--ADDS SHARE PRICE, BROKER COMMENT AND CHAIRMAN QUOTE---
W Resources (LON:WRES) shares surged over 18% as it revealed it had passed a “major milestone” in shipping 39 tonnes of tungsten concentrate in October from its La Parrilla tailings operation in Spain.
Four shipments were made in the month generating €470,000 of revenues and demand remains strong for its low impurity product, the company said in a wide-ranging operations update.
“La Parrilla tailings production continues to improve on all dimensions and we are systematically reducing power costs and improving feed systems with tin production planned for the New Year,” said chairman Michael Masterman.
Total output since the plant’s completion now stands at 66 tonnes.
Later this month it will be hooked into the local electricity grid, making for cheaper production, while the new feed equipment will be installed during the next planned shutdown.
W Resources also said it is looking to produce its first tin concentrate in the New Year. This will help enhance revenue generation.
City broker Northland rates the shares a 'buy' and analyst Dr Ryan Long noted that production during September had been 21 tonnes of concentrate - ahead of his expectations of 12 tonnes. Production during October is expected to reach 25 tonnes, in line with the broker's expectations.
The higher production than expected in September has led the broker to increase its production forecast for the year to 115t from 100t but it has maintained its price target.
"W Resources continues to look undervalued and we maintain our BUY rating and price target of 1.5p per share."
The early production from the tailings for W is merely the starter course.
The larger opportunity lies with the La Parrilla mine and Régua, in Portugal, which have tungsten grades and target production rates many times larger than the tailings operation.
"That's where we see the very significant larger production and profit growth coming from," said Masterman, speaking to Proactive Investors.
On the timing of these assets' development, he said La Parilla was probably ahead of Régua .
"We are looking at getting approvals for the fast-track mine in 2015 and we think we'll be able to execute development of that quickly into 2016."
As reported previously, the fast track mine at La Parrilla will be in an area adjacent to the current pit, utilising existing tailings and power, water and road infrastructure.
Also today, the company said it also plans exploration drilling in 2015 on the “exceptional” Tarouca target, 20km south of Régua.
Finally, it said an update on the Portalgere copper-gold project in Portugal will be given once the latest trenching results have been received.
Shares in the company were lifted 18.27% to 0.615p.