4 June 2020
W Resources Plc
("W" or the "Company")
Final Results for the Year Ended 31 December 2020
Annual Report and Accounts and Notice of Annual General Meeting
The Company is today posting a copy of the report and accounts to shareholders along with a notice of Annual General Meeting ("AGM") which will take place at at 11:00am on Wednesday, 30 June 2021 at 27/28 Eastcastle St, London W1W 8DH.
A copy of the report and accounts, the notice of meeting and proxy form can also be found on the Company's website, www.wresources.com.
The Board continues to closely monitor the coronavirus pandemic and the Company's priority at this time remains the health, safety and wellbeing of all of its stakeholders. As part of its monitoring, the Board has noted, in particular, the gradual easing of public health restrictions across England in line with the government's "COVID-19 Response - Spring 2021" roadmap. Based on that roadmap and associated guidance, it is currently anticipated as at the date of this Notice that attendance in person at the meeting will not be unlawful. It is therefore intended that sufficient of the Directors to form a quorum will be present in person at the AGM, observing relevant social distancing guidelines in place on the date of the meeting. However, given ongoing safety and public health considerations, you are strongly encouraged not to attend the meeting in person.
Instead of attending the meeting in person, Shareholders are strongly encouraged to appoint the Chair of the meeting as their proxy and to give instructions on how they wish the Chair to vote on the proposed resolutions. Any shareholder who nonetheless wishes to attend the AGM in person must register in advance by email to info@wresources.com and will be expected to adhere to any special arrangements and safety measures which the Company may put in place on the day and, according to safety and public health considerations and meeting venue restrictions it may not be possible for any shareholders to attend the meeting. All proposed resolutions at the AGM will be put to a vote on a poll.
The current situation is evolving and the Company will make any further announcements that may be required by way of a Regulatory News Service and on the Company's website.
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 which is part of UK law by virtue of the European Union (withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
Final Results for the Year Ended 31 December 2020
W Resources Plc (AIM:WRES), the tungsten, tin and gold mining company with assets in Spain and Portugal, announces its audited financial results for the year ended 31 December 2020.
HIGHLIGHTS
La Parrilla, Tungsten and Tin, Spain
· The Plant Improvement Plan continues to improve the dynamics at the mine.
· Production in H2 was significantly greater than H1 on an actual and a pro-rata basis.
· Plant availability increased to over 90% as the year progressed.
· Recovery rates improved significantly throughout the year.
· Tungsten feed grade continued to rise quarter on quarter.
· Demand for tungsten and tin concentrate continues to grow with customers committed to acquiring all current production.
· Despite the COVID-19 pandemic, the management team and staff at the mine were able to work safely and with minimum disruption.
· The Company was delighted to receive the continued support from BlackRock with an additional US$7m loan to support the continued development of La Parrilla and increase working capital.
Chairman of W, Michael Masterman commented: "Whilst 2020 was a very challenging year for W, progress was made and there was a clear improvement in H2 with greater plant availability and an increase in recoveries which lead to an increase in production. Benefits of the Plant Improvement Programme are being demonstrated throughout the mine at La Parrilla and are set to continue to improve.
As we look ahead, the management team's clear priority is to increase production at La Parrilla as we move to a 24/7 operation in order to increase production towards the stated target of our T2 production target, whilst safeguarding our staff and contractors.
Commodity prices remain robust with European ammonium paratungstate ("APT") pricing remaining strong at US$270-US$280 / mtu and the tin price continuing to strengthen, reaching US$31,000 per tonne.
"We appreciate the continued support of shareholders and are fully committed to reaching our production targets at La Parrilla, which will then transform the business to a profitable mining company with positive cashflow and deliver a turnaround in shareholder value."
Enquiries:
| W Resources Plc Paul Hailes, CFO
| Grant Thornton UK LLP Colin Aaronson / Harrison Clarke / Lukas Girzadas T: +44 (0) 20 7383 5100 |
| Joint Broker Turner Pope Investments (TPI) Ltd Andy Thacker / Zoe Alexander T: +44 (0) 203 657 0050 | Joint Broker Alternative Resource Capital / Shard Capital Alex Wood T:+44 (0) 207 186 9004 Damon Heath T:+44 (0) 207 186 9952 |
| Alma PR Justine James M: +44 (0) 7525 324431 |
W RESOURCES PLC
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2020
2020 was a turbulent year, presenting W Resources ("W" or "the Company") with many challenges from responding to the global pandemic with a business continuity plan to significant plant challenges at the La Parrilla tungsten and tin mine in Spain. The team has overcome many of these challenges and we are confident that W is now on track to deliver growth for our shareholders in the year ahead.
Notwithstanding the challenges faced in 2020, we are resolute in exploiting the opportunity at the La Parrilla mine, with its large-scale production capacity and low-cost structure which we are now more confident than ever will form the basis of our cash generation and expansion in the year ahead.
