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W Resources PLC - Final Results

RNS Number : 4516O
W Resources PLC
01 June 2020
 

 

 

 

 

 

1 June 2020

 

 

W Resources Plc 

("W" or the "Company")

 

Final Results for the Year Ended 31 December 2019

W Resources Plc (AIM:WRES), the tungsten, tin and gold mining company with assets in Spain and Portugal, announces its audited financial results for the year ended 31 December 2019.

HIGHLIGHTS

La Parrilla, Tungsten and Tin, Spain

·        Construction completed on this world class tungsten and tin project in September 2019.

·        Initial production of the T2 stage production commenced in November 2019.

·        Production in Q4 2019 built at a slower pace than anticipated due to early stage plant challenges, which continue to be resolved.

·        Production in Q1 2020 was reported on 17 April 2020, recording an increase in tungsten metal production to 45.2 tonnes (combined tungsten and tin).

·        Due to the COVID-19 pandemic, the timing of the €5.3m Grant from the Junta de Extremadura is to be confirmed with the local Government needing to prioritise resources in response to the ongoing pandemic.

Régua Tungsten Project, Portugal

·        Régua has significant synergies with La Parrilla as it has materially lower capital costs and will increase La Parrilla's final concentrate production.

·        Mining operations commenced in March 2020 and is currently paused due to the challenges presented by COVID-19.

COVID-19

The recent COVID-19 pandemic has meant that 2020 thus far has been a very challenging time for Spain and Portugal as it has for the rest of the world. Our priority has remained the health and safety of our personnel and we continued to work hard at both our operational sites in Spain and Portugal to review and maintain our priorities on this matter in relation to our staff and contractors.

In order to mitigate against risk of further impacts on production as a result of this pandemic, W has secured additional funding to ensure the Company has a strong buffer in these unprecedented times.

Chairman of W, Michael Masterman commented: "Whilst 2019 was a very challenging year with the core priority being completion of the La Parrilla plant and commencement of production and ramp-up, La Parrilla is in operation and is starting to reap the benefits from the substantial plant improvement programme executed over the last 3 months. The bulk of the operational plant improvements have been installed and are now operational. We are of the view that the plant can progressively increase both recoveries and utilisation to increase production to design capacity."

 

Enquiries:

W Resources Plc

Michael Masterman

T: +44 (0) 20 7193 7463

www.wresources.com

Grant Thornton UK LLP

Colin Aaronson / Jen Clarke / 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

wres@almapr.co.uk

 

 

 

 

APPENDIX 1 - JORC COMPLIANT MINERAL RESOURCE ESTIMATES

 

La Parrilla Proven and Probable Mineral Reserves - JORC 2012

 

 Tonnes

'000

Grade

WO3 (ppm)

 Metal Content

 

Grade

 

 Metal Content

 

 

WO3 (t)

Sn (ppm)

Sn (t)

Proven

 

1,177

995

1,171

251

295

Probable

 

28,577

928

26,511

111

3,156

Total

 

29,754

931

27,683

116

3,451

Note: The La Parrilla mine reserves are set out in the following table based on the optimal LOM Pit. Estimate for La Parrilla Deposit using a 330 ppm WO3 Cut-Off Grade and 5% dilution. All tonnes quoted are dry tonnes. Differences in the addition of tonnes to the total displayed is due to rounding.

The La Parrilla JORC-compliant mineral reserves update was fully disclosed, with JORC Table 1 in a Company news release on 14 June 2017. Mr Adén Muñoz of AYMA Mining Solutions SL, a Spanish Mining Engineering company based in Seville was the Competent Person responsible for the La Parrilla Proven and Probable Mineral Reserves. The mineral reserves are based on indicated and measured resources prepared by Golder Associated in March 2017 (RNS, 11 May 2017).

 

Mineral Resources for La Parrilla Deposit Using a 400 ppm WO3 Cut-Off Grade within Mineralised Domains - JORC 2012

Classification

 

Tonnage (Mt)

WO3 (ppm)

Sn (ppm)

Measured

 

1

1,115

278

Indicated

 

35

1,004

110

Inferred

 

13

974

97

 

49

998

110

The La Parrilla JORC-compliant mineral resource update was fully disclosed, with JORC Table 1 in a Company news release on 11 May 2017. Mr Andrew Weeks (Golder Associates Pty Ltd) was the Competent Person responsible for the Mineral Resource Estimate for the La Parrilla deposit.

 

Régua JORC Compliant Mineral Resource Estimate reported at a 0.1% WO3 cut-off grade

Category

 

Tonnes

WO3%

WO3 metal (ky)

Indicated

 

3.74mt

0.28

10.6

Inferred

 

0.72mt

0.21

1.5

Total

 

4.47mt

0.27

12.1

The Régua JORC compliant mineral resource update was fully disclosed, with JORC Table 1 in a Company news release on 5 February 2020. Mr Andrew Weeks (Golder Associates Pty Ltd) was the Competent Person responsible for the Mineral Resource Estimate for the Régua deposit.

 

São Martinho Maiden JORC Compliant Mineral Resource Estimate

Category

 

Tonnes

Au (g/t)

Au Content (Oz)

Cut-off

Indicated

 

0.48 mt

1.03

17,363

0.5 g/t Au

Inferred

 

2.56 mt

1.05

94,624

0.5 g/t Au

Total

 

3.04 mt

1.04

111,987

0.5 g/t Au

The São Martinho maiden JORC-compliant mineral resource update was fully disclosed, with JORC Table 1 in a W Resources Plc RNS announcement on 8 June 2016. Mr Jorge Peres (Golder Associates Pty Ltd) was the Competent Person responsible for the Mineral Resource Estimate for the São Martinho deposit.

  

W RESOURCES PLC

CHAIRMAN'S STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2019

 

W Resources' focus for 2019 was to complete the construction of its world class La Parrilla Tungsten and Tin Project in Spain, which at full production will deliver 2,500tpa of tungsten and is anticipated that this will deliver EBITDA of c.US$20.0m per annum (T2 stage). Construction of the La Parrilla plant was completed in September 2019 and production commenced in late November 2019. La Parrilla, with its large-scale production capacity and low-cost structure will form the base of our cash generation and expansion in the year ahead.

Building a mine of this scale comes with its challenges and whilst the timeline to achieve this was delayed in 2019, the team has worked tirelessly to ensure the best outcome in each phase of development. This is now gaining traction for 2020 as we build towards reaching target production and delivering improved EBITDA in the year ahead.

In this environment of unprecedented market uncertainty, our main priorities in 2020 are to take La Parrilla to design capacity by the end of 2020 and to add an initial stream of tungsten production from our newly opened Régua trial mine to the La Parrilla core production base.

Planning is in place to install ore sorters at La Parrilla to effect an increase in production capacity of the current T2 - 2 million tonne per annum plant. We will gradually take the expansion to T3.5, demonstrating commercial operations in incremental steps prior to substantially expanding production capacity.

