Big Picture – A Deep Dive Examination of W Resources PLC
W Resources PLC Snapshot
W Resources strategy is to build a European mining company focussed on delivering long term production of tungsten, a key strategic metal with strong market fundamentals.
With a focus on building a world class tungsten company, its flagship project, La Parrilla in Spain is one of the world’s largest tungsten mines, which is under development and funded by BlackRock.
Demand for tungsten remains high and with tight supply, W is well positioned to benefit from the continued demand and higher prices, with offtake agreements already in place on La Parrilla. Importantly, the predicted supply shortages are expected to result in upwards trending prices with market forecasts of between US$445/mtu and US$530/mtu by 2023.
La Parrilla is a large scale, low-cost, long life Tungsten and Tin Mine.
The project has an Australasian Joint Ore Reserves Committee (“JORC”) compliant resources total 49 million tonnes (“mt”) at a grade of 998 parts per million (“ppm”) tungsten trioxide (“WO3“) and JORC compliant reserves of 29.8mt at a diluted grade of 931ppm WO3.
With its core infrastructure in place, the site is accessed directly from the highway along a 3km asphalt road and is serviced by electricity and water. Importantly, the mine is located within a short trucking distance from both the Atlantic and Mediterranean ports.
The development towards first ore in Q1 2019 at La Parrilla remains a key focus, now that the financing and key contracts are all in place. Development work is underway targeting first ore and ramp-up in Q1 2019 to mine 2 mtpa of Run of Mine and produce approximately 2,700 tonnes of tungsten concentrate and 500t of tin (Sn) concentrate per annum.
JORC Resource upgrade completed with Maiden JORC Reserves, further underpinning the strong fundamentals of La Parrilla
Key contracts awarded for the Jig & Mill, Concentrator and Crusher.
Financial Investment Decision Report reaffirmed the project as a large, long life, low-cost tungsten and tin mine.
US$35m debt funding completed with BlackRock in February 2018.
Grant of €5.3m from Extremadura Regional Government to W’s 100% owned subsidiary, Iberian Resources Spain SL in March 2018.
Offtake agreements secured with European and US customers.
Régua has a current Australasian Joint Ore Reserves Committee compliant mineral resource of 5.46 million tonnes (“mt”) at a grade of 0.28% tungsten trioxide (“WO3“), with an indicated resource of 3.76mt at a grade of 0.304% WO3.
The Mine is on-track targeting first ore in 2019. Régua will be a low cost Mine as W is able to utilise existing adits and the crushing plant which is already in place. This will increase W Resources tungsten production profile to over 3,800 tpa.
Development & Key Milestones
Régua’s high ROM grade (at greater than 0.3% WO3) and proximity to a crushing facility are likely to prove beneficial to the project economics.
The Régua deposit remains open at depth and on all sides, with significant potential to boost the resource growth to the northwest including a 10m thick tungsten intersection.
In 2015, trench sampling at the Tarouca project showed high-grade tungsten results with 15 out of 126 samples exceeding 0.5% WO3, including 0.8 m at 11.4% WO3 (TTR063). Together with the 15 holes drilled in 2014, this confirms an outstanding exploration target in the north eastern area of the licence.
Development & Key Milestones
In April 2018, the team carried out a month-long RC drilling programme including 29 holes with 1,515 metres of total drilling, completed in depths of 5 to 70 metres. The Company is working towards consolidating the prior exploration programmes with the latest campaign, which was carried out to provide more in depth understanding of several high-grade skarn lenses with a complex geological history.
Intersections are expected from surface to a maximum of 50-metre depth, based on the very distinctive mineralisation at surface. The full assay results are expected to be received in Q3 2018, following which the development team will model the mineralised lenses in order to advance a geological resource at Tarouca.
The outcome of the drilling campaign at Tarouca will assist to further delineate the resource with a view to increasing our overall tungsten resource and production base.
Tarouca is just 45km from Régua and has the potential to enhance and expand the Régua development.
CAA / Portalegre covers a total of 289.75km², and includes the São Martinho Gold Deposit, the Mosteiros gold project and the Assumar gold prospect.