There is no denying that building a mine of this scale comes with its challenges and whilst we have hit significant hurdles, the team continues to work tirelessly to achieve the best outcome and deliver on our objective of building a world class tungsten mining company.
The Company's strong safety performance continued in 2020 with a total recordable lost time injury frequency rate ("LTIFR") of 16.1 injuries per million hours worked, which is well below the Spanish mining industry average of 46.7. The health and safety of all our employees, contractors and customers remains an absolute priority and we are working hard to ensure we implement all measures necessary to maintain our safety record in the current COVID-19 pandemic.
TUNGSTEN & TIN
La Parrilla - Spain
Overview
La Parrilla is a large-scale, low-cost, long-life tungsten and tin project, located approximately 310km southwest of Madrid. It has Australasian Joint Ore Reserves Committee ("JORC") compliant resources totalling 49 million tonnes ("mt") at a grade of 0.1% of tungsten trioxide ("WO3") and JORC compliant reserves of 29.8mt (as shown in Appendix 1 of the Consolidated Financial Statements).
The first target of the ramp-up remains to reach the target to mine 2mtpa ("million tonnes per annum") of ROM and produce approximately 2,700 tonnes ("t") of tungsten concentrate and 200t of tin ("Sn") concentrate per annum ("T2").
Operations
Whilst production at La Parrilla started to build in the first half of the year, we faced early-stage plant challenges which were compounded by the restrictive conditions of the COVID-19 State of Emergency. These resulted in mine and plant closure and operational limitations on equipment sourcing as well as an increased focus on the day-to-day management of the health & safety of all personnel, which continues to remain a high priority.
Clearly production levels throughout 2020 were not at the level we or our stakeholders expected them to be. The rigorous plant improvement programme, implemented to mitigate against the challenges the plant was experiencing, took longer than we had originally anticipated, however this was completed in Q1 2021 and the Company now looks forward to reaping the benefits of this detailed process.
In the first nine months, recoveries of tungsten and tin continued to improve following a realignment of the mine plan around the high recovery ore in the main fast track mining area and in the pit in general. In Q4, additional improvements were required to the plant as recovery rates slowed, however this has now been resolved. Additional work is required prior to reaching the T2 target.
2020 La Parrilla Production Summary
|
| Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 |
| ROM feed: tonnes mined (wmt) | 273,656 | 253,256 | 171,454 | 261,841 |
| Strip ratio | 1.07 | 0.58 | 1.38 | 1.19 |
| Jig plant: tonnes processed (dmt) | 240,926 | 228,060 | 148,417 | 236,677 |
|
|
|
|
|
|
| WO3 feed grade (ppm) | 800 | 845 | 857 | 943 |
| WO3 recovery (%) | 17% | 16% | 30% | 31% |
| WO3 concentrate (dmt) | 58.9 | 47.6 | 54.7 | 100.0 |
| WO3 concentrate grade (%) | 56.1 | 57.4 | 69.8 | 67.0 |
| WO3 contained metal (mtu) | 3,306 | 2,756 | 3,820 | 6,698 |
|
|
|
|
|
|
| Sn feed grade (ppm) | 282 | 307 | 181 | 321 |
| Sn recovery (%) | 22% | 25% | 37% | 26% |
| Sn concentrate (dmt) | 23.3 | 41.2 | 22.9 | 33.4 |
| Sn concentrate grade (%) | 51.9 | 48.5 | 42.7 | 56.3 |
| Sn contained metal (dmt) | 12.1 | 20.0 | 9.8 | 18.8 |
|
|
|
|
|
|
| Total concentrate (dmt) | 82.2 | 88.8 | 77.6 | 133.4 |
| Total contained metal (dmt) | 45.2 | 47.6 | 48.0 | 85.8 |
* Each quarter was based on the following 24h working days per week:
- Q1 2020 on 7 days per week
- Q2 2020 on 7 days per week
- Q3 2020 on 3 days per week
- Q4 2020 on 4 days per week
Tungsten and Tin sales in a challenging global environment
W shipped 251.3t of tungsten concentrate and 105.0t tin concentrate for the 12 months to December 2020, with offtake partners committed to all of T2 production.
|
| Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | Q1 2021 |
| Tungsten concentrate (t) | 30.1 | 58.9 | 62.1 | 100.2 | 59.2 |
| Tin concentrate (t) | 20.2 | 20.6 | 38.1 | 26.1 | 20.0 |
PORTUGUESE PROJECTS
Status of Portuguese Mining and Exploration Licences
Unfortunately, granting of all new licences and extensions has been delayed due to changes that have to be made to Portuguese mining law combined with the challenges Portugal endured in 2020 with the COVID-19 crisis and associated state of emergency. Management is, however, confident that, given the encouraging exploration results, and given that no other company has applied for the permits in these areas, combined with strong support from respective local authorities, these licences will be granted. The Company has received assurances to this effect.