COVID-19 and Safety

The recent COVID-19 pandemic has meant that 2020 thus far has been a very challenging time for Spain and Portugal as it has for the rest of the world. Our priority has remained the health and safety of our personnel and we continued to work hard at both our operational sites in Spain and Portugal to review and maintain our priorities on this matter in relation to our staff and contractors. On 14 March 2020, Pedro Sánchez, Spain's Prime Minister, declared a national State of Emergency, which was subsequently updated stipulating with effect from 31 March 2020 that non-essential services, including mining, be closed until Thursday 9 April. The closure of non-essential services which limited operations was subsequently lifted and production at La Parrilla in Spain recommenced, following key works to improve the circuit.

In order to mitigate against risk of further impacts on production as a result of this pandemic, W has secured additional funding to ensure the Company has a strong buffer in these unprecedented times.

Our strong safety performance continues with no Lost Time Injuries during the last 12 months and a total recordable injury frequency rate ("TRIFR") of 16.1 per million hours worked, which is well below the Spanish mining industry average of 45.2. The health and safety of our all employees, contractors and customers remains an absolute priority and we are working hard to ensure we implement all measures necessary to maintain this in the current pandemic.

TUNGSTEN & TIN

La Parrilla - Spain

La Parrilla is a large-scale, low-cost, long-life tungsten and tin project, located approximately 310km southwest of Madrid. It has Australasian Joint Ore Reserves Committee ("JORC") compliant resources totalling 49 million tonnes ("mt") at a grade of 0.1% of tungsten trioxide ("WO3") and JORC compliant reserves of 29.8mt (as shown in Appendix 1 of the Consolidated Financial Statements).

The first phase of the ramp-up is to reach the target to mine 2mtpa of ROM and produce approximately 2,500 tonnes ("t") of tungsten concentrate and 200t of tin ("Sn") concentrate per annum ("T2").

Production at La Parrilla is building, albeit not at the pace we had anticipated due to early stage plant challenges having an impact on production levels for Q1 2020 and the restrictive conditions during the COVID-19 State of Emergency which have necessitated mine and plant closure and operations limitation on equipment sourcing and day-to-day safe personal management which is, of course, our main priority. Significant progress has been made at the plant to address and rectify these challenges, including implementation of 15 plant improvement initiatives at a total cost of €300,000. The improvements are directed at significantly increasing overall recovery and reducing unplanned downtime. We expect to see these changes translate into significantly increased daily and monthly production outcomes.

 

 

W RESOURCES PLC

CHAIRMAN'S STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2019

 

The mining and processing operations have expanded in Q1 2020 with key initiatives implemented including construction of a pre-concentrate stockpile area to allow continued operation of the concentrator plant when the jig or crusher plants are down, installation of deslime cyclones ahead of the fines circuit and a hydrosizer ahead of the shaking tables which are complete and operational.

We are mindful that production levels at the start of the year are not where we or our stakeholders expected them to be, however we are still very much in the early stages of the ramp-up and the team is well set to achieve stronger results in the June quarter resulting from plant improvement initiatives implemented in Q1 2020.

The increase in tungsten and tin production demonstrates progress in a very difficult external environment and we remain focussed on the works in hand and are confident of making the solid progress needed in order to reach design capacity.

Notwithstanding these challenges, we are delighted to have completed construction of this impressive large-scale, long-life tungsten and tin project and to now be focussing on the matter in hand of building production at this world class mine.

Grant Update

In March 2018, the Junta de Extremadura in Spain awarded a grant of €5.3m to W's 100% owned subsidiary, Iberian Resources Spain SL. The conditions set, in order to be able to receive the Grant, were a minimum investment in plant and equipment of €16.6m and the creation of at least 20 full time positions. With these conditions successfully met, W provided the documentation to formally apply to receive this Grant. Timing of the Grant is yet to be confirmed with the local Government needing to prioritise resources in response to the ongoing COVID-19 pandemic. The team continues to enjoy strong on-the-ground relationships and appreciates the Government's support.

Tungsten and Tin sales in a challenging global environment

The COVID-19 crisis has created challenges across global tungsten and tin markets in terms of both logistics of delivery and in our customers' market environments. In these market conditions, we continue to sell and deliver all our product to our offtake partners and have broadened our distribution capacity. At times during the peak of the crisis, transportation logistics have been challenging to manage and therefore movement of product has been slower than it has been previously, but in credit to the team we have solved these issues in a timely way.

Importantly the quality of our Tungsten and Tin concentrate consistently meets or exceeds customer offtake requirements and we have seen consistent increases in concentrate quality and, in producing up to 65% WO3 from the plant, we have shown that we are comfortably able to exceed our benchmark grades of 60%.

PORTUGUESE PROJECTS

Régua Tungsten Mine

This high-grade, development-ready tungsten project with low capital cost has a trial mine licence, and an updated JORC compliant mineral resource of 4.47Mt at a grade of 0.27% WO3, including an indicated resource of 3.74mt at a grade of 0.28% WO3, which was completed by Golder Associates Pty Ltd ("Golder") in January 2020.

As W's second mine to come on stream, following the start of production at La Parrilla in November 2019, Régua has significant synergies with La Parrilla as it has materially lower capital costs and will increase La Parrilla's final concentrate production.

Mining operations at Régua commenced early March 2020 with the commencement of mining in the first of two adits with skarn ore zones intersected in the initial development. However, following an extension in Portugal of COVID-19 related restrictions, mining activity has been paused. Plant design and procurement activities are near completion in advance of construction activities which have been rescheduled to later in the year after the COVID-19 crisis has hopefully passed. As a result of the requirement to pause operations, an application to extend the period of the trial mine licence has been submitted to the Portuguese mining authorities.

 

 

W RESOURCES PLC

CHAIRMAN'S STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2019

 

With ore haulage and crushing contracts in place with Francisco Pereira Marinho Imãos SA ("FPMI"), once mining recommences later this year, ore from Régua will be hauled 27km to the FPMI crushing plant and crushed to a range of 5-10mm. Importantly, as part of the service contract, FPMI will use the waste ore for rehabilitation of their existing quarry providing local environmental benefits. The estimated crushing and haulage cost is cUS$40-45/mtu and W will pay €50,000 to expand access roads for haulage.

Tarouca Exploration

While the development focus has been on Régua we have also applied for a new exploration licence at Tarouca. We expect to be able to tie in operations at Tarouca to the Régua mining and processing operations once the updated licence is granted.

CAA Portalegre - Gold

São Martinho currently has a JORC 2012 gold resource of over 110,000oz. Results from the drilling campaigns in 2017 and 2018 provided a solid base to drive extension drilling with the potential for a materially larger resource.

