W Resources PLC Statement re. Suspension (2919H)
05 Aprile 2022 - 8:40AM
UK Regulatory
TIDMWRES
RNS Number : 2919H
W Resources PLC
05 April 2022
5 April 2022
W Resources Plc
("W" or the "Company"
La Parrilla and Funding Update
Temporary Suspension of Trading in Ordinary Shares
W Resources Plc (AIM:WRES), the tungsten, tin and gold mining
company with assets in Spain and Portugal, announces that the
operating and commercial conditions in Spain at the La Parrilla
mine continue to be extraordinarily challenging.
Key challenges:
-- The recent Spanish truck drivers dispute has stopped delivery
of critical spare parts to the La Parrilla mine and the collection
of tungsten and tin concentrate shipments.
-- Liquefied Natural Gas ("LNG") prices for delivery to the mine
remain at highly inflated levels of up to seven times higher than
the average monthly charges in 2021 and previous years.
As a result the Board has no option but to temporarily suspend
production and operations at La Parrilla, due to shortage of key
spare parts and the very high LNG prices that place an excessive
cost burden on the mine. The Board has assessed that it is best to
wait for a stabilisation in prices prior to recommencing
operations. The Company is also investigating the possibility of
LNG price support with its offtake partner and customers which
would enable an earlier resumption of production.
The Board notes that similar shut downs have been initiated in
Spain by many other small and medium sized businesses including the
major steel plant operators.
During the shutdown period the Company is applying for Spanish
government support under the Expediente de Regulación Temporal de
Empleo ("ERTE") employment retention programme and it is confident
this support will be received.
The Company's plans to reduce the dependence on LNG continue to
be expedited including options for solar power and also an
electricity grid connection upgrade.
Separately, the Company has also been informed that the
Dirección General de Industria, Energía y Minas of Extremadura has
challenged the W group's authorisations to operate. The Company
will be appealing this challenge and has been advised by its
lawyers that it can continue to operate pending resolution of the
appeal. The Company is confident of a successful outcome.
Financing and Financial Position Update
The suspension of operations places significant financial
pressure on the Company's subsidiary in Spain, Iberian Resources
Spain ("IRS") which has very limited cash. W Resources has drawn
US$2.5m from the expanded US$5.5m facility provided by one or more
funds and accounts managed by BlackRock Financial Management, Inc.
and/or its affiliates ("BlackRock") as announced on 2 March 2022.
In light of the above mentioned events, the Company is in
discussions with BlackRock regarding the timing of incremental
drawdowns.
In addition, the Company is currently in discussion with a
supplier who has an outstanding balance of approximately EUR1m and
is proposing a payment plan with this supplier. If this is agreed
then IRS will be in a position to undertake certain operational
activities which are expected to generate a similar amount for
IRS.
The Company believes that utilisation of its funding facilities
in full and resolution of the supplier dispute will enable the
Company to continue operating for approximately three to four
months in the absence of the re-commencement of mining operations
at La Parrilla. However, resolution of both these is required as a
matter of urgency given the effect of the suspension of mining
operations and associated revenues on W's cash position.
In light of the considerable uncertainty over the timing of
cashflows from its borrowing facilities and elsewhere, the Company
has requested a suspension of its shares on AIM pending
clarification of its financial position.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the retained EU
law version of the Market Abuse Regulation (EU) No. 596/2014 (the
"UK MAR") which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018. The information is disclosed in accordance
with the Company's obligations under Article 17 of the UK MAR. Upon
the publication of this announcement, this inside information is
now considered to be in the public domain.
Enquiries:
W Resources Plc Grant Thornton UK LLP
Paul Hailes Colin Aaronson / Harrison Clarke
investor@wresources.com / Samuel Littler
www.wresources.com T: +44 (0) 20 7383 5100
Alternative Resource Capital / Alma PR
Shard Capital Justine James
Alex Wood M: +44 (0) 7525 324431
T:+44 (0) 207 186 9004 wres@almapr.co.uk
www.altrescap.com
Damon Heath
T:+44 (0) 207 186 9952
www.shardcapital.com
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END
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April 05, 2022 02:40 ET (06:40 GMT)
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