Régua Tungsten Mine
Overview
This high-grade, development-ready tungsten project with low capital cost has a trial mine licence, and an updated JORC compliant mineral resource of 4.47Mt at a grade of 0.27% WO3, including an indicated resource of 3.74mt at a grade of 0.28% WO3, which was completed by Golder Associates Pty Ltd ("Golder") in January 2020.
Régua has significant synergies with La Parrilla as it has materially lower capital costs and will increase La Parrilla's final concentrate production.
Development Strategy
Régua was W's second mine to come on stream. Mining operations commenced in early February 2020, targeting the first of two adits with skarn ore zones intersected in the initial development. Engineering and procurement for the construction of the plant are also at an advanced stage.
Unfortunately, Portuguese COVID-19 related restrictions resulted in the halting of mining activities which we were not able to recommence prior to the expiry of the trial mine licence on 20 September 2020. Management submitted an application to the Portuguese mining authorities for the full mining licence on 16 June 2020. Mining and plant construction will recommence once the full licence has been granted. In the meanwhile, environmental work continues.
Tarouca Exploration
Although this licence expired on 23 March 2019, the Company presented a request for a new exploration licence before it expired, on 5 February 2019, to protect the Company's right to the area. We expect to be able to tie in operations at Tarouca to the Régua mining and processing operations once the updated licence is granted.
CAA Portalegre - Gold
Overview
São Martinho currently has a JORC 2012 gold resource of over 110,000oz. Results from the drilling campaigns in 2017 and 2018 provided a solid base to drive extension drilling with the potential for a materially larger resource.
Development Strategy
We initially advanced São Martinho through a successful drilling programme and we are still waiting for approval of our application for a trial mine and gold production licence submitted in September 2018. We expect the trial mine licence to be granted in due course, however we have no guidance on a timeframe at this point in time.
Once granted, there is an opportunity to pursue a drilling programme to expand the resource and resolve the geological interpretations of a flat lying structure (Golder) and a deeply dipping structure (SRK) which have partially arisen due to the combination of structural complexity and multistage mineralising events.
This is particularly important as a trial mine is a key level of licence tenure and will provide the authority to mine shallow ore and produce gold on a pilot basis.
We continue to explore opportunities to bring in Joint Venture or Farm-In partners parties to monetise the gold discovery.
Finance
During the year the management team has worked diligently to ensure sufficient funds were available to both fund the development of the La Parrilla mine and provide significant working capital. This is evidenced by:
In February 2020, W finalised a €5m facility with the Spanish bank, Banco Santander, S.A ("Santander") which repaid the €3m loan from Caja Rural de Extremadura ("Caja Rural") and provided a net €2m of additional working capital and liquidity. The loan was repaid following receipt of €5.2m proceeds of the Grant Funds in May 2021.
This was followed in March 2020 by a Placing to raise £0.76m to new Spanish investors, to advance Régua and provide additional support for working capital.
In parallel, the Spanish government, as part of the State of Emergency, announced it is set to provide guarantees of up to 90% of funds to back companies affected by the pandemic. Subsequently, in July 2020, W signed a series of new Spanish government guaranteed loan facilities with Spanish banks. Under the COVID-19 state of emergency, the Spanish state-owned bank (attached to the Ministry of Economy and Business), the Instituto de Crédito Oficial ("ICO"), provided loan guarantees of up to 80% of loan value to Spanish banks providing loans to Spanish companies, which are also referred to as ICOs. €1.82m of such facilities at annual interest rates of 2-3% pa was secured with four major banks: CaixaBank, S.A, Bankinter, S.A, Banco Bilbao Vizcaya Argentaria, S.A ("BBVA") and the Caja Rural de Extremadura. These facilities refinance and extend the maturity of some existing lines, providing a net €1.02m of additional working capital
funding. All loan agreements and extensions are to the Company's 100% owned subsidiary, Iberian Resources Spain
In March 2020, W secured a £4.0m convertible bond facility from Atlas Capital Markets ("Atlas") comprising a convertible bond with a coupon of 5% and a term of 3 years. The facility can be drawn in tranches of up to £500,000 at the election of W, with an agreed period between subsequent drawdowns. The facility is unsecured and subordinated to the BlackRock Financial Management Inc. ("BlackRock") loan facility with BlackRock consent required for a draw. Atlas can convert the bond to W shares by issuing a conversion notice with the price set at 95% of the selected 3-day VWAP in the 15 days leading up to issue of a conversion notice by Atlas. Warrants will be issued with each tranche on a pro rata basis, with 5,555,555 Warrants issued at a subscription price of 0.36 pence per Ordinary Share per £100,000 principal amount of Convertible Bonds that are issued. The Warrants have a 3 year expiry term.
In August 2020, W drew down its first £500,000 tranche from the £4m Atlas convertible bond facility and this was the only draw down of its kind for the year. 27,777,775 warrants with a 3 year expiry term were also issued to Atlas as part of the drawdown.
