TIDMWRES
RNS Number : 8028T
W Resources PLC
23 July 2020
23 July 2020
W Resources Plc
("W" or the "Company")
June 2020 Quarterly Production Report
W Resources (AIM:WRES), the tungsten, tin and gold mining
company with assets in Spain and Portugal, announces its Q2 2020
quarterly production update for the La Parrilla mine in Spain and
an update on its tungsten, tin and gold projects in Portugal. The
quarter was significantly impacted by the COVID-19 state of
emergency in Spain.
-- A total of 253,256 tonnes ("t") of Run of Mine ("ROM") ore
fed to the La Parrilla plant in Q2 2020.
-- Total tungsten and tin contained metal production increased
by 0.5% to 47.6 tonnes during the quarter, mostly as a result of
strong tin recoveries.
-- Tin ("Sn") metal production was the highlight increasing 65%
to 20.0 dry metric tonnes ("dmt").
-- Tungsten ("WO(3) ") metal production decreased 17% to 2,756
metric tonne unit ("mtu") ( 27,560 kg) during the quarter as a
result of the temporary mine closure and weaker than expected plant
performance.
-- Combined shipments of tungsten concentrate (58.9t) and tin
concentrate (40.8t) increased to nearly 100t in Q2 2020, taking
total shipments to offtake partners to 89.0 t of tungsten
concentrate and 40.8 t of tin concentrate for the half year. A
further 20.4t of tungsten concentrate and 39.0t of tin concentrate
has been shipped from 1 July to date.
Production Summary
La Parrilla Production Q4 2019 Q1 2020 Q2 2020 Var %
Summary
============================= ======== ======== ======== ======
ROM feed (wmt) 113,322 273,656 253,256 -7%
Strip ratio 0.56 1.07 0.58 -46%
Jig plant feed (dmt) 105,579 240,926 228,060 -5%
Concentrator feed (dmt) 32,042 98,726 129,021 31%
WO(3) concentrate (dmt) 21.4 58.9 47.6 -19%
WO(3) contained metal (mtu) 968 3,306 2,756 -17%
Sn concentrate (dmt) 7.9 23.3 41.2 77%
Sn contained metal (dmt) 3.9 12.1 20.0 65%
Total concentrate (dmt) 29.3 82.2 88.8 8%
Total contained metal (dmt) 13.6 45.2 47.6 5%
Tungsten & Tin Shipments
(t) 9.1 30.1 99.7 231%
============================= ======== ======== ======== ======
('dmt' - dry metric tonnes, 'wmt' - wet metric tonnes, 'mtu' -
metric tonne unit (1 mtu = 10kg of metal)
Michael Masterman, Chairman of W Resources, commented: " The
second quarter was challenging with the State of Emergency shutdown
in April, followed by constrained operations as a result of the
ongoing COVID-19 pandemic. This was further impacted by operational
challenges relating to EPC contractor equipment primarily in the
jig and mill plant and in the concentrator rod mill. Short-term
solutions including a replacement mill have been implemented and
procurement of longer lead items initiated to further improve
operations. While tin recoveries have been high, tungsten
recoveries have lagged and extensive metallurgical and
geometallurgical test work as well as plant modifications are
underway with the aim to lift production.
"Spanish operating capability has been substantially enhanced
with experienced Director Pablo Neira moving to an executive
leadership role running the Spanish operation and the appointment
of Danilo Diaz from Anglo American as Plant Manager. We are seeing
material improvements in plant utilisation and operation hours
which should translate into higher production in the coming
quarters.
"With a strengthened Spanish operations team, implementation of
improvement programmes and advancement in metallurgical work to
lift tungsten recoveries we now have the fundamentals in place to
increase production."
Q2 2020 Overview
Q2 production was impacted by various factors and operationally
the team has made good progress to mitigate this going forward.
-- The Spanish State of Emergency shut down operations in April.
The mine and main plant reopened in May under the continuing
COVID-19 protocol and in the face of supply change logistics
challenges that the Spanish industry has faced.
-- Plant improvements made in order to rectify early-stage
operational challenges at La Parrilla have been completed. This
included several improvements to the jig plant and also replacement
of the mill as a result of the vendor not providing fit for purpose
plant and rolls.
-- Operating costs were carefully managed throughout the quarter
and further cost reductions have been implemented.
-- The operational team has been strengthened with Director
Pablo Neira moving to an executive leadership role in Spain and the
appointment of Danilo Diaz from Anglo American as Plant
Manager.
-- Significant new test work programmes have been completed to
support decision making on improving tungsten recoveries.
