2018 using the Black Scholes method and
GBP103,000 (EUR115,000) has been recognised in administrative
expenses in 2018, included in the share based payments reserve and
included in the Statement of Other Comprehensive Income. The inputs
used in calculating this include: 20.79% Volatility, 3% Risk-free
interest rate, 0% Dividend Yield, 0.5260p Share price at the grant
date.
Two members of Key Management Personnel holding 60,000,000
Options left during 2020 and as such their options expired.
Therefore a transfer of EUR46,000 has been made from the share
based payment reserve into retained earnings.
Further on 15 November 2019, Share Options were granted to a
related party of a Director as follows:
Director Number of Options Exercise Price Expiry Date
Related party of Oscar 21,900,000 GBP0.0040 30/11/2020
Garcia (appointed 08
January 2020 / resigned
12 February 2021)
The share options issued during 2019 have been valued at fair
value at 15 November 2019 using the Black Scholes method and
GBP1,400 (EUR2,000) has been recognised in administrative expenses
in 2020, at the date Oscar Marin Garcia was appointed a Director,
included in the share based payments reserve and included in the
Statement of Other Comprehensive Income. The inputs used in
calculating this include: 15.16% Volatility, 2.9% Risk-free
interest rate, 0% Dividend Yield, 0.3450p Share price at the grant
date.
These options expired on 30 November 2020, none were exercised
and therefore a transfer of EUR2,000 has been made from the share
based payment reserve into retained earnings.
No options have been exercised and the reserve balance is
EUR69,000 (2019: EUR182,000) at 31 December 2020.
On 14 May 2018, 307,605,430 Share Warrants were issued to
BlackRock as part of the consideration for the loan. These had an
exercise price of 0.1p per share and expire on 14 May 2023.
These have been valued at 5% of the total loan value, $1,750,000
at an exchange rate of 1.355 on 14 May 2018 equalling GBP1,292,000
(EUR1,440,000) which were included within the value of the total
loan costs that have been prepaid in 2018 and will be expensed
across the term of the loan, currently 2 years remain.
On 4 August 2020, 27,777,775 Share Warrants were issued to Atlas
Special Opportunities LLC as part of the consideration for the
initial draw down of the convertible bond facility. The warrants
have a 3 year expiry.
These have been valued at fair value at 4 August 2020 using the
Black Scholes method and GBP1,000 (EUR2,000) this is considered to
be immaterial and no adjustment has been made to the income
statement. The inputs used in calculating this include: 33.12%
Volatility, 5% Risk-free interest rate, 0% Dividend Yield, 0.15p
Share price at the grant date.
On 27 October 2020, 96,000,000 Share Warrants were issued to
BlackRock as part of the consideration for amending the agreement
to allow the capitalisation (payment in kind) of interest due on 15
May 2020. The warrants have a 5 year expiry.
These have been valued at fair value at 27 October 2020 using
the Black Scholes method and GBP15,000 (EUR17,000) has been
recognised in administrative expenses in 2020, included in the
share based payments reserve and included in the Statement of Other
Comprehensive Income. The inputs used in calculating this include:
42.08% Volatility, 5% Risk-free interest rate, 0% Dividend Yield,
0.13p Share price at the grant date.
On 3 November 2020, 171,101,564 Share Warrants were issued to
BlackRock as consideration for GBP150,000 (EUR166,000) the
amendment fee to allow the capitalisation (payment in kind) of
interest due on 15 August 2020. Further on 3 November 2020,
310,287,810 Share Warrants were issued to BlackRock as
consideration for GBP280,000 (EUR311,000) the second incremental
amendment fee. The warrants have a 5 year expiry.
These have been valued at GBP430,000 (EUR477,000) the total of
the liability covered by the issue of the warrants. Which has been
included within the value of the total loan costs that have been
prepaid in 2020 and will be expensed across the term of the loan,
currently 2 years remain.
23. FINANCIAL INSTRUMENTS
Financial risk management
Overview
The Group has exposure to the following risks arising from
financial instruments:
-- Market
-- Interest rate
-- Foreign currency
-- Credit
-- Liquidity
This note presents information about the Group's exposure to
each of these risks, the group's objectives, policies and processes
for measuring and managing risk.
The Board of Directors determine, as required, the degree to
which it is appropriate to use financial instruments to mitigate
risk. Currently the Company's principal financial instruments
comprise cash, borrowings and equity capital. The Company does not
enter into complex derivatives to manage risk.
There is no material difference between the book value and fair
value of the Group cash balances, trade and other receivables,
trade and other payables or borrowings.