In October 2020, BlackRock Financial Management Inc. agreed to increase W's existing loan facility by an additional US$7 million.
BlackRock continues to show its support for W with regard to agreeing Payment in Kind ("PIK") payments for several quarterly interest payments. The Company had entered into a Credit Facility with one or more funds managed by BlackRock to provide a secured term loan to the Company to fund the La Parrilla mine development (the "Loan Facility"). The Company and BlackRock finalised and executed an amendment agreement to allow payment of interest by PIK for the May, August and the November 2020 interest payments and the Company announced an extension to the facility of US$7 million on 8 October 2020.
Tungsten and Tin
The European APT price traded under pressure for most of 2020 with most end users out of the spot market due to persistently weak demand for tungsten products, while limited volumes of material were being shipped out of China (source: Fastmarkets MB). Tungsten prices during the first half 2021 have been supported by tightening supply and healthy end-user demand and prices currently sit around US$270-278 per mtu, which is in line with budget expectations.
Tin prices on the London Metal Exchange started 2020 trading at US$17,125 per metric ton and following a short lived downturn when COVID-19 took over news headlines the price steadily rose and closed the year at US$20,540 per metric ton. 2021 has seen an extremely tight worldwide supply of tin, resulting in a cash price near 10-year highs, surpassing US$30,000 per metric ton on several occasions (source: Fastmarkets MB).
Board and Management Update
In March 2020, we announced that Dr Byron Pirola retired from the Board after 12 years as a Director, due to increasing business demands on his time.
In November 2020, Pablo Neira was appointed Executive Director, following two years as a Non-Executive Director of the Company.
In addition, as part of the strengthening of the W Resources management team, Paul Hailes was appointed Chief Financial Officer, a non-board appointment, working on a part-time basis. Paul brings extensive capital markets, financial and commercial experience to the team, having previously held the role of Group Finance Director of AIM quoted Immunodiagnostic Systems plc and Non-Executive Director at Utilitywise plc.
Outlook
2020 was a very difficult year for the Company and the world at large with the Covid-19 pandemic, however, as we continue to prioritise our efforts at the La Parrilla mine steps taken last year should begin to feed through in H2 2021 as we:
· Look to permanently solve our water issue and re-access our higher-grade ore bodies
· Produce between 880t and 1,000t of concentrate for the twelve months ending 31 December 2021
· Move production at La Parrilla mine back to a 24/7 basis and get close to a T2 run-rate in Q4 2021
· At our earliest opportunity, re-commence mining activities at our tungsten mine in Régua, Portugal
· Move to an initial breakeven period and then migrate to a profit generating company as we see positive operational cashflow and a turnaround in shareholder value.
The management team with the strong support of the board continue to progress the Company's plan of reaching T2 as well as keeping its staff and contractors safe and well in these troubling times.
_________________
Michael Masterman
Chairman
W Resources Plc
W RESOURCES PLC
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
|
|
| 2020 |
| 2019 |
| CONTINUING OPERATIONS | Notes | €'000 |
| €'000 |
|
|
|
|
|
|
| Revenue | 2 | 2,513 |
| 365 |
|
|
|
|
|
|
| Cost of sales |
| (2,513) |
| (343) |
|
|
|
|
|
|
| GROSS PROFIT |
| - |
| 22 |
|
|
|
|
|
|
| Operating expenses |
| (845) |
| (498) |
| Administrative expenses |
| (1,604) |
| (768) |
| Impairment of intangible assets | 9 | (2,257) |
| - |
| Impairment of tangible assets | 10 | (1,276) |
| - |
|
|
|
|
|
|
| OPERATING LOSS |
| (5,982) |
| (1,244) |
|
|
|
|
|
|
| Exchange gains / (losses) |
| 4,267 |
| (498) |
| Finance costs | 4 | (1,767) |
| (1,200) |
|
|
|
|
|
|
| LOSS BEFORE INCOME TAX | 5 | (3,482) |
| (2,942) |
|
|
|
|
|
|
| Income tax | 6 | - |