-- Whilst there were good tin recoveries the operational focus
on tungsten recoveries is the key focus.
COVID-19 - Spanish State of Emergency
-- The spread of COVID-19 has been controlled in Spain during
the quarter and no cases of COVID-19 have been reported by
employees or contractors. There has been a gradual return to normal
working conditions with appropriate prevention and controls.
-- The State of Emergency was lifted in Spain on 21 June and the
Spanish Government continues to closely monitor the situation.
Operations
-- Safety performance continues to be a top priority for the
Company. There were two minor lost time injuries at La Parrilla in
May and June, which have increased the total recordable injury
frequency rate (TRIFR) to 32.6; whilst any incident, whatever the
circumstance, is regrettable, we note that this value is below the
Spanish mining industry average of 45.2.
-- ROM feed has stabilised towards the end of the period, mostly
due to a very low feed tonnage in April caused by the compulsory
closure of non-essential operations imposed by the Spanish
Government.
-- Mining operations continue to perform well and deliver the
required ore feed to the plant at a low waste/ore strip ratio (0.58
in the quarter), while maintaining the required grades in line with
the plan to feed ore to the plant. Blasting has reached the more
competent ore reducing fines in the processing operations.
-- Effective utilisation of the plants has increased to over 80% at the end of the period.
-- Key initiatives completed in the quarter include the
installation of four hydrocyclones to feed the spiral banks, which
has resulted in a much more precise control and stability over the
density of the feed and a better operation of pumps, or the change
of one of the roll mills in the jig plant by a Vertical Shaft
Impactor (VSI), which has proven successful.
-- Despite lower tungsten production, W has benefited from
higher grades of tin delivered from the mine and high metal
recoveries to increase total production to 65%.
Shipments and Marketing
-- Shipped 58.9t of tungsten concentrate and 40.8t of tin
concentrate in Q2 2020, taking total shipments to offtake partners
to 89.0 t of tungsten concentrate and 40.8 t of tin concentrate for
the half year. A further 20.4t of tungsten concentrate and 39.0t of
tin concentrate has been shipped from 1 July to date.
-- Market prices for European ammonium paratungstate ("APT")
fell from 240-245 USD/mtu to 205-215 USD/mtu during the
quarter.
-- London Metal Exchange ("LME") tin prices increased 15.46%
from 14,591 USD/t to 16,847 USD/t during the quarter. The LME Sn
spot price is now at US$17,485 USD/t (21/7/2020).
-- Demand for APT in Europe and the United States has been
affected by the effects of COVID-19 however market experts expect
tungsten prices to be trending stable to higher in the near term.
(Source: Fastmarkets)
Tungsten and Tin Projects
-- Mining operations at the Régua tungsten mine in northern
Portugal commenced in March 2020 in the first of two adits with
skarn ore zones intersected in the initial development. Mining
activities were then paused following the COVID-19 related
restrictions implemented by the Portuguese Government.
-- Now that the COVID-19 crisis has eased, construction
activities at Régua have been rescheduled to commence in Q3 2020.
Plant design and procurement activities are near completion.
-- The application to extend the period of the trial mine
licence as a result of the COVID-19 emergency has been made to the
Portuguese mining authorities and is progressing.
Gold and Tungsten Exploration
-- The application for the São Martinho gold trial mine licence
in Portugal continues to advance towards grant with the issue of
the licence expected in late 2020. New expenditure on this project
is pending grant.
Corporate
-- Documentation is advanced to allow Payment in Kind ("PIK") of
the May 2020 interest payments totalling US$1.6m to BlackRock
Financial Management Inc.
-- Spanish government guaranteed bank facilities have been put
in place with major Spanish banks for a total of EUR1.82m, which
includes EUR800k of rollover of existing credit lines.
-- The Atlas Capital Markets facility of GBP4m remains in place
and there have been no drawings during the quarter.
Information communicated within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Enquiries:
W Resources Plc Grant Thornton UK LLP
Michael Masterman Colin Aaronson / Jen Clarke /
T: +44 (0) 20 7193 7463 Seamus Fricker
www.wresources.com T: +44 (0) 20 7383 5100
Joint Broker Joint Broker
Turner Pope Investments (TPI) Alternative Resource Capital /
Ltd Shard Capital
Andy Thacker / Zoe Alexander Alex Wood
T: +44 (0) 203 657 0050 T:+44 (0) 207 186 9004
www.turnerpope.com www.altrescap.com
Damon Heath
T:+44 (0) 207 186 9952
www.shardcapital.com
Alma PR
Justine James
M: +44 (0) 7525 324431
wres@almapr.co.uk
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END
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