We have advanced São Martinho through a successful drilling programme and submitted an application for a trial mine and gold production licence in September 2018. Although the COVID-19 crisis and associated state of emergency in Portugal has further delayed the final approval process, we expect the trial mine licence to be granted in due course. The trial mine licence, once granted, will allow W to pursue a drilling programme to expand the resource and resolve the geological interpretations of a flat lying structure (Golder) and a deeply dipping structure (SRK) which have partially arisen due to the combination of structural complexity and multistage mineralising events.

Importantly, a trial mine is a key level of licence tenure and will provide the authority to mine shallow ore and produce gold on a pilot basis. We will actively explore opportunities to bring in Joint Venture parties and monetise the gold discovery in 2020. New expenditure on this project is pending grant of the trial mining licence.

Finance

Whilst completion of the new plant at La Parrilla was later than planned, it has remained our priority to ensure W has had a strong buffer of additional financial resources in place to mitigate against the resulting delayed production and also to ensure W remains resilient in the year ahead with the uncertainty created by COVID-19.

In the FY19, the Company secured a €3m loan facility with Caja Rural de Extremadura to provide an advance of funding against the €5.3m grant awarded by the Junta de Extremadura ("Grant"). This loan had an interest rate of 1.75% per annum for a term of 15 months, although subsequent to 31 December, 2019, on 31 January 2020, Iberian Resources Spain S. L. signed a loan agreement for €5m with Banco Santander, S.A ("Santander") which repaid the €3m loan from the Caja Rural de Extremadura. The Santander facility interest rate is 3% per annum, and this loan is now secured by a pledge over the rights to the Grant funds. As stated above, the timing of receipt of the Grant is to be advised by the local Government, which is currently and understandably prioritising its efforts towards coping with the COVID-19 pandemic.

In August 2019, BlackRock Financial Management Inc. ("BlackRock") agreed to capitalise an additional six months of interest payments of the BlackRock term loan, which equated to US$1.29m, and was added to the final loan balance. Furthermore, in December 2019, BlackRock increased its existing loan facility by US$5 million. The additional facility and the roll up of interest (PIK) increased the total outstanding BlackRock loan balance to US$50.5m at 31 March 2020. 

During 2019, W raised a total of £2.57m in equity funding. In September, the Company completed a €1m Placing at 0.5p per Ordinary Share, a premium to the share price, from supportive private Spanish investors.

In November 2019, the Company secured a funding package to raise c€2.78m which comprised a first tranche of €1.358m secured through: an equity placement of £289k (€330k) at 0.40p, loans from Directors of £344k (€392k); and Blackrock agreed that an additional 50% of the November interest payment, amounting to US$700k (€636k) could be added to the existing debt facility (PIK - payment in kind). Subsequent to this, in January 2020 the short-term loans provided by three of W's directors were converted into ordinary shares at a price of 0.307p per Ordinary Share.

 

 

W RESOURCES PLC

CHAIRMAN'S STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2019

 

As part of the second tranche, the Company completed a Placing to raise £360,000 at a price of 0.40p per Ordinary Share to a new Spanish investor in addition to securing a new €500,000 revolving credit facility with leading Spanish Bank; CaixaBank, S.A.

Tungsten and Tin

Tungsten and Tin demand and supply has been disrupted by the COVID-19 crisis.

Given the severity of the crisis, Tungsten prices have been relatively solid and sit at US$215-225, which is 22% down on budget expectations. There have been substantial shutdowns of capacity in China, the world's largest producer of tungsten and as the world economy comes out of the various lockdowns we do expect continued price volatility and a boost in global demand although it is too early to judge the supply/demand balance for the rest of 2020.

Tin prices on the London Metal Exchange started 2020 trading at US$17,125 per metric ton, and moved in an upward trend until January 2020, when the coronavirus outbreak took over news headlines and the price came under pressure. Notably, the market view is that whilst tin plays a pivotal role in all modern technology and has a large role to play in the electric vehicle market, it is the low-cost producers who will continue to reap the benefits due to the unpredictable nature of the COVID-19 pandemic. With a more stable environment, market forecasts expect tin to stabilise in the mid US$20,000 per metric ton. (source: Investing News).

Outlook

2019 was a very challenging year with the core priority being completion of the La Parrilla plant and commencement of production and ramp-up.

There is no question, however, that the global challenges of 2020 are significantly more difficult, but I believe that our team has responded to them thoughtfully and effectively.

·    States of Emergency in both Spain and Portugal have required short-term closures of both La Parrilla and Régua.

·    Régua mining and construction operations are currently closed pending confirmation from the Portuguese authorities. We expect to recommence mining in Q3 2020.

·    La Parrilla is in operation and is starting to reap the benefits from the substantial plant improvement programme executed over the last 3 months.

·    Production on the March quarter was reported on 17 April 2020, recording an increase in tungsten metal production to 45.2 tonnes (combined tungsten and tin).

·    During the COVID-19 crisis shut down which came into effect early in June, we have effected substantial improvements in operating capacity which we expect to translate into significant increases in production in the latter stages of the June quarter.

·    The bulk of the operational plant improvements have been installed and are now operational. We are of the view that the plant can progressively increase both recoveries and utilisation to increase production to design capacity.

·    Stock and commodity market conditions will remain volatile and subject to substantial uncertainty.

The team, with the strong support of the Board, continues to execute development well and this is a credit to the calibre of the management team.

 

 

 

________________

Michael Masterman

Chairman

 

 

 

W RESOURCES PLC

GROUP STRATEGIC REPORT

FOR THE YEAR ENDED 31 DECEMBER 2019

 

The directors present their strategic report of the company and the group for the year ended 31 December 2019.

REVIEW OF BUSINESS

The results for the year and the financial position of the Group and the Company at the year-end are as shown in the annexed financial statements.

The Group has incurred a loss after tax of €2,942,000 for the year ended 31 December 2019. This is driven by exchange losses of €653,000 on translation of the US dollar denominated BlackRock Financial Management Inc. loan into Euros at 31 December 2019 and finance costs associated with the BlackRock Financial Management Inc. loan of €1,054,000. An operating loss of €1,244,000 was incurred in the year to 31 December 2019, compared to an operating loss of €899,000 for the year to 31 December 2018.

Detailed reviews of activities, business developments and projects are included within the Chairman's Statement.

PRINCIPAL RISKS AND UNCERTAINTIES

The Group uses various financial instruments. These include cash, convertible loans and various other items, such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Company's operations.

The existence of these financial instruments exposes the Company to a number of financial risks, which are described in more detail below. The Directors review and agree policies for managing each of these risks and they are summarised below. These policies have remained unchanged from previous years.

Price Risk

The Directors consider that the price of tungsten is an area of potential risk. This is reviewed on a constant basis by the Board and Senior Management.

Liquidity Risk

The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.

Currency Risk

The Group principally operates in £ and € and has borrowings in US$. It does not currently consider the risk of exposure to be material. As such the Directors do not currently consider it necessary to enter into forward exchange contracts. This situation is monitored on a regular basis.

