Debt financing to fund US$27 million La Parrilla expansion

SEATTLE (ITRI.CO.UK): London Stock Exchange listed, W Resources Plc (AIM:WRES), has started a process to raise some US$24 million in debt finance to fund the US$27 million expansion of its La Parrilla tungsten-tin project in the Extremadura region of south-west Spain.

The second stage of the La Parrilla mine development would increase the capacity of the mine to 2 million tpa, or 2,500 tpa of tungsten concentrate and 500 tpa of tin concentrate. The design and engineering of the expansion also allow for a further expansion to a 3.5 million tpa at a further cost of US$18 million. The company expects to provide a detailed outline of the development programme by the middle of 2017, with the financial closure of debt financing efforts by the end of Q3 2017. The completion of the second stage development is expected to be complete and in commissioning by Q2 2018. In addition to debt financing efforts, the company has also applied for regional government grants of up to US$5.85 million, which would provide cash flow for operations following completion of expansion work.

Company Chairman, Michael Masterman, commented: "Securing the right debt package has been a longer process than first anticipated, which has pushed the timeline to production back some months, however the Board are confident of the revised timeline in respect of the completion of construction of the T2 phase in Q2 2018, with production restarting in Q3 2018."

ITRI View: Production from the first stage of the La Parrilla Mine began in October 2016. Much like the Drakelands tungsten-tin mine in the UK, tin output from the La Parrilla operation is relatively minor compared to other tin projects and operations globally, as tungsten concentrates are the main product from both mines. Despite this, the two operations represent the only known industrial sources of primary tin production in Western Europe and as such production on the continent could more than double as a result of these expansion plans. A number of other European tin projects are also active, for example in the UK, Germany and Czech Republic, which represent further opportunities for tin sourcing in the years ahead.

Courtesy: www. itri.co.uk