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W Resources PLC - Financing, La Parrilla and Spain COVID-19 Update

RNS Number : 0982I
W Resources PLC
30 March 2020
 

 

 

 

 

 

 

 

30 March 2020

 

 

W Resources Plc 

("W" or the "Company")

 

Expanded Finance Facilities, La Parrilla and Spain COVID-19 Update

W Resources Plc (AIM:WRES), the tungsten, copper and gold mining company with assets in Spain and Portugal, provides an update on a £4.0m expanded finance facility and on activity in regard to the temporary shutdown of the La Parrilla mine following the Spanish government declaring a State of Emergency and further tightening the national lockdown. With the unprecedented nature of COVID-19, the Board of W deemed it prudent to establish a financial buffer as it is not currently possible to predict the impact of Government plans with regard to extended lockdowns in Spain.

Finance Facilities

W has secured a £4.0m 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 £500,000 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.

In parallel, the Spanish government, as part of the State of Emergency, has announced it is set to provide guarantees of up to 90% of funds to back companies affected by the pandemic. W has started the process in order to enable it to access grants and government guarantees for additional low-cost Spanish Bank funding to further strengthen its financial position. W is also evaluating the maximum extent of the grants and tax deferrals associated with the Spanish Government financial assistance package.

Spain Lockdown Update

As part of the State of Emergency, the Spanish government has released an update stipulating that non-essential services, including mining, be closed until Thursday 9 April. Based on this, W has already initiated a programme to close the mine and operation in an orderly way to comply with the government decree. This is expected to be completed by 31 March 2020 and a small maintenance crew and security will remain on site.  W has actioned established contingency plans to minimise costs and is looking to access government grants in respect to the shutdown, as outlined above. W will keep the market informed of developments as further government updates are received.

La Parrilla Update

March quarterly production at La Parrilla has increased by over 160% from the December quarter and the team has been able to implement a number of material improvements to the plant during planned shutdowns. A full quarterly report will be provided mid-April following normal end of month reconciliation of production data and completion of the metallurgical and operations review.

Key improvement programmes implemented in February and March include:

·    Construction of an expanded pre-concentrate stockpile area to allow continuous operation of concentrator plant if the jig plant or crusher plant are offline

·    Installation of new hydrosizer to improve classification and operation of shaking tables

·    Installation of a new deslimes circuit to allow 100% of jig thickener underflow to be fed to the concentrator plant increasing jig plant recoveries

·    Rectification of a number of critical items that the contractor did not complete to the standard W would expect. This has led to even greater plant stability and control

In April, the Company will install cyclones on the spiral banks to enable greater control of the density of spiral feed which W expects to significantly increase recoveries.

Michael Masterman, Chairman of W Resources, commented: "In these unprecedented and volatile times it is important to have in place a strong buffer of additional financial resources. The Atlas £4.0m convertible bond facility achieves this outcome and complements the recent equity placement at 0.36p. We are moving to access the Spanish government supported bank financing facilities and other grants which will further strengthen our financial position in these challenging times.

"La Parrilla's production has improved significantly quarter-on-quarter and we intend to make a further substantial step change and increase in production once La Parrilla reopens. We will provide guidance as part of the quarterly report.

"The safety and wellbeing of the W team remains our number one priority. To date, no W Resources personnel have been infected by the Coronavirus, we remain vigilant and the number of people affected by COVID-19 in Extremadura where we operate remains small. We express our deepest sympathies for all those who have lost loved ones in Europe and around the world."

The 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

Michael Masterman

T: +44 (0) 20 7193 7463

www.wresources.com

Grant Thornton UK LLP

Colin Aaronson / Seamus Fricker

T: +44 (0) 20 7383 5100

Joint Broker

Turner Pope Investments (TPI) Ltd

Andy Thacker / Zoe Alexander

T: +44 (0) 203 657 0050

www.turnerpope.com

Joint Broker

Alternative Resource Capital / Shard Capital

Alex Wood

T:+44 (0) 207 186 9004

www.altrescap.com

Damon Heath

T:+44 (0) 207 186 9952

www.shardcapital.com

Alma PR

Justine James

M: +44 (0) 7525 324431

[email protected]

 


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