W Resources expects 1H21 La Parilla production to be ‘highest to date’

Francesca Morgan
Vox Newswire
10:41, 3rd March 2021

W Resources (WRES  FOLLOW) told investors that it has seen ‘improved efficiency and increased production’ of tin and tungsten concentrate at the Company’s La Parrilla Mine in Spain.

The tungsten, tin and gold mining company said that following the completion of the Plant Improvement Programme at La Parrilla, concentrator plant recovery for tungsten during February was found to be greater than 60%, thereby reaching an all-time high for WRES.

Despite unprecedented rainfall, which has slowed Q1 progress, tungsten and tin concentrate production in 1Q21 and 2Q21 is expected to be ahead of any previously reported quarter. 

The programme was completed within seven months. The Company highlighted to investors that it has delivered ‘significant plant improvements, enhanced the workflow, improved efficiency and has increased production of tungsten and tin concentrate from the mine.’

It said this is evidenced by the rise in production of concentrate from July 2020 onwards, initially increasing on a pro-forma basis in 3Q20 and then in absolute terms in 4Q20.

The final phase of the programme included a planned closure in late January to enable the final stages of the Programme to be implemented. While this was initially planned as a four-week closure, the Group accelerated the process to reduce this period to just two weeks.

In the past two months, the Group has successfully completed and shipped two shipments of 20t of tungsten concentrate with one shipment shipped on 1 March. This shipment has benefited from a 26% increase in the net price received vs the previous tin shipment.
Another shipment of 20t of tungsten concentrate is due to be shipped on 8 March 2021.

W Resources decided to delay the recommencement of production at the La Parrilla Mine until mid-February due to unseasonal weather conditions which saw the Extremadura region of Spain receiving the highest amount of rainfall recorded in the last seven years. 

Notwithstanding this hurdle, the Group said the success of the Plant Improvement Programme has been reinforced with expectations of Q1 production being the highest to date.

In order to mitigate further risk here, the management and operations team at La Parrilla are taking steps to lower the water level and regain access to the higher-grade ore and it is envisioned that these steps will create a permanent solution covering the life of the mine.

It is frustrating that as we find ourselves on the cusp of seeing significant increases in the production of concentrate with much improved plant processing, we are denied access to our highest-grade ore due to high water levels,” said Chairman, Michael Masterman.

He added, “The team is working hard to resolve this and as soon as the water levels fall and we can safely access our higher-grade ore, we can then start to ramp-up to more significant growth in concentrate production."

With a stockpile of mid and lower level grade ore on site, the Company told investors that processing at La Parilla will continue. It added that the amount of concentrate expected to be produced at the site in Q1 and Q2 2021 will be ahead of any previously reported quarter.

WRES noted that the prices for its concentrate have remained robust this year, in particular the price of tin which sat in excess of US$26,100/t last week. The Company highlighted that the solid tin price had already directly benefited the sale of its latest 20t tin shipment. 

Tungsten remains robust at cUS$250/mtu which the Company said further highlights the strength of its low-cost production, which it stated had benefited recent tungsten shipments. This is also expected to benefit the Group’s further shipments later in Q1.

Investors will be delighted that, despite unprecedented rainfall, tungsten and tin concentrate production in Q1 and Q2 is expected to be ahead of any previously reported quarter while the price of tin and tungsten remain robust and further highlights the strength of La Parilla’s low-cost production. 

Shares in W Resources were trading 2.70% higher this morning following the news of the completion of the plant improvement programme at the Group’s La Parrilla mine in Spain.

WRES price chart

Reasons to Follow WRES

Exclusive Focus on Tungsten, a Key Strategic Metal

W Resources’ strategy is a European mining company focused on delivering long term production of Tungsten, a key strategic metal with ‘strong market fundamentals.’

The company said 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.

World Class Tungsten Projects

W Resources has three tungsten projects: La Parrilla in Spain, Régua and Tarouca in Portugal and the CAA Portalegre gold/copper project in Portugal.

Its flagship project, La Parrilla, is one of the world’s largest tungsten mines, which commenced production in November 2019 and is funded by BlackRock. The project is a large, low-cost mine which is expected to deliver significant earnings growth in 2020.

With tungsten demand high and with tight supply, W said it is well positioned to benefit from this demand and higher prices, with offtake agreements already in place on La Parrilla. 

Improving Production Metrics

Tungsten and tin concentrate production in 1Q and 2Q21 at the Company’s La Parilla mine is expected to be ahead of any previously reported quarter despite unprecedented rainfall.

The Programme at La Parilla has delivered significant plant improvements, enhanced the workflow, improved efficiency and has increased tungsten and tin concentrate production, something evidenced by the increase in production of concentrate from July 2020 onwards.

The Company said the price of tungsten and tin further highlights the strength of its low-cost production, which benefited recent tungsten shipments and those to be shipped later in Q1.

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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