ON BEHALF OF THE BOARD:

 

 

 

________________

Michael Masterman

Chairman

 

Date: 1 June 2020

 

 

W RESOURCES PLC

CONSOLIDATED STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

 

 

2019

 

2018

CONTINUING OPERATIONS

Notes

€'000

 

€'000

 

 

 

 

 

Revenue

2

365

 

219

 

 

 

 

 

Cost of sales

 

(343)

 

(219)

 

 

 

 

 

GROSS PROFIT

 

22

 

-

 

 

 

 

 

Operating expenses

 

(498)

 

(77)

Administrative expenses

 

(768)

 

(822)

 

 

 

 

 

OPERATING LOSS BEFORE EXCEPTIONAL ITEMS

 

(1,244)

 

(899)

 

 

 

 

 

Exceptional items

 

-

 

165

 

 

 

 

 

OPERATING LOSS

 

(1,244)

 

(734)

 

 

 

 

 

Finance costs

4

(1,200)

 

(1,082)

Exchange losses

 

(498)

 

(2,423)

Impairment charge

 

-

 

(353)

 

 

 

 

 

LOSS BEFORE INCOME TAX

5

(2,942)

 

(4,592)

 

 

 

 

 

Income tax

6

-

 

76

 

 

 

 

 

LOSS FOR THE YEAR

 

(2,942)

 

(4,516)

 

 

 

 

 

OTHER COMPREHENSIVE INCOME

Items that will not be reclassified to profit or loss:

 

 

 

 

Translation reserve

 

-

 

721

Income tax relating to items that will not be reclassified to profit or loss

 

-

 

-

 

 

 

 

 

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

 

-

 

721

 

 

 

 

 

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

 

(2,942)

 

(3,795)

 

 

 

 

 

Loss attributable to owners of the parent

 

(2,942)

 

(4,516)

 

 

 

 

 

Total comprehensive income attributable to owners of the parent

 

(2,942)

 

(3,795)

 

 

 

 

 

Loss per share expressed in cents per share:

8

 

 

 

Basic

 

-0.05

 

-0.08

Diluted

 

-0.05

 

-0.08

 

 

 

 

 

 

W RESOURCES PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

31 DECEMBER 2019

 

 

ASSETS

 

2019

 

2018

NON-CURRENT ASSETS

Notes

€'000

 

€'000

 

 

 

 

 

Intangible assets

9

31,882

 

26,609

Property, plant and equipment

10

30,103

 

18,551

Investments

11

-

 

-

 

 

61,985

 

45,160

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

Inventories

12

415

 

179

Trade and other receivables

13

6,580

 

6,580

Cash and cash equivalents

14

2,460

 

6,787

 

 

9,455

 

13,546

 

 

 

 

 

TOTAL ASSETS

 

71,440

 

58,706

 

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

 

Called up share capital

15

7,822

 

7,137

Share premium

16

36,658

 

34,418

Share based payment reserve

16

1,622

 

1,622

Merger reserve

16

1,014

 

1,014

Translation reserve

16

-

 

(3,791)

Retained earnings

16

(28,027)

 

(21,294)

 

 

 

 

 

TOTAL EQUITY

 

19,089

 

19,106

 

 

 

 

 

LIABILITIES

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

 

Financial liabilities - borrowings

 

 

 

 

Interest bearing loans and borrowings

18

44,312

 

33,746

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

Trade and other payables

17

3,978

 

5,854

Financial liabilities - borrowings

 

 

 

 

Interest bearing loans and borrowings

18

4,061

 

-

 

 

8,039

 

5,854

 

 

 

 

 

TOTAL LIABILITIES

 

52,351

 

39,600

 

 

 

 

 

TOTAL EQUITY AND LIABILITIES

 

71,440

 

58,706

 

The financial statements were approved by the Board of Directors and authorised for issue on 1 June 2020 and were signed on its behalf by:

 

 

 

________________

Michael Masterman

Chairman

 

Date: 1 June 2020

 

W RESOURCES PLC

COMPANY STATEMENT OF FINANCIAL POSITION

31 DECEMBER 2019

 

 

ASSETS

 

2019

 

2018

NON-CURRENT ASSETS

Notes

€'000

 

€'000

 

 

 

 

 

Investments

11

6,695

 

1,695

 

 

6,695

 

1,695

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

Trade and other receivables

13

63,185

 

51,717

Cash and cash equivalents

14

1,670

 

4,848

 

 

64,855

 

56,565

 

 

 

 

 

TOTAL ASSETS

 

71,550

 

58,260

 

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

 

Called up share capital

15

7,822

 

7,137

Share premium

16

36,658

 

34,418

Share based payment reserve

16

1,622

 

1,622

Merger reserve

16

1,014

 

1,014

Translation reserve

16

-

 

(5,683)

Retained earnings

16

(20,586)

 

(14,207)

 

 

 

 

 

TOTAL EQUITY

 

26,530

 

24,301

 

 

 

 

 

LIABILITIES

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

 

Financial liabilities - borrowings

 

 

 

 

Interest bearing loans and borrowings

18

44,273

 

33,746

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

Trade and other payables

17

747

 

213

 

 

 

 

 

TOTAL LIABILITIES

 

45,020

 

33,959

 

 

 

 

 

TOTAL EQUITY AND LIABILITIES

 

71,550

 

58,260

 

 

The financial statements were approved by the Board of Directors and authorised for issue on 1 June 2020 and were signed on its behalf by:

 

 

 

________________

Michael Masterman

Chairman

 

Date: 1 June 2020

 

W RESOURCES PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

 

 

 

 

 

 

 

Share

 

 

 

 

 

 

 

Called up

 

 

 

 

 

Based

 

 

 

 

 

 

 

Share

 

Retained

 

Share

 

Payment

 

Merger

 

Translation

 

Total

 

Capital

 

Earnings

 

Premium

 

Reserve

 

Reserve

 

Reserve

 

Equity

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 January 2018

6,397

 

(16,778)

 

31,655

 

67

 

1,014

 

(4,512)

 

17,843

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income

-

 

(4,516)

 

-

 

-

 

-

 

721

 

(3,795)

Issue of share capital

740

 

-

 

2,763

 

-

 

-

 

-

 

3,503

Transactions with owners

-

 

-

 

-

 

1,555

 

-

 

-

 

1,555

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 31 December 2018

7,137

 

(21,294)

 

34,418

 

1,622

 

1,014

 

(3,791)

 

19,106

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income

-

 

(2,942)

 

-

 

-

 

-

 

-

 

(2,942)

Issue of share capital

685

 

-

 

2,240

 

-

 

-

 

-

 

2,925

Transfers between reserves

-

 

(3,791)

 

-

 

-

 

-

 

3,791

 

-

Transactions with owners

-

 

-

 

-

 

-

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 31 December 2019

7,822

 

(28,027)

 

36,658

 

1,622

 

