The W Resource business has a focus on tungsten.
These are some of the reasons why companies involved in tungsten production are potentially good investment opportunities.
- Tungsten is essential for improving quality of life and as a result, securing reliable access is important.
- It is a strategic metal required for technology and industry.
- Not an abundant resource.
- Found in few locations around the world
- Tungsten has no substitutes
- Its USP is its heat resistance and durability.
- China is the largest consumer of tungsten and is going to restrict exports.
- China is the largest producer of tungsten (86%).
Chinese Ministry of Land and Resources each year dictate the annual extraction quota for the country’s tungsten production.
What happens if China reduce extraction rates as anticipated and reduce export quotas to satisfy internal demand?
China also intends to increase the resource tax, which will result in the cost of tungsten concentrate production from China increasing.
W Resource are well placed to take advantage of the current low and any future increase in the price of tungsten.
The low price of tungsten means those procuring production plant are able to procure when demand is at its lowest due to more plant becoming available as mining operations close or scale back their operations.
As the La Parilla mine comes into full production the operation will be able to take full advantage of any increase in the tungsten price. The La Parilla mine is viable due to low operating costs compared with other operations as indicated on the following chart. If it’s viable now, any increase in the tungsten price will have an immediate impact of profit levels.
Michael Masterman is Presenting at the Mining Capital Conference on the 7th December 2015. This would be an excellent opportunity to amplify on any RNS issued prior to the event regarding the La Parilla licence, metalurgical analysis and progress obtaining plant etc ready for commencement of production in Q1 2016.
I wouldn’t be surprised if an RNS announcement is made prior to the 7th December regarding progress with the La Parilla mine. This would provide the platform for Masterman to build upon investor sentiment and any increase in the share price.