La Parrilla Ramp-Up Finance Update
15 November 2019
W Resources Plc
("W" or the "Company")
La Parrilla Ramp-Up Finance Update
W Resources Plc (AIM:WRES), the tungsten, tin and gold mining company with assets in Spain and Portugal, has advanced a funding package of circa €2.78m. The funds will be used to advance the ramp-up of La Parrilla to design capacity and to provide working capital to supplement the Company's existing cash resources of approximately €155k. An initial amount of €1.358m of this has been secured through: an equity placement of £289k (€330k) at 0.40p, loans from Directors of £344k (€392k); and Blackrock has agreed that an additional 50% of the November interest payment, amounting to US$700k (€636k) can be added to the existing debt facility (known as paid in kind). Work is advanced but not yet concluded on the second tranche which is an additional debt facility from either existing or new bank or finance providers of a minimum of €1.0m, which are subject to credit committee and loan documentation processes.
Until the increased or new facilities are completed, the Directors remain in a closed period and therefore cannot deal in any equity or equity linked instruments. Directors have hence provided loans as they are restricted from equity participation during the close period.
The Company has completed a placement of 72,250,000 ordinary shares of 0.1p per share ("Ordinary Shares") at a price of 0.40p per Ordinary Share to raise £289,000 (approximately €329,909) (the "Placing") before expenses.
The funds raised from the Placing will be used to provide working capital during the ramp-up period.
As part of the Placing, the Company has granted share options over 43,800,000 new Ordinary Shares to two Spanish Investors (the "Options"), at an exercise price of 0.40p per Ordinary Share. The Options will be exercisable at any time until their expiry date of 30 November 2020. Following the issue of the Options, there will be a total of 313,800,000 share options granted over unissued Ordinary Shares, representing 4.99% of the Company's share capital of 6,288,427,640 Ordinary Shares following the issue of the 72,250,000 new Ordinary Shares.
Settlement and Dealings
Application will be made for the new Ordinary Shares being issued in connection with the Placing to be admitted to trading on AIM with admission expected to occur on or around 22 November 2019.
Total Voting Rights
Following admission of the new Ordinary Shares, the Company's enlarged issued share capital will comprise 6,288,427,640 Ordinary Shares with voting rights. The Company has no shares held in Treasury. This figure of 6,288,427,640 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.
As announced on 16 September 2019, the Spanish investor who indicated interest to invest €2m on the same terms as the September 2019 placement has not yet secured investment funds approval and the W Board assumes this opportunity has now lapsed.
Debt Finance Update
W Resources has been in advanced discussions with existing and new Spanish banks and debt providers in order to increase debt funding lines by a minimum of €1m to support the ramp-up. Credit committee processes and legal documentation are advanced but there is of course no firm commitment until such processes are complete. W will update the market in due course.
BlackRock Financial Management Inc. has agreed to continue to allow the Company to capitalise 50% of the interest amounting to US$700,174 on the US$35m loan facility due on the next payment date of 15 November 2019.
In the meantime, in order to provide interim funding, Beronia Investments Pty Ltd ATF Duke Trust, of which Dr Byron Pirola (a director of the Company) is both a beneficiary and trustee has lent the Company a short term loan totalling £100,000, Symmall Pty Limited, of which Mr Michael Masterman (a director of the Company) is both a beneficiary and trustee, has lent the Company a short term loan totalling £200,000 and Mr James Argalas (a director of the Company) has lent the Company a short term loan totalling €50,000. The loans are unsecured and carry an interest rate of 10% per annum.
The loans by directors constitute related party transactions for the purposes of AIM Rule 13. The independent directors, having consulted with the Company's nominated adviser, Grant Thornton UK LLP, consider that the terms of the related party transactions are fair and reasonable insofar as the Company's shareholders are concerned.
With regard to the €5.3 million grant from the Junta de Extremadura, this is advancing with the normal process of documentation submission and verification. Given the pending holiday season and end of Extremadura 2019 budget year we have now been guided to expect grant proceeds in Q1 2020. The funding package outlined above is expected to provide sufficient funding until receipt of the Grant proceeds
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.
W Resources Plc
T: +44 (0) 20 7193 7463
Grant Thornton UK LLP
Colin Aaronson / Seamus Fricker
T: +44 (0) 20 7383 5100
Turner Pope Investments (TPI) Ltd
T: +44 (0) 203 657 0050
Alternative Resource Capital / Shard Capital
T:+44 (0) 207 186 9004
T:+44 (0) 207 186 9952
M: +44 (0) 7525 324431
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