1,014

 

-

 

19,089

 

 

W RESOURCES PLC

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

 

 

 

 

 

 

 

Share

 

 

 

 

 

 

 

Called up

 

 

 

 

 

Based

 

 

 

 

 

 

 

Share

 

Retained

 

Share

 

Payment

 

Merger

 

Translation

 

Total

 

Capital

 

Earnings

 

Premium

 

Reserve

 

Reserve

 

Reserve

 

Equity

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 January 2018

6,397

 

(12,562)

 

31,655

 

67

 

1,014

 

(5,491)

 

21,080

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Issue of share capital

740

 

-

 

2,763

 

-

 

-

 

-

 

3,503

Total comprehensive income

-

 

(1,645)

 

-

 

-

 

-

 

(192)

 

 (1,837)

Transactions with directors

-

 

-

 

-

 

1,555

 

-

 

-

 

1,555

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 31 December 2018

7,137

 

(14,207)

 

34,418

 

1,622

 

1,014

 

(5,683)

 

24,301

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Issue of share capital

685

 

-

 

2,240

 

-

 

-

 

-

 

2,925

Total comprehensive income

-

 

(696)

 

-

 

-

 

-

 

-

 

(696)

Transfers between reserves

-

 

(5,683)

 

-

 

-

 

-

 

5,683

 

-

Transactions with directors

-

 

-

 

-

 

-

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 31 December 2019

7,822

 

(20,586)

 

36,658

 

1,622

 

1,014

 

-

 

26,530

 

 

W RESOURCES PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

 

 

2019

 

2018

Cash flows from operating activities

Notes

€'000

 

€'000

 

 

 

 

 

Cash generated from operations

1

(4,592)

 

5,989

Interest paid

 

(146)

 

(109)

Finance costs paid

 

(426)

 

(5,311)

Tax paid

 

-

 

(64)

Net cash from operating activities

 

(5,164)

 

505

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Purchase of intangible fixed assets

 

(7,343)

 

(10,440)

Purchase of tangible fixed assets

 

(4,235)

 

(14,315)

Net cash from investing activities

 

(11,578)

 

(24,755)

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

New loans in year

 

9,050

 

27,606

Loan repayments in year

 

-

 

(384)

New hire purchases in year

 

58

 

-

Payment of lease liabilities

 

(8)

 

-

Amount introduced by directors

 

390

 

-

Share issue

 

685

 

740

Share issue premium

 

2,329

 

2,904

Translation adjustment

 

-

 

(191)

Share issue costs

 

(89)

 

(141)

Net cash from financing activities

 

12,415

 

30,534

 

 

 

 

 

(Decrease) / increase in cash and cash equivalents

 

(4,327)

 

6,284

Cash and cash equivalents at beginning of year

2

6,787

 

503

Cash and cash equivalents at end of year

2

2,460

 

6,787

 

W RESOURCES PLC

COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

 

 

2019

 

2018

Cash flows from operating activities

Notes

€'000

 

€'000

 

 

 

 

 

Cash generated from operations

1

(12,364)

 

(22,639)

Interest paid

 

-

 

(2)

Finance costs paid

 

(426)

 

(4,360)

Tax paid

 

-

 

(62)

Net cash from operating activities

 

(12,790)

 

(27,063)

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Interest received

 

1,297

 

780

Net cash from investing activities

 

1,297

 

780

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

New loans in year

 

5,000

 

27,606

Amount introduced by directors

 

390

 

-

Share issue

 

685

 

740

Share premium

 

2,329

 

2,904

Translation reserve

 

-

 

(192)

Share issue costs

 

(89)

 

(141)

Net cash from financing activities

 

8,315

 

30,917

 

 

 

 

 

(Decrease) / increase in cash and cash equivalents

 

(3,178)

 

4,634

Cash and cash equivalents at beginning of year

2

4,848

 

214

Cash and cash equivalents at end of year

2

1,670

 

4,848

 

 

W RESOURCES PLC

NOTES TO THE STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

1.    RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS

 

2019

 

2018

Group

€'000

 

€'000

 

 

 

 

Loss before income tax

(2,942)

 

(4,592)

Depreciation charges

280

 

251

Exchange losses on new loans

-

 

2,952

Translation reserve

-

 

727

Share warrants issued

-

 

264

Share options issued

-

 

116

Impairment of intangible assets

-

 

353

Finance costs

1,200

 

1,082

 

(1,462)

 

1,153

 

 

 

 

Increase in inventories

(236)

 

(127)

(Increase) / decrease in trade and other receivables

(628)

 

112

(Decrease) / increase in trade and other payables

(2,266)

 

4,851

Cash generated from operations

(4,592)

 

5,989

 

 

 

 

Company

 

 

 

 

 

 

 

Loss before income tax

(696)

 

(1,722)

Exchange losses on new loans

-

 

2,952

Increase in inter-group loans

(11,383)

 

(25,274)

Share warrants issued

-

 

264

Share options issued

-

 

115

Finance costs

872

 

804

Finance income

(1,297)

 

(780)

 

(12,504)

 

(23,641)

 

 

 

 

(Increase) / decrease in trade and other receivables

(10)

 

1,127

(Decrease) / increase in trade and other payables

150

 

(125)

Cash generated from operations

(12,364)

 

(22,639)

 

 

2.    CASH AND CASH EQUIVALENTS

 

The amounts disclosed on the Statements of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

 

 

Group

Company

 

 

 

 

 

 

31.12.19

 

1.1.19

 

31.12.19

 

1.1.19

 

€'000

 

€'000

 

€'000

 

€'000

Year ended 31 December 2019

 

 

 

 

 

 

 

Cash and cash equivalents

2,460

 

6,787

 

1,670

 

4,848

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31.12.18

 

1.1.18

 

31.12.18

 

1.1.18

 

€'000

 

€'000

 

€'000

 

€'000

Year ended 31 December 2018

 

 

 

 

 

 

 

Cash and cash equivalents

6,787

 

503

 

4,848

 

214

                   

 

W RESOURCES PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

2.    SEGMENTAL INFORMATION

2018

 

 

 

 

 

 

 

 

 

 

 

 

Mineral

 

 

By Business Segment:

 

 

Corporate

 

Exploration

 

Total

 

 

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

Revenue

 

 

-

 

219

 

219

Gain / (loss) for the year

 

 

(3,499)

 

(1,017)

 

(4,516)

 

 

 

 

 

 

 

 

Balance Sheet

- Segment Assets

 

8,492

 

50,214

 

58,706

 

- Segment Liabilities

 

(33,876)

 

(5,724)

 

(39,600)

Net Assets

 

 

(25,384)

 

44,490

 

19,106

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By Geographical Sector

 

 

Iberia

 

UK

 

Total

 

 

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

Revenue

 

 

219

 

-

 

219

Gain / (loss) for the year

 

 

(1,017)

 

(3,499)

 

