W Resources lowers 2021 output guidance, but says first-quarter performance to be better
Aim-listed W Resources has adjusted its full-year guidance for 2021 to 520 t of tungsten and tin concentrate, down from between 650 t and 750 t of concentrate, owing to continued challenges experienced in the fourth quarter.
The company explains in an operational update that heavy rains in December led to production stoppages caused by wet crushed ore blocking the silo at the La Parrilla tungsten and tin mine, in Spain.
Additionally, the company only had access to mid- to low-grade ore, and experienced maintenance issues and supply chain bottlenecks for replacement parts.
The company does, however, expect production to improve significantly in the first quarter of 2022, owing to the openpit having been drained of water, giving access to higher-grade orebodies, and the crushed ore stockpile area nearing finalisation.
The company has also implemented improved maintenance solutions and beefed up its spare parts stock to avoid future bottlenecks.
The challenges encountered in the fourth quarter of last year led to unexpected pressure on cash flow, but W has completed a share placement with offtake partner ICD Alloys & Metals and investment company Symmall, raising £830 000 – with ICD investing £778 227 and Symmall £55 106.
"A number of challenges encountered towards the end of 2021 have resulted in a much lower performance than we had envisaged. Once again the management team at La Parrilla have overcome these challenges and as we start to mine and process higher-grade ore we are seeing increased levels of production, higher recovery rates and increasing utilisation rates.
“Lower-than-expected production levels have put some stress on the company's cash flow. I am therefore delighted with the support being offered to us by shareholders,” comments chairperson Michael Masterman.
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