Market risk
Market risk is the risk that changes in market prices, such as
foreign exchange rates, interest rates and equity prices will
affect the Group's income or the value of its holdings of financial
instruments. The objective of market risk management is to manage
and control market risk exposure within acceptable parameters,
while optimising the return.
Due to the nature of the Group's operations, it will be mainly
exposed to fluctuations in the price of tungsten, changes in
foreign exchange rates and interest rates.
Interest rate risk
Interest rate risk is the risk that future cash flows of a
financial instrument will fluctuate because of changes in interest
rates. Management ensure fixed interest rates with good terms are
agreed with all finance providers to mitigate this risk. The risk
of significant fluctuation is therefore considered to be
immaterial.
Foreign currency risk
The Group operates internationally and is exposed to foreign
currency risk arising on cash and cash equivalents and receivables
denominated in a currency other than the respective functional
currencies of group entities. Primarily these transactions are
denominated in GBP and US dollars.
The Group also has significant loans outstanding in US dollars.
This exposes the group to currency risk as repayments of the loan
are to be made in s currency different to the functional currency
the Group is operating.
The following balances held in foreign currency at the reporting
date are:
Net foreign currency Group Company
financial (liabilities)
/ assets
2020 2019 2020 2019
EUR'000 EUR'000 EUR'000 EUR'000
GBP assets 62 114 62 114
USD assets 3 1,567 3 1,567
GBP liabilities (688) (381) (434) (130)
USD liabilities (49,798) (44,273) (49,798) (44,273)
AUD liabilities (3) (17) (3) (4)
--------- --------- --------- ---------
Total net exposure (50,424) (42,990) (50,170) (42,726)
--------- --------- --------- ---------
Sensitivity analysis
A 10 percent strengthening of the euro against the respective
currencies at 31 December 2020 would have increased / (decreased)
equity and profit and loss by the amounts shown below:
Profit and Loss Equity
Group 2020 2019 2020 2019
EUR'000 EUR'000 EUR'000 EUR'000
GBP 63 27 63 27
USD 4,980 4,271 4,980 4,271
AUD - 2 - 2
----------- --------- --------- ---------
Total net exposure 5,043 4,300 5,043 4,300
----------- --------- --------- ---------
Profit and Loss Equity
Company 2020 2019 2020 2019
EUR'000 EUR'000 EUR'000 EUR'000
GBP 37 2 37 2
USD 4,980 4,271 4,980 4,271
AUD - - - -
----------- --------- --------- ---------
Total net exposure 5,017 4,273 5,017 4,273
----------- --------- --------- ---------
Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counter party to a financial instrument fails to meet
its contractual obligations.
Exposure to credit risk
The carrying amount of financial assets represents the maximum
credit exposure. The maximum exposure to credit risk at the
reporting date was as follows:
Group Carrying Amount
2020 2019
EUR'000 EUR'000
Trade and other receivables 1,586 941
Cash and cash equivalents 956 2,461
-------- --------
2,542 3,402
-------- --------
Company
Trade and other receivables 28 61
Cash and cash equivalents 65 1,671
-------- --------
93 1,732
-------- --------
Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another
financial asset. The Group's approach to managing liquidity is to
ensure, as far as possible that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to the Group's reputation.
The following are contractual maturities of financial
liabilities at the balance sheet date:
Group - 31 Carrying amount Two months Two - Twelve More than
December 2020 or less months one year
EUR'000 EUR'000 EUR'000 EUR'000
Trade and other
payables 6,266 6,266 - -
Borrowings 57,589 5,002 962 51,625
---------------- ----------- ------------- ----------
63,855 11,268 962 51,625
---------------- ----------- ------------- ----------
Group - 31
December 2019
Trade and other
payables 3,502 3,502 - -
Borrowings 48,373 2 4,059 44,312
---------------- ----------- ------------- ----------
51,875 3,502 4,059 44,312
---------------- ----------- ------------- ----------
Company - 31 Carrying amount Two months Two - Twelve More than
December 2020 or less months one year
EUR'000 EUR'000 EUR'000 EUR'000
Trade and other
payables 184 184 - -
Borrowings 50.115 - 334 49,781
---------------- ----------- ------------- ----------
50,299 184 334 49,781
---------------- ----------- ------------- ----------
Company - 31
December 2019
Trade and other
payables 200 200 - -
Borrowings 44,273 -- - 44,273
---------------- ----------- ------------- ----------
44,473 200 - 44,273
---------------- ----------- ------------- ----------
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.
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