(4,516)

 

 

 

 

 

 

 

 

Balance Sheet

- Segment Assets

 

50,214

 

8,492

 

58,706

 

- Segment Liabilities

 

(5,724)

 

(33,876)

 

(39,600)

Net Assets

 

 

44,490

 

(25,384)

 

19,106

 

 

 

 

 

 

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

Mineral

 

 

By Business Segment:

 

 

Corporate

 

Exploration

 

Total

 

 

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

Revenue

 

 

-

 

365

 

365

Gain / (loss) for the year

 

 

(2,009)

 

(933)

 

(2,942)

 

 

 

 

 

 

 

 

Balance Sheet

- Segment Assets

 

4,881

 

66,559

 

71,440

 

- Segment Liabilities

 

(44,959)

 

(7,392)

 

(52,351)

Net Assets

 

 

(40,078)

 

59,167

 

19,089

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By Geographical Sector

 

 

Iberia

 

UK

 

Total

 

 

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

Revenue

 

 

365

 

-

 

365

Gain / (loss) for the year

 

 

(933)

 

(2,009)

 

(2,942)

 

 

 

 

 

 

 

 

Balance Sheet

- Segment Assets

 

66,559

 

4,881

 

71,440

 

- Segment Liabilities

 

(7,392)

 

(44,959)

 

(52,351)

Net Assets

 

 

59,167

 

(40,078)

 

19,089

 

W RESOURCES PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

4.    NET FINANCE COSTS

 

2019

 

2018

Finance costs:

€'000

 

€'000

  Other finance costs

146

 

109

  Amortisation of loan costs

1,054

 

973

 

1,200

 

1,082

 

 

5.    LOSS BEFORE INCOME TAX

The loss before income tax is stated after charging / (crediting):

 

2019

 

2018

 

€'000

 

€'000

Cost of inventories recognised as expense

343

 

219

Depreciation - owned assets

218

 

190

Exploration & evaluation costs amortisation

61

 

62

Auditors' remuneration

33

 

28

Auditors' remuneration for non-audit work

-

 

4

Foreign exchange differences

495

 

2,422

Exceptional items

-

 

148

Impairment charge

-

 

317

 

A total of €304,000 (2018: €303,000) relating to Michael Masterman's consultancy fees were capitalised in intangible assets in 2019.

An exceptional loss of €(165,000) in 2016 related to a review by HMRC of the Company's VAT position resulting in the suspension of the Company's VAT registration number and a deemed irrecoverability of VAT, which was provided for in the financial statements. The Company disputed HMRC's decision and the review was concluded during the last financial year.

It was concluded at tribunal that the Company's VAT registration be reinstated, and that VAT may be claimed from 1 July 2014 onwards. During the current year and in previous years no VAT was reclaimed and expenditure in 2017 and 2018 is shown gross of VAT. In 2018 however, an adjustment has been made to reverse the provision made in 2016 and to adjust the Statement of profit and loss for all unclaimed VAT. The reduction is shown as an exceptional gain in 2018, and totals €165,000.

The impairment charge of €353,000 in 2018 relates only to the Monforte-Tinoca copper exploration area. The assay results did not demonstrate a regular distribution of significant mineralisation or grade, nor any potential extension of the ore body, to justify a positive future financial return. Given these results, the Company decided not to extend nor renew the exploration license. The area was discontinued effective from 6 November 2018, resulting in this impairment charge and equal to the capitalised exploration expenditure incurred from the date it was awarded until 31 December 2018.

 

 

6.    INCOME TAX

 

2019

 

2018

 

€'000

 

€'000

Current tax:

 

 

 

Tax

-

 

(76)

Total tax (income) / expense in consolidated statement of profit or loss and other comprehensive income

-

 

(76)

 

W RESOURCES PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

6.    INCOME TAX continued

Factors affecting the tax expense

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

 

2019

 

2018

 

€'000

 

€'000

Loss before income tax

 

 

 

 

(2,942)

 

(872)

Loss multiplied by the standard rate of corporation tax in

 

 

 

the UK of 19% (2018 - 19%)

(559)

 

(872)

 

 

 

 

Effects of:

 

 

 

Share options cost disallowed

-

 

(22)

Share warrants cost disallowed

-

 

(50)

 

 

 

 

Benefit of losses brought forward

(4,976)

 

(4,108)

Benefit of losses carried forward

5,535

 

4,976

Tax income

-

 

(76)

 

 

8.    LOSS PER SHARE

Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

Diluted loss per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares. The share options issued during 2016, 2018 and 2019 are considered to be anti-dilutive in accordance with IAS 33 as on conversion they would decrease loss per share from continuing operations.

Reconciliations are set out below

2019

 

 

 

Weighted

 

 

 

 

 

Average

 

 

 

 

 

Number

 

Per Share

 

Loss

 

of Shares

 

Amount

 

€'000

 

(millions)

 

Cents

Basic loss per share

 

 

 

 

 

Loss attributable to ordinary shareholders

(2,942)

 

6,018

 

-0.05

Effect of dilutive securities

-

 

-

 

-

 

 

 

 

 

 

Diluted loss per share

 

 

 

 

 

Adjusted loss

(2,942)

 

6,018

 

-0.05

 

 

2018

 

 

 

Weighted

 

 

 

 

 

Average

 

 

 

 

 

Number

 

Per Share

 

Loss

 

of Shares

 

Amount

 

€'000

 

(millions)

 

Cents

Basic loss per share

 

 

 

 

 

Loss attributable to ordinary shareholders

(4,516)

 

5,423

 

-0.08

Effect of dilutive securities

-

 

-

 

-

 

 

 

 

 

 

Diluted loss per share

 

 

 

 

 

Adjusted loss

(4,516)

 

5,423

 

-0.08

 

 

W RESOURCES PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

9.    INTANGIBLE ASSETS

 

Exploration

Group

& Evaluation

 

Costs

COST

€'000

 

 

At 1 January 2019

27,282

Additions

10,567

Reclassification / transfer

(5,233)

At 31 December 2019

32,616

 

 

AMORTISATION

 

At 1 January 2019

673

Amortisation for year

61

At 31 December 2019

734

 

 

NET BOOK VALUE

 

At 31 December 2019

31,882

 

Intangible asset additions includes a reduction of €470,000 in relation to an invoice issued to Arypex SL, from whom the Group acquired the rights to the mining concessions in Spain, to recover expenses incurred by the Group to correct certain environmental damages which originated prior to the date that the Group signed the original lease (with option to purchase agreement) with Arypex SL, in 2009.

 

 

Exploration

Group

& Evaluation

 

Costs

COST

€'000

At 1 January 2018

15,438

Additions

11,683

Reclassification / transfer

161

At 31 December 2018

27,282

 

 

AMORTISATION

 

At 1 January 2018

255

Amortisation for year

62

Impairments

353

Exchange differences

3

At 31 December 2018

673

 

 

NET BOOK VALUE

 

At 31 December 2018

26,609

The above represents capitalised testing works and concessions costs acquired.