| - |
|
|
|
|
|
|
| LOSS FOR THE YEAR |
| (3,482) |
| (2,942) |
|
|
|
|
|
|
|
|
|
|
|
|
| OTHER COMPREHENSIVE INCOME
|
|
|
|
|
| OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
| - |
| - |
|
|
|
|
|
|
| TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
| (3,482) |
| (2,942) |
|
|
|
|
|
|
| Loss attributable to: |
|
|
|
|
| Owners of the parent |
| (3,482) |
| (2,942) |
|
|
|
|
|
|
| Total comprehensive income attributable to: |
|
|
|
|
| Owners of the parent |
| (3,482) |
| (2,942) |
|
|
|
|
|
|
| Loss per share expressed in pence per share: | 8 |
|
|
|
| Basic |
| -0.05 |
| -0.05 |
| Diluted |
| -0.05 |
| -0.05 |
|
|
|
|
|
|
W RESOURCES PLC (REGISTERED NUMBER: 04782584)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 DECEMBER 2020
| ASSETS |
| 2020 |
| 2019 |
| NON-CURRENT ASSETS | Notes | €'000 |
| €'000 |
| Owned |
|
|
|
|
| Intangible assets | 9 | 41,157 |
| 31,882 |
| Property, plant and equipment | 10 | 31,877 |
| 30,103 |
| Investments | 11 | - |
| - |
|
|
| 73,034 |
| 61,985 |
|
|
|
|
|
|
| CURRENT ASSETS |
|
|
|
|
| Inventories | 12 | 1,174 |
| 415 |
| Trade and other receivables | 13 | 7,296 |
| 6,580 |
| Cash and cash equivalents | 14 | 956 |
| 2,460 |
|
|
| 9,426 |
| 9,455 |
|
|
|
|
|
|
| TOTAL ASSETS |
| 82,460 |
| 71,440 |
|
|
|
|
|
|
|
|
|
|
|
|
| EQUITY |
|
|
|
|
| SHAREHOLDERS' EQUITY |
|
|
|
|
| Called up share capital | 15 | 8,820 |
| 7,822 |
| Share premium | 16 | 37,694 |
| 36,658 |
| Share based payment reserve | 16 | 2,003 |
| 1,622 |
| Merger reserve | 16 | 1,014 |
| 1,014 |
| Retained earnings | 16 | (31,394) |
| (28,027) |
|
|
|
|
|
|
| TOTAL EQUITY |
| 18,137 |
| 19,089 |
|
|
|
|
|
|
| LIABILITIES |
|
|
|
|
| NON-CURRENT LIABILITIES |
|
|
|
|
| Financial liabilities - borrowings |
|
|
|
|
| Interest bearing loans and borrowings | 18 | 51,626 |
| 44,312 |
|
|
|
|
|
|
| CURRENT LIABILITIES |
|
|
|
|
| Trade and other payables | 17 | 6,734 |
| 3,978 |
| Financial liabilities - borrowings |
|
|
|
|
| Interest bearing loans and borrowings | 18 | 5,963 |
| 4,061 |
|
|
| 12,697 |
| 8,039 |
|
|
|
|
|
|
| TOTAL LIABILITIES |
| 64,323 |
| 52,351 |
|
|
|
|
|
|
| TOTAL EQUITY AND LIABILITIES |
| 82,460 |
| 71,440 |
As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not presented as part of these financial statements. The parent company's profit for the financial year is disclosed in Note 7.
The financial statements were approved by the Board of Directors and authorised for issue on 3 June 2021 and were signed on its behalf by:
..........................................
Mr Michael Masterman
Chairman
W RESOURCES PLC (REGISTERED NUMBER: 04782584)
COMPANY STATEMENT OF FINANCIAL POSITION
31 DECEMBER 2020
| ASSETS |
| 2020 |
| 2019 |
| NON-CURRENT ASSETS | Notes | €'000 |
| €'000 |
|
|
|
|
|
|
| Investments | 11 | 6,695 |
| 6,695 |
|
|
| 6,695 |
| 6,695 |
|
|
|
|
|
|
| CURRENT ASSETS |
|
|
|
|
| Trade and other receivables | 13 | 77,020 |
| 63,185 |
| Cash and cash equivalents | 14 | 65 |
| 1,670 |
|
|
| 77,085 |
| 64,855 |
|
|
|
|
|
|
| TOTAL ASSETS |
| 83,780 |
| 71,550 |
|
|
|
|
|
|
|
|
|
|
|
|
| EQUITY |
|
|
|
|
| SHAREHOLDERS' EQUITY |
|
|
|
|
| Called up share capital | 15 | 8,820 |
| 7,822 |
| Share premium | 16 | 37,694 |
| 36,658 |
| Share based payment reserve | 16 | 2,003 |
| 1,622 |
| Merger reserve | 16 | 1,014 |
| 1,014 |
| Retained earnings | 16 | (16,570) |
| (20,586) |
|
|
|
|
|
|
| TOTAL EQUITY |
| 32,961 |
| 26,530 |
|
|
|
|
|
|
| LIABILITIES |
|
|
|
|
| NON-CURRENT LIABILITIES |
|
|
|
|
| Financial liabilities - borrowings |
|
|
|
|
| Interest bearing loans and borrowings | 18 | 49,781 |
| 44,273 |
|
|
|
|
|
|
| CURRENT LIABILITIES |
|
|
|
|
| Trade and other payables | 17 | 704 |
| 747 |
| Financial liabilities - borrowings |
|
|
|
|
| Interest bearing loans and borrowings | 18 | 334 |
| - |
|
|
| 1,038 |
| 747 |
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL LIABILITIES |
| 50,819 |
| 45,020 |
|
|
|
|
|
|
| TOTAL EQUITY AND LIABILITIES |
| 83,780 |
| 71,550 |
The financial statements were approved by the Board of Directors and authorised for issue on 3 June 2021 and were signed on its behalf by:
..........................................