The focus has been on the São Martinho Gold Deposit where a maiden Australasian Joint Ore Reserves Committee (“JORC”) resource was completed by Golder Associates in June 2016 which confirmed an Indicated Resource estimate of 3Mt at 1.04g/t gold, which equates to 111,987oz in contained gold.
Development and Key Milestones
Results from the drilling campaign in 2017 provided very promising results with a thick intersection of over 55m of gold at 2.34g/t. These results provide a solid base to drive extension drilling with the potential for a materially larger resource.
In Q2 2018, the Portuguese technical team commenced a 15 hole, 2,000m RC drilling programme with a view to materially increase the JORC resource.
The overall results of the RC drilling campaign will form part of the update for the upgrade to the JORC compliant mineral resource estimate which will be updated once the evaluation work has been completed.
Located close to W’s CAA / Portalegre copper-gold project, the Monforte-Tinoca exploration licence covers 496.19km² and is highly prospective for copper, gold, tin and tungsten exploration and development.
The Monforte-Tinoca Copper exploration licence, which contains the Tinoca and Azeiteiros former copper mines, was granted to W in July 2016 and this project will be advanced during 2018.
Development & Key Milestones
Geophysics surveys have been completed using both Induced Polarisation / Electric Resistivity and Transient Electromagnetics methods across the
target Copper zones.
The geophysics surveys are expected to pin point the copper anomaly and extensions of the former high-grade copper mines. RC drilling (1,500m in total) was completed mid-year.
Initial review of copper, tungsten and tin targets will be carried out and drilling activities are planned for late 2018.
Michael Masterman - Chairman
Mr Masterman has an exceptional track record in establishing and financing new resources companies. He is currently CEO of Fortescue Metal Groups, FMG Iron Bridge iron ore company and recently completed the US$1.15bn sale of a 31% interest in the project to Formosa Plastics Group. Following 9 years at McKinsey, and 8 as Executive Director of Anaconda Nickel, he has been a founding shareholder at Fortescue, Po Valley Energy and Atacama Metals.
Byron Pirola - Non-Executive Director
Director of Port Jackson Partners Limited, a Sydney based strategy management consulting firm. Prior to joining Port Jackson Partners in 1992, Byron spent six years with McKinsey & Company working out of the Sydney, New York and London Offices and across the Asian Region. He has extensive experience in advising CEOs and boards of both large public and small developing companies across a wide range of industries and geographies. Byron is a Non-Executive Director of Po Valley Energy Limited.
David Garland - Non-Executive Director
David is the former General Counsel, Secretary and Chief Compliance Officer of Dominion Petroleum Limited (an oil and gas exploration company then listed on the LSE). Before joining Dominion, he had practiced as a barrister for 18 years from Brick Court Chambers, a leading commercial barristers’ chambers in London. David was a founder, and is currently General Counsel and a director, of Atacama Metals Holdings Limited, a private Hong Kong registered copper exploration company, with mining concessions and interests, in the Atacama Desert in Chile.
Fernando de la Fuente - Technical Advisor
Fernando holds a B.Sc. in Geology and a MSc in Geology from the University of Granada in Spain and has over than 38 years experience in the Exploration and Mining Geology industry in Europe, Africa and North America and Latin America. He is also a member of the Spanish College of Geologists (Number 49), the Spanish Society of Mineralogy, founder member of the Spanish Society of Geology, member of the Spanish Association of Applied Geology to Mineral Deposits, member of the Society for Mining, Metallurgy and Exploration, Inc., member of PDAC. He is Managing Director and main shareholder of Fernando de la Fuente Consultores, S.L. a mining exploration and geological consulting company with projects in Burkina Faso, Canada, Mozambique, Morocco, Portugal, Dominican Republic and in Spain for several international and Spanish companies and for gold, PGM, base metals, tungsten, tin, tantalum-lithium-caesium, uranium, industrial minerals, dimension stones. Hydrogeological projects. Geotechnical studies. He was the Regional Manager for Anglo American Corporation of South Africa in West Africa and has also worked for Rio Algom and Phelps Dodge. Fernando is a “qualified technical person” in respect of the AIM Rules for Companies.
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