 

 

W RESOURCES PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

10.   PROPERTY, PLANT AND EQUIPMENT

Group

Plant &

 

Machinery

COST

€'000

At 1 January 2019

19,355

Additions

6,537

Reclassification / transfer

5,233

At 31 December 2019

31,125

 

 

DEPRECIATION

 

At 1 January 2019

804

Charge for year

218

At 31 December 2019

1,022

 

 

NET BOOK VALUE

 

At 31 December 2019

30,103

 

Group

Plant &

 

Machinery

COST

€'000

At 1 January 2018

3,063

Additions

16,259

Exchange differences

33

At 31 December 2018

19,355

 

 

DEPRECIATION

 

At 1 January 2018

607

Charge for year

190

Exchange differences

7

At 31 December 2018

804

 

 

NET BOOK VALUE

 

At 31 December 2018

18,551

 

At 31 December 2019, the following non-current assets, which were additions during the construction phase of La Parrilla mine, during 2018 and its completion in 2019, were reclassified from intangible non-current assets to tangible non-current assets to better reflect their physical nature or direct attribution to the construction cost of the new plants:

 

Cumulative balance further to reclassification

Reclassification

 

2019

€uro

 

2018

€uro

Civils & earthworks

2,422,940

 

1,159,374

Tailings dam walls

660,859

 

412,635

Transformation centre

2,566,671

 

1,618,238

Project management fees

1,498,885

 

1,200,957

Engineering fees

849,277

 

841,787

Total

7,998,632

 

5,232,990

 

W RESOURCES PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

11.   INVESTMENTS

Company

Shares in

 

Group

 

Undertakings

COST

€'000

At 1 January 2019

1,695

Additions

5,000

and 31 December 2019

6,695

 

 

NET BOOK VALUE

 

At 31 December 2019

6,695

 

 

At 31 December 2018

1,695

 

 

 

Company

Shares in

 

Group

 

Undertakings

COST

€'000

At 1 January 2018

 

and 31 December 2018

1,695

 

 

NET BOOK VALUE

 

At 31 December 2018

1,695

Company

During the year the company converted €5m of its intercompany loan with Iberian Resources Spain SL into equity in Iberian Resources Spain SL.

The group or the company's investments at the Statement of Financial Position date in the share capital of companies include the following:

Direct Subsidiaries

Iberian Resources Spain SL

Registered office: Finca La Parrilla, 10132 Almoharin Cáceres, Spain

Nature of business: Tungsten mining, production, exploration

 

%

 

 

 

 

Class of shares:

Holding

 

 

 

 

Ordinary

100.00

 

 

 

 

 

 

 

2019

 

2018

 

 

 

€'000

 

€'000

Aggregate capital and reserves

 

 

(6,258)

 

(4,145)

 

Copper Gold Resources Plc (Group)

Registered office: 27/28 Eastcastle Street, London W1W 8DH

Nature of business: Tungsten mining exploration, development

 

%

 

 

 

 

Class of shares:

Holding

 

 

 

 

Ordinary

100.00

 

 

 

 

 

 

 

2019

 

2018

 

 

 

€'000

 

€'000

Aggregate capital and reserves

 

 

(367)

 

(235)

 

W RESOURCES PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

11.   INVESTMENTS - continued

Indirect subsidiaries

 

Iberian Resources Portugal LDA

Registered office: Lugar das Mozes, 5110-159 Armamar, Portugal

Nature of business: Mineral Exploration

 

%

 

 

 

 

Class of shares:

Holding

 

 

 

 

Copper Gold Resources Plc owns

100.00

 

 

 

 

 

 

 

2019

 

2018

 

 

 

€'000

 

€'000

Aggregate capital and reserves

 

 

(431)

 

(312)

 

 

12.   INVENTORIES

 

Group

 

2019

 

2018

 

 

€'000

 

€'000

 

 

 

 

 

 

Concentrate for re-sale

415

 

179

 

           

 

 

13.   TRADE AND OTHER RECEIVABLES

 

Group

 

Company

 

2019

 

2018

 

2019

 

2018

 

€'000

 

€'000

 

€'000

 

€'000

Current:

 

 

 

 

 

 

 

Trade receivables

36

 

-

 

-

 

-

Other receivables

905

 

1,037

 

61

 

58

Other prepayments

1,929

 

1,203

 

36

 

31

Finance cost prepayments

1,203

 

1,063

 

1,009

 

871

 

 

 

 

 

 

 

 

>1 year:

 

 

 

 

 

 

 

Amounts owed by group undertakings

-

 

-

 

59,977

 

48,071

Finance cost prepayments

2,507

 

3,277

 

2,102

 

2,686

 

6,580

 

6,580

 

63,185

 

51,717

                 

 

 

14.   CASH AND CASH EQUIVALENTS

 

Group

 

Company

 

2019

 

2018

 

2019

 

2018

 

€'000

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

Bank accounts

2,460

 

6,787

 

1,670

 

4,848

                 

 

 

15.   CALLED UP SHARE CAPITAL

Allotted and issued:

 

 

Nominal

 

2019

 

2018

Number

Class

 

Value

 

£'000

 

£'000

6,378,427,640

 

 

 

 

 

 

 

(2018: 5,784,197,054)

Ordinary

 

0.1p

 

7,134

 

6,448

 

W RESOURCES PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

15.   CALLED UP SHARE CAPITAL - continued

594,230,586 Ordinary Shares of 0.1p were issued during the year for cash as follows:

-      On 5 February 2019, 9,183,673 Ordinary Shares of 0.1p each were issued at a premium of 0.39p raising €51,043.

-      On 18 April 2019, 201,571,429 Ordinary Shares of 0.1p each were issued at a premium of 0.32p raising £846,600 (€979,855). This was in part the exercise of 200,000,000 share warrants issued last year.

-      On 22 May 2019, 35,714,284 Ordinary Shares of 0.1p each were issued at a premium of 0.32p raising £150,000 (€170,145). This was the exercise of 35,714,284 share warrants issued last year.

-      On 16 September 2019, 185,511,200 Ordinary Shares of 0.1p each were issued at a premium of 0.40p raising £927,556 (€1,052,962)

-      On 15 November 2019, 72,250,000 Ordinary Shares of 0.1p each were issued at a premium of 0.30p raising £289,000 (€337,350)

-      On 29 November 2019, 90,000,000 Ordinary Shares of 0.1p each were issued at a premium of 0.30p raising £360,000 (€422,280)

At the year-end there were 779,033,998 Share Warrants in issue that were yet to be exercised. (2018: 554,034,000).

