TIDMWRES
RNS Number : 7889P
W Resources PLC
21 October 2021
21 October 2021
W Resources Plc
("W" or the "Company")
Q3 2021 Production Report
W Resources Plc (AIM:WRES), the tungsten, tin and gold mining
company with assets in Spain and Portugal, announces its Q3 2021
quarterly production report for the La Parrilla mine in Spain, a
period in which the Company achieved record tungsten recovery
rates, grades and production.
Q3 Highlights
-- Tungsten recovery rate of 58% up from 47% in Q2 2021 and
tungsten concentrate recovery grades of 66.7% up 3% on Q2 2021
-- Tungsten production of 168.3 tonnes ("t") up 58% on Q2 2021
-- 11 shipments made - nine tungsten concentrate shipments
(180t) and two tin concentrate shipments (40.8t)
-- Construction of the second water dam underway with target completion in November 2021
-- Robust commodity pricing with tungsten and tin increasing in the period
-- Plant utilisation remains high at 87.1% compared to 88.2% in Q2 2021
-- Moved to a 24 / 7 operation on 7 September 2021
Key Metrics
-- A total of 279,196t of Run of Mine ("ROM") ore fed to the La Parrilla plant in Q3 2021
-- Total tungsten and tin concentrate production of 192.4t
-- Tungsten ("WO(3) ") concentrate production of 168.3t
-- Tin ("Sn") concentrate production of 24.1 dry metric tonnes ("dmt")
La Parrilla Production Summary
Whilst Q3 2021 recorded a number of record performance
milestones, production was impacted by a number of challenges which
resulted in an estimated production loss of circa 40t of tungsten
concentrate, including:
-- A number of power outages were caused by technical problems
with the LNG generators. This has been resolved by the supplier
after isolating the cause of the stoppages. To mitigate against
future power outages the Company is installing an additional
connection to the grid power supply. This is expected to be
finalised in 2022 and will supply sufficient electricity to power
the entire plant.
The pro-rata below adjusts for the variance in production
days.
Q3 2021 Q2 2021 Variance Variance
La Parrilla Production Actual Actual Comparison Pro rata
Summary
--------------------------- --------- -------- ----------- ---------
WO(3) contained metal
(mtu) 11,229 6,919 62.3% 18.4%
Sn contained metal (dmt) 12.5 12.4 0.8% -26.4%
Total contained metal
(dmt) 124.8 81.6 53.0% 11.6%
--------------------------- --------- -------- ----------- ---------
('dmt' - dry metric tonnes, 'mtu' - metric tonne unit (1 mtu =
10kg of contained metal))
Michael Masterman, Chairman of W Resources , commented: "Q3 2021
was our best performing quarter to date and we expect to see this
growth continue as we head towards the end of the year.
Notwithstanding a number of challenges towards the end of the
quarter, the result is testament to the management team at the La
Parrilla mine which reacted quickly to minimise any disruption.
"In September, the Extremadura region of Spain, where the La
Parrilla mine is located, experienced torrential rain fall for a
period of time. Although the mine continued to work, production did
slow due to the wet feed being fed into the plant. The team at La
Parrilla is looking to introduce a silo to hold a minimum of one
weeks' supply of dry stock which should negate the problems caused
by similar flash flooding.
"Work at the mine has continued with new staff recruited and the
introduction of a 24 / 7 operation seeing activities increase
throughout the mine. In Q3 2021, work commenced on the second water
dam which we expect will be completed in November 2021 and will
serve to protect the mine from further water issues.
"Work continues apace and the La Parrilla team has a clear focus
on increasing production and efficiencies as the reality of
continuous production becomes the norm. "
Q3 2021 Overview
The final phase of the project to provide a permanent solution
to the water issues at La Parrilla, comprising of a second dam, is
currently underway and is expected to be completed in November.
The recovery rate for tungsten during Q3 2021 was 58%, the
highest to date for any quarter notwithstanding further work is
needed to improve tin recoveries.
ROM feed increased to 279,196t for the quarter, another record
and up 21% on Q2 2021.
11 shipments of concentrate were made during Q3 2021, almost
doubling the number of shipments made in Q2 2021.
Q3 2021 Q2 2021 Variance Variance
La Parrilla Production Actual Actual Comparison Pro rata
Summary
----------------------------- -------- -------- ----------- ---------
ROM feed: tonnes mined
(wmt) 279,196 231,613 21% -12%
Strip ratio 3.53 2.89 22%
Jig plant: tonnes processed
(dmt) 207,327 173,901 19% -13%
WO(3) feed grade (ppm) 934 855 9%
WO(3) recovery (%) 58% 47% 23%
WO(3) concentrate (dmt) 168.3 106.4 58% 15%
WO(3) concentrate grade
(%) 66.7 65.0 3%
WO(3) contained metal
(mtu) 11,229 6,919 62% 18%
Sn feed grade (ppm) 263 259 2%
Sn recovery (%) 23% 27% -15%
Sn concentrate (dmt) 24.1 23.8 1% -26%
Sn concentrate grade
(%) 51.9 51.9 0% -27%
Sn contained metal (dmt) 12.5 12.4 1% -26%
Total concentrate (dmt) 192.4 130.2 48% 8%
Total contained metal
(dmt) 124.8 81.6 53% 12%
------------------------------ -------- -------- ----------- ---------
Recovery
Tungsten recovery increased by 23% during Q3 2021, rising from
47% to 58%, although tin recovery fell by 15% from 27% to 23%.