Mr Michael Masterman
Chairman
W RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
|
|
|
|
|
|
|
| Share |
|
|
|
|
|
|
|
| Called up |
|
|
|
|
| Based |
|
|
|
|
|
|
|
| Share |
| Retained |
| Share |
| Payment |
| Merger |
| Translation |
| Total |
|
| Capital |
| Earnings |
| Premium |
| Reserve |
| Reserve |
| Reserve |
| Equity |
|
| €'000 |
| €'000 |
| €'000 |
| €'000 |
| €'000 |
| €'000 |
| €'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance at 1 January 2019 | 7,137 |
| (21,294) |
| 34,418 |
| 1,622 |
| 1,014 |
| (3,791) |
| 19,106 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Changes in equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total comprehensive income | - |
| (2,942) |
| - |
| - |
| - |
| - |
| (2,942) |
| Issue of share capital | 685 |
| - |
| 2,240 |
| - |
| - |
| - |
| 2,925 |
| Transfer between reserves | - |
| (3,791) |
| - |
| - |
| - |
| 3,791 |
| - |
| Total transactions with owners recognised directly in equity | 685 |
| - |
| 2,240 |
| - |
| - |
| - |
| 2,925 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance at 31 December 2019 | 7,822 |
| (28,027) |
| 36,658 |
| 1,622 |
| 1,014 |
| - |
| 19,089 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Changes in equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total comprehensive income | - |
| (3,482) |
| - |
| - |
| - |
| - |
| (3,482) |
| Issue of share capital | 998 |
| - |
| 1,036 |
| - |
| - |
| - |
| 2,034 |
| Issue of share warrants and options | - |
| - |
| - |
| 496 |
| - |
| - |
| 496 |
| Transfer between reserves | - |
| 115 |
| - |
| (115) |
| - |
| - |
| - |
| Total transactions with owners recognised directly in equity | 998 |
| - |
| 1,036 |
| 496 |
| - |
| - |
| 2,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance at 31 December 2020 | 8,820 |
| (31,394) |
| 37,694 |
| 2,003 |
| 1,014 |
| - |
| 18,137 |
W RESOURCES PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
|
|
|
|
|
|
|
| Share |
|
|
|
|
|
|
|
| Called up |
|
|
|
|
| Based |
|
|
|
|
|
|
|
| Share |
| Retained |
| Share |
| Payment |
| Merger |
| Translation |
| Total |
|
| Capital |
| Earnings |
| Premium |
| Reserve |
| Reserve |
| Reserve |
| Equity |
|
| €'000 |
| €'000 |
| €'000 |
| €'000 |
| €'000 |
| €'000 |
| €'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance at 1 January 2019 | 7,137 |
| (14,207) |
| 34,418 |
| 1,622 |
| 1,014 |
| (5,683) |
| 24,301 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Changes in equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Issue of share capital | 685 |
| - |
| 2,240 |
| - |
| - |
| - |
| 2,925 |
| Total comprehensive income | - |
| (696) |
| - |
| - |
| - |
| - |
| (696) |
| Transfer between reserves | - |
| (5,683) |
| - |
| - |
| - |
| 5,683 |
| - |
| Total transactions with owners recognised directly in equity | 685 |
| - |
| 2,240 |
| - |
| - |
| - |
| 2,925 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance at 31 December 2019 | 7,822 |
| (20,586) |
| 36,658 |
| 1,622 |
| 1,014 |
| - |
| 26,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Changes in equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Issue of share capital | 998 |
| - |
| 1,036 |
| - |
| - |
| - |
| 2,034 |
| Total comprehensive income | - |
| 3,092 |
| - |
| - |
| - |
| - |
| 3,092 |
| Issue of share warrants and options | - |
| - |
| - |
| 496 |
| - |
| - |
| 496 |
| Transfer between reserves | - |
| 115 |
| - |
| (115) |
| - |
| - |
| - |
| Total transactions with owners recognised directly in equity | 998 |
| - |
| 1,036 |
| 496 |
| - |
| - |
| 2,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance at 31 December 2020 | 8,820 |
| (16,569) |
| 37,694 |
| 2,003 |
| 1,014 |
| - |
| 32,962 |
W RESOURCES PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
|
|
| 2020 |
| 2019 |
| Cash flows from operating activities | Notes | €'000 |
| €'000 |
|
|
|
|
|
|
| Cash generated from operations | 1 | 785 |
| (4,592) |
| Interest paid |