 

 

16.   RESERVES

 

 

 

 

 

Share

Group

 

 

 

 

Based

 

Retained

 

Share

 

Payment

 

Earnings

 

Premium

 

Reserve

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

At 1 January 2019

(21,294)

 

34,418

 

1,622

Deficit for the year

(2,942)

 

-

 

-

Cash share issue

-

 

2,329

 

-

Cost of share issue

-

 

(89)

 

-

Transfer of reserves

(3,791)

 

-

 

-

At 31 December 2019

(28,027)

 

36,658

 

1,622

 

Group

Merger

 

Translation

 

 

 

Reserve

 

Reserve

 

Totals

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

At 1 January 2019

1,014

 

(3,791)

 

11,969

Deficit for the year

-

 

-

 

(2,942)

Cash share issue

-

 

-

 

2,329

Cost of share issue

-

 

-

 

(89)

Transfer of reserves

-

 

3,791

 

-

At 31 December 2019

1,014

 

-

 

11,267

 

W RESOURCES PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

16.   RESERVES - continued

 

 

 

 

 

Share

Company

 

 

 

 

Based

 

Retained

 

Share

 

Payment

 

Earnings

 

Premium

 

Reserve

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

At 1 January 2019

(14,207)

 

34,418

 

1,622

Deficit for the year

(696)

 

-

 

-

Cash share issue

-

 

2,329

 

-

Cost of share issue

-

 

(89)

 

-

Share options issued

(5,683)

 

-

 

-

At 31 December 2019

(20,586)

 

36,658

 

1,622

 

Company

Merger

 

Translation

 

 

 

Reserve

 

Reserve

 

Totals

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

At 1 January 2019

1,014

 

(5,683)

 

17,164

Deficit for the year

-

 

-

 

(696)

Cash share issue

-

 

-

 

2,329

Cost of share issue

-

 

-

 

(89)

Transfer of reserves

-

 

5,683

 

-

At 31 December 2019

1,014

 

-

 

18,708

 

 

17.   TRADE AND OTHER PAYABLES

 

 

Group

 

Company

 

2019

 

2018

 

2019

 

2018

 

€'000

 

€'000

 

€'000

 

€'000

Current:

 

 

 

 

 

 

 

Trade creditors

3,500

 

5,782

 

198

 

63

Amounts owed to group undertakings

-

 

-

 

75

 

81

Other creditors

2

 

1

 

2

 

1

Accrued expenses

86

 

71

 

82

 

68

Directors' current accounts

390

 

-

 

390

 

-

 

3,978

 

5,854

 

747

 

213

                 

 

 

18.   FINANCIAL LIABILITIES - BORROWINGS

On 14 February 2018, W Resources signed a Credit and Guaranty Agreement with BlackRock Financial Management Inc. to provide a US$35 million secured term loan facility to the Company to fund the La Parrilla mine development. The first US$13.125 million was drawn in February 2018 and the balance of US$21.875 million was funded in May 2018.

The key terms of the Credit and Guaranty Agreement with BlackRock Financial Management Inc. are as follows:

-     The Loan is for a scheduled term of five years, with a two-year non-call period. The Company has the right to repay the Loan after two years for a premium of 5%, after three years for a premium of 3%, and after four years for no premium; the Loan is secured over the value of the Group's intangible and tangible assets in Spain and in Portugal as well as the stream of future revenues expected from off take agreements.

-     Subject to any early repayment permitted or required under the Agreement, repayment will be made by way of a cash flow sweep, utilising free cash to repay the loan; it is not expected that cash will be available within the initial two-year period and therefore the full amount of the loan has been recognised as payable between 2-5 years.

 

W RESOURCES PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

18.   FINANCIAL LIABILITIES - BORROWINGS - continued

-     The Loan is subject to an average 5-year interest rate of 12.6%, being 14% in the first year, 13% in the second year and 12% thereafter.

-     First year interest is added to the value of the principal, while 50% of the second-year interest is added to the value of the principal and 50% is payable in cash; from the third year onwards, interest will be fully payable in cash on quarterly anniversaries of the loan agreement.

-     Lenders received a non-refundable upfront fee of 3% of the face value of each of the respective Loan disbursements.

-     Lenders received warrants totalling 5% of W Resources Plc fully diluted equity. These have been valued at 5% of the total loan value €1,440,000 (note 21).

On 18 December 2019, BlackRock Financial Management Inc. agreed to increase the existing loan facility provided to W Resources by US$5 million, with no warrants attached.

During the year interest of €5,257,259 (2018: €3,141,667) was incurred on the Loan. This was added to the loan capital during the year and recharged by W Resources PLC to its subsidiary Iberian Resources Spain SL where it was capitalised in Intangible and in Tangible assets in proportion to the expenditure on each of these categories during the year, and in accordance with the Groups accounting policy for loan interest.

The value of the BlackRock Financial Management Inc. loan included in the statement of financial position at the balance sheet date is US$49,458,659 (€44,273,000) (2018: €33,746,000).

On 7 May 2019, a loan of €3,000,000 was advanced by Spanish bank, Caja Rural de Extremadura to Iberian Resources Spain S.L. with a term of 15 months and an interest rate of 1.75% p.a. The Caja Rural de Extremadura bank has a lien over the grant to receivable from the Junta de Extremadura of €5.3 million. The value of this loan included in the statement of financial position at the balance sheet date is €3,000,000 (2018: NIL).

On 18 June 2019, an overdraft facility of €300,000 was provided by Banco Bilbao Vizcaya to Iberian Resources Spain S.L. with a term of 12 months and an interest rate of 2.65% p.a. A 29% APR will apply if not repaid by 18 June 2020. The value of this overdraft included in the statement of financial position at the balance sheet date is €299,700 (2018: NIL).

On 15 October 2019, the Banco Bilbao Vizcaya provided and advance on VAT receivables of €50,000 to Iberian Resources Spain S.L. with a term of 12 months and an Interest rate of 2.3% p.a. The value of this VAT advance included in the statement of financial position at the balance sheet date is €50,000 (2018: NIL).

On 15 October 2019, Iberian Resources Spain S. L. signed a reverse factoring agreement with the Banco Bilbao Vizcaya, for up to €200,000 with an interest rate 2.75% p.a. The value of this credit facility included in the statement of financial position at the balance sheet date is €199,833 (2018: NIL).

On 3 December 2019, Iberian Resources Spain S. L. signed a revolving credit facility of €500,000 with CaixaBank with a term 6 months and an interest rate of 2.5% p.a.. The value of this credit facility included in the statement of financial position at the balance sheet date is €500,000 (2018: NIL).

Subsequent to 31 December 2019, on 31 January 2020 Iberian Resources Spain S. L. signed a loan agreement for €5,000,000 with Banco Santander, S.A ("Santander") which repaid the €3,000,000 loan from the Caja Rural de Extremadura. The facility interest rate is 3% per annum, payable quarterly, with no amortisation and is secured by a pledge over the rights to the Grant funds. The term of the loan is the earlier of 12 months or the receipt of the proceeds of the Grant funds.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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on 2/5/19