Health and Safety
During the period there were three serious and one minor
accident and three reported Covid-19 incidences. The Company
believes its robust measures for controlling entry to and from the
mine help in reducing Covid-19 events. Additional training is
always provided to employees following serious accidents at the
mine.
Plant Utilisation
Plant utilisation decreased to 87% slightly down from 88% in Q2
2021 - adversely impacted by the number of power outages
experienced during the quarter.
Shipments
Nine shipments of tungsten concentrate totalling 180t and two
shipments of tin concentrate totalling 40.8t were completed in Q3
2021.
Q3 2021 Q2 2021 Variance Variance
La Parrilla Shipment Actual Actual Comparison Pro rata
Summary
---------------------- -------- -------- ----------- ---------
Tungsten concentrate
(t) 180.0 100.0 80% 31%
Tin concentrate (t) 40.8 19.3 111% 54%
---------------------- -------- -------- ----------- ---------
Commodity Pricing
European ammonium paratungstate ("APT") pricing remains strong
and has further increased to US$315-320 as at 15 October 2021 -
Fastmarkets MB.
The LME Tin price continues to strengthen reaching a three-month
forward price of US$37,875 per tonne as per Fastmarkets MB, 14
October 2021.
Production Guidance
The Company is leasing a water treatment plant to improve water
quality in the feed to the process plant and expects this measure
to reduce maintenance issues and improve productivity.
Associated maintenance issues and supply chain bottlenecks for
replacement parts have led to lower plant availability and as a
result W Resources has adjusted its full year production guidance
to between 650t and 750t of concentrate.
The Company expects Q4 2021 production to be greater than Q3
2021 production. However, production volumes will not reach the T2
run rate until Q1 2022.
The months of August and September were both EBITDA positive for
W's operating subsidiary Iberian Resources Spain ("IRS") and the
Company firmly expects Q4 2021 to be EBITDA positive as well for
IRS with the mine at La Parrilla increasing production as the
quarter progresses.
Employees
The number of staff employed at La Parrilla mine as at 30
September 2021 was 124 compared to 90 as at 30 June.
The historic La Parrilla mine production summary is as
follows:
La Parrilla Historic Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021
Production
Summary Actual Actual Actual Actual Actual Actual Actual
----------------------- -------- -------- -------- -------- -------- -------- --------
No. of working days 39 52 45 54 74
ROM feed: tonnes
mined (wmt) 273,656 253,256 171,454 261,841 196,094 231,613 279,196
Strip ratio 1.07 0.58 1.38 1.19 5.13 2.89 3.53
Jig plant: tonnes
processed (dmt) 240,926 228,060 148,417 236,677 163,866 173,901 207,327
WO(3) feed grade
(ppm) 800 845 857 943 744 855 934
WO(3) recovery (%) 17% 16% 30% 31% 32% 47% 58%
WO(3) concentrate
(dmt) 58.9 47.6 54.7 100 63.5 106.4 168.3
WO(3) concentrate
grade (%) 56.1 57.4 69.8 67.0 61.6 65.0 66.7
WO(3) contained metal
(mtu) 3,306 2,756 3,820 6,698 3,916 6,919 11,229
Sn feed grade (ppm) 282 307 181 321 228 259 263
Sn recovery (%) 22% 25% 37% 26% 44% 27% 23%
Sn concentrate (dmt) 23.3 41.2 22.9 33.4 28.9 23.8 24.1
Sn concentrate grade
(%) 51.9 48.5 42.7 56.3 56.6 51.9 51.9
Sn contained metal
(dmt) 12.1 20.0 9.8 18.8 16.3 12.4 12.5
Total concentrate
(dmt) 82.2 88.8 77.6 133.4 92.4 130.2 192.4
Total contained metal
(dmt) 45.2 47.6 48 85.8 55.5 81.6 124.8
----------------------- -------- -------- -------- -------- -------- -------- --------
Shipments
The historic tungsten and tin concentrate shipments from the La
Parrilla mine are as follows:
Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021
Actual Actual Actual Actual Actual Actual Actual
---------------------- -------- -------- -------- -------- -------- -------- --------
Tungsten concentrate
(t) 30.1 58.9 62.1 100.2 59.2 100.0 180.0
Tin concentrate
(t) 20.2 20.6 38.1 26.1 20.0 19.3 40.8
---------------------- -------- -------- -------- -------- -------- -------- --------
The information contained within this announcement is deemed to
constitute inside information as stipulated under the retained EU
law version of the Market Abuse Regulation (EU) No. 596/2014 (the
"UK MAR") which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018. The information is disclosed in accordance
with the Company's obligations under Article 17 of the UK MAR. Upon
the publication of this announcement, this inside information is
now considered to be in the public domain.
Enquiries:
W Resources Plc Grant Thornton UK LLP
Paul Hailes Colin Aaronson / Harrison Clarke
investor@wresources.com / Lukas Girzadas
www.wresources.com T: +44 (0) 20 7383 5100
Alternative Resource Capital / Shard Alma PR
Capital Justine James
Alex Wood M: +44 (0) 7525 324431
T:+44 (0) 207 186 9004 wres@almapr.co.uk
www.altrescap.com
Damon Heath
T:+44 (0) 207 186 9952
www.shardcapital.com
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