| (377) |
| (146) |
| Finance costs paid |
| (1,639) |
| (426) |
| Net cash from operating activities |
| (1,231) |
| (5,164) |
|
|
|
|
|
|
| Cash flows from investing activities |
|
|
|
|
| Purchase of intangible fixed assets |
| (7,446) |
| (7,343) |
| Purchase of tangible fixed assets |
| (1,896) |
| (4,235) |
| Net cash from investing activities |
| (9,342) |
| (11,578) |
|
|
|
|
|
|
| Cash flows from financing activities |
|
|
|
|
| New loans in year |
| 10,639 |
| 9,050 |
| Loan repayments in year |
| (3,000) |
| - |
| New hire purchases in year |
| - |
| 58 |
| Payment of lease liabilities |
| (11) |
| (8) |
| Amount introduced by directors |
| - |
| 390 |
| Amount withdrawn by directors |
| (390) |
| - |
| Share issue |
| 379 |
| 685 |
| Share issue premium |
| 896 |
| 2,329 |
| Share issue costs |
| - |
| (89) |
| New convertible bonds in the year |
| 556 |
| - |
| Net cash from financing activities |
| 9,069 |
| 12,415 |
|
|
|
|
|
|
| Decrease in cash and cash equivalents |
| (1,504) |
| (4,327) |
| Cash and cash equivalents at beginning of year | 2 | 2,460 |
| 6,787 |
| Cash and cash equivalents at end of year | 2 | 956 |
| 2,460 |
Material non-cash movements
During the year the company settled outstanding creditors of €538,000 (2019: Nil) through the issue of ordinary shares. (note 15)
W RESOURCES PLC
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
|
|
| 2020 |
| 2019 |
| Cash flows from operating activities | Notes | €'000 |
| €'000 |
|
|
|
|
|
|
| Cash generated from operations | 1 | (6,782) |
| (12,364) |
| Interest paid |
| (1) |
| - |
| Finance costs paid |
| (1,260) |
| (426) |
| Net cash from operating activities |
| (8,043) |
| (12,790) |
|
|
|
|
|
|
| Cash flows from investing activities |
|
|
|
|
| Interest received |
| 1,518 |
| 1,297 |
| Net cash from investing activities |
| 1,518 |
| 1,297 |
|
|
|
|
|
|
| Cash flows from financing activities |
|
|
|
|
| New loans in year |
| 3,479 |
| 5,000 |
| New convertible bonds in the year |
| 556 |
| - |
| Amount introduced by directors |
| - |
| 390 |
| Amount withdrawn by directors |
| (390) |
| - |
| Share issue |
| 379 |
| 685 |
| Share premium |
| 896 |
| 2,329 |
| Share issue costs |
| - |
| (89) |
| Net cash from financing activities |
| 4,920 |
| 8,315 |
|
|
|
|
|
|
| Decrease in cash and cash equivalents |
| (1,605) |
| (3,178) |
| Cash and cash equivalents at beginning of year | 2 | 1,670 |
| 4,848 |
| Cash and cash equivalents at end of year | 2 | 65 |
| 1,670 |
Material non-cash movements
During the year the company settled outstanding creditors of €538,000 (2019: Nil) through the issue of ordinary shares. (note 15)
W RESOURCES PLC
NOTES TO THE STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
1. RECONCILIATION OF PROFIT / (LOSS) BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS
|
| 2020 |
| 2019 |
| Group | €'000 |
| €'000 |
|
|
|
|
|
| Loss before income tax | (3,482) |
| (2,942) |
| Depreciation charges | 307 |
| 280 |
| Impairment of intangible assets | 2,257 |
|
|
| Impairment of tangible assets | 1,276 |
|
|
| Exchange gains on loans | (4,305) |
| - |
| Share based payments | 538 |
| - |
| Share warrants issued | 494 |
| - |
| Share options issued | 2 |
| - |
| Finance costs | 1,767 |
| 1,200 |
|
| (1,146) |
| (1,462) |
|
|
|
|
|
| Increase in inventories | (759) |
| (236) |
| Increase in trade and other receivables | (464) |
| (628) |
| (Decrease) / increase in trade and other payables | 3,154 |
| (2,266) |
| Cash generated from operations | 785 |
| (4,592) |
|
|
|
|
|
|
|
|
|
|
|
| 2020 |
| 2019 |
| Company | €'000 |
| €'000 |
|
|
|
|
|
| Profit / (loss) before income tax | 3,902 |
| (696) |
| Exchange gains on loans | (4,304) |
| - |
| Increase in inter-group loans | (7,448) |
| (11,383) |
| Share warrants issued | 494 |
| - |
| Share options issued | 2 |
| - |
| Share based payments | 538 |
| - |
| Finance costs | 1,173 |
| 872 |
| Finance income | (1,518) |
| (1,297) |
|
