Michael Masterman Chairman of W Resources made a confident and informative presentation at the Mining Capital conference on Monday the 7th December.
Key points being:
1. Wolfe, who have a mine in the UK had costs of $200m to get to production compared with $16m at La Parrilla. La Parrilla is a very efficient operation.
2. Current price of tungsten $170 / mtu whilst La Parrilla tungsten will cost $121 / mtu to extract.
3. Regarding the RNS Released today:
- news will substantially reduce operating costs.
- Tungsten grade is 3 times what WRES thought and deposit is just under the surface.
- Sample came from the fast track mining plot in an area that WRES thought had little potential.
- Results will significantly increase resource estimation.
4. La Parrilla funding:
- Should hear early 2016. This will be a ‘key event in the New Year’.
In talks with 2 or 3 partners regarding joint venture. Masterman made it clear he has a good track record of getting funding for this type of project.
- Also having conversations about European funding as will be providing employment in poor areas of Spain and as tungsten is strategic metal funding available as reduces reliance on China for supplies.
- La Parrilla mine depending on price of tungsten has a 12-18 month pay back period.
- WRES have all the finance required to reach Final Investment Decision (ie funding of production at La Parrilla).
- MM has large shareholding (20%) and his investment is therefore aligned with that of shareholders. It was clear that with any investment decision WRES wouldn’t rush as want to get the best deal possible.
I came away from the event, clear:
A) That the RNS released today is significant news and when the increased resource estimation is calculated and reduced production costs understood the share price will rerate accordingly.
B) WRES is on track to deliver for its shareholders
C) The last hurdle for Parrilla, finance Is moving towards a conclusion.