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Chairman Q&A with Michael Masterman at W Resources PLC (LON:WRES)

W Resources PLC (LON:WRES) Chairman Michael Masterman caught up with DirectorsTalk for an exclusive interview to discuss their update on La Parrilla and their other Portuguese assets.


Q1: A busy first quarter at La Parrilla with plants and infrastructure now completed, can you talk us through what’s been happening there?

A1: It’s certainly been an intense Q1 and I think we’ve got a very busy year, Q2 coming up as well and at La Parrilla, there’s three parts to our processing plants.

The first is the crusher, that was completed and commissioned on ore in December and we’ve been able to fully commission it at design capacity and that’s running very smoothly so the crusher is the first part and that’s in great shape.

We’ve also finished all the, what we call, non-plant infrastructure so that’s things like the buildings and the power station, things like that so that’s all set to go.

The next key milestone, and the one we’re very much focussed on, is the jig so we go crusher, jig, concentrator. The jig should be mechanically complete at the end of March/early April and we’re looking to feed first crush into the new jig in the middle of April which will be a very important step for us in terms of moving up the production with La Parrilla.

The final step for the Q2 will be completing the concentrator and that will be completed in Q2 as well and there’s a nice time-lapse video that we added to our link, it’s good to see how quickly these plants go up once you get all the steel and other equipment in place.


Q2: You referred to moving to stage 2 ramp-up but what does that involve and, I guess, what are stages 1 and 3?

A2: One of the great advantages W Resources have had at La Parrilla in terms of going construction completion to live scale tungsten production is we’ve got an existing concentrator in place.

So, what we’ve been doing to date is we’ve been taking tailings ore from previous mining and taking crushed ore and running it through the old concentrator, now that’s efficient and that’s allowed us to produce and ship product to our customers.

One of the key next steps to a significant increase in production is the completion of the jig and once we complete the jig, we can run the new crusher, the new jig and take that upgraded ore from the new jig and run it through the old concentrator. That should effectively allow us to double the production rates because the jig significantly increases the grade going into the concentrator so that’s stage 2.

Stage 3 of the ramp-up is when the large new concentrator has finished in Q2, we’ll then be able to go from the new concentrator, the new jig into the new large scale concentrator. We’ve got the objective by the end of 2019 to get to the design capacity of 200 tonnes which is approximately, if you include the tin, $3 million per month in revenue or $36 million.


Q3: Just turning to Régua, how is progress there going?

A3: Our primary focus is very much La Parrilla and that’s very critical for our success and our cash flow, but we have been able to move our Régua project in Northern Portugal very nicely at the very lean capital cost project.

We’ve just done the infill drilling in the portals to the mining entrance and we’re advancing quite significantly on the third party contracts for both contract mining and contract crushing and they should allow us to, in the back end of 2019, move Régua into initial production.

In other projects in Portugal, we’ve got the Sao Martinho project which is a gold discovery in Central Portugal, SRK has been doing an update of the resource estimate following the significant reverse circulation and diamond core drilling we’ve done previously. So, investors can expect an update on that resource in Q2 and we’ve also applied for a trial mine licence on that gold deposit so that will also move that one forward.


Q4: The trial licence, just how easy or complicated is the Portuguese regulatory system to navigate?

A4: For a variety of reasons, we’ve structured the trial mine to be efficient with no environmental concerns. The process does take a period of time to get all of the approvals in place in Portugal, but we have been successful on previous projects taking projects through to trial mine licence. It really allows us to de-risk a project and head towards first gold production once we get all of that regulatory approval in place.


Q5: Now, just pulling it all back together and with so much going on, what should we expect from W Resources in terms of news flow in the coming months?

A5: There’s going to be a lot of news flow on La Parrilla because there’s so much going on in terms of activity and completion of the plant and then the ramp-up of the plant. The jig will be finished late March/April, we’ll feed ore into that jig in April which will allow us to significantly increase production rates from the La Parrilla mine. There’ll be further updates in terms of all the various parts of the plant that are progressively been completed and then the focus will very much turn to the ramp-up programme and quarterly updates in terms of production rates and La Parrilla.

In Régua, we’ll have an update on the resource there and the initial mining plans and in Sao Martinho, in Q2 we’ll have an update on the SRK revised resource estimate.

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.