W Resources PLC (LON:WRES) said today that, having completed the Financial Investment Decision (FID) report on the development of its La Parrilla project in Spain, the group has increased the size of its targeted debt financing, which it now expects may be completed early in the fourth quarter of 2017.
In a statement, the AIM-listed group said that following finalisation of the FID report, and based on discussions and feedback, its board has elected to increase the size of the target debt financing to US$30mln from US$25mln, which it said is expected to allow the company to remove the equity financing component previously outlined.
The firm added that its capital and operating costs estimates “remain at the previously indicated highly competitive levels.”
W Resources said that with high level term sheets now received and negotiations advancing well it is “in the shareholders best interest that the Company obtains the most competitive debt package.”
Therefore, it added, with the development timeline from financing to completion of the plant at 12 months, a fourth quarter 2017 financing completion will pave the way for production in the fourth quarter of 2018.
The group said the timing in concluding the financing is aided by further strengthening of the European Tungsten APT price to over US$250 per metric ton unit (mtu) this month.
La Parrilla is expected to be developed and expanded over the next 12 months to mine 2mln tonnes per annum (mtpa) of run of mine and produce approximately 2,700 tonnes of tungsten concentrate and 500 tonnes of tin concentrate per annum.
Fundamentals of La Parrilla “ever more competitive”
Michael Masterman, chairman of W Resources commented: "The fundamentals of La Parrilla are ever more competitive with the tungsten price increase over the past 12 months”.
He added: “We appreciate our shareholders patience as we reach the next major milestone with the debt financing and we are as keen as any to conclude our negotiations in order to ramp up the La Parrilla project development."
The company said, in parallel at La Parrilla, development work continues with design of the jig, concentrator, mine and associated infrastructure advancing.
W Resources also added that formal feedback on grants application is expected in the fourth quarter of 2017 and the company is advanced in submitting the approval documentation to expand the mine from 2mtpa to 3.5mtpa at that time.
In lunchtime trading, W Resources shares held steady at 0.3p.