| (7,161) |
| (12,504) |
|
|
|
|
|
| (Increase) / decrease in trade and other receivables | 13 |
| (10) |
| Increase in trade and other payables | 366 |
| 150 |
| Cash generated from operations | (6,782) |
| (12,364) |
2. CASH AND CASH EQUIVALENTS
The amounts disclosed on the Statements of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:
|
| Group | Company |
| ||||||
|
|
|
|
| ||||||
|
| 31 December 2020 |
| 1 January 2020 |
| 31 December 2020 |
| 1 January 2020 | ||
|
| €'000 |
| €'000 |
| €'000 |
| €'000 | ||
| Year ended 31 December 2020 |
|
|
|
|
|
|
| ||
| Cash and cash equivalents | 956 |
| 2,460 |
| 65 |
| 1,670 | ||
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
| ||
|
| 31 December 2019 |
| 1 January 2019 |
| 31 December 2019 |
| 1 January 2019 | ||
|
| €'000 |
| €'000 |
| €'000 |
| €'000 | ||
| Year ended 31 December 2019 |
|
|
|
|
|
|
| ||
| Cash and cash equivalents | 2,460 |
| 6,787 |
| 1,670 |
| 4,848 | ||
Reconciliation of Net debt
| Group | At Jan 2020 | Cash flows | Non cash changes | At 31 December 2020 | ||||
|
|
|
| Foreign exchange movement | Interest capitalised | Bonds converted to equity |
| ||
|
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | ||
| Cash and Cash equivalents |
|
|
|
|
|
| ||
| Cash | 2,460 | (1,504) | - | - | - | 956 | ||
|
|
|
|
|
|
|
| ||
| Borrowings |
|
|
|
|
|
| ||
| Debt due within one year | (200) | (5,975) | 1 | - | 221 | (5,953) | ||
| Debt due after 1 year | (48,123) | (2,231) | 4,304 | (5,547) | - | (51,597) | ||
| Hire Purchases | (50) | 11 |
|
|
| (39) | ||
|
| (48,373) | (8,195) | 4,305 | (5,547) | 221 | (57,589) | ||
| Total | (45,913) | (9,699) | 4,305 | (5,547) | 221 | (56,633) | ||
|
|
|
|
|
|
|
| ||
|
|
|
|
|
| ||||
| Company | At Jan 2020 | Cash flows | Non cash changes | At 31 December 2020 | ||||
|
|
|
| Foreign exchange movement | Interest capitalised | Bonds converted to equity |
| ||
|
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | ||
| Cash and Cash equivalents |
|
|
|
|
|
| ||
| Cash | 1,670 | (1,605) |
|
|
| 65 | ||
|
|
|
|
|
|
|
| ||
| Borrowings |
|
|
|
|
|
| ||
| Debt due within one year | - | (556) | 1 |
| 221 | (334) | ||
| Debt due after 1 year | (44,273) | (3,479) | 4,304 | (6,333) |
| (49,781) | ||
|
| (44,273) | (4,035) | 4,305 | (6,333) | 221 | (50,115) | ||
| Total | (42,603) | (5,640) | 4,305 | (6,333) | 221 | (50,050) | ||
W RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1. ACCOUNTING POLICIES
The accounting policies of the Company are set out in full in the Annual Report and Accounts
2. SEGMENTAL REPORTING
| 2019 |
|
|
|
| Mineral |
|
|
|
|
|
| Corporate |
| Exploration |
| Total |
| By Business Segment: |
|
| €'000 |
| €'000 |
| €'000 |
|
|
|
|
|
|
|
|
|
| Revenue |
|
| - |
| 365 |
| 365 |
| Gain / (loss) for the year |
|
| (2,009) |
| (933) |
| (2,942) |
|
|
|
|
|
|
|
|
|
| Balance Sheet | - Segment Assets |
| 4,881 |
| 66,559 |
| 71,440 |
|
| - Segment Liabilities |
| (44,959) |
| (7,392) |
| (52,351) |
| Net Assets |
|
| (40,078) |
| 59,167 |
| 19,089 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| By Geographical Sector |
|
| Iberia |
| UK |
| Total |
|
|
|
| €'000 |
| €'000 |
| €'000 |
|
|
|
|
|
|
|
|
|
| Revenue |
|
| 365 |
| - |
| 365 |
| Gain / (loss) for the year |
|
| (933) |
| (2,009) |
| (2,942) |
|
|
|
|
|
|
|
|
|
| Balance Sheet | - Segment Assets |
| 66,559 |
| 4,881 |
| 71,440 |
|
| - Segment Liabilities |
| (7,392) |
| (44,959) |
| (52,351) |
| Net Assets |
|
| 59,167 |
| (40,078) |
| 19,089 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2020 |
|
|
|
| Mineral |
|
|
|
|
|
| Corporate |
| Exploration |
| Total |
| By Business Segment: |
|
| €'000 |
| €'000 |
| €'000 |
|
|
|
|
|
|
|
|
|
| Revenue |
|
| - |
| 2,513 |
| 2,513 |
| Gain / (loss) for the year |
|
| 2,384 |
| (5,866) |
| (3,482) |
|
|
|
|
|
|
|
|
|
| Balance Sheet | - Segment Assets |
| 3,350 |
| 79,110 |
| 82,460 |
|
| - Segment Liabilities |
| (50,764) |
| (13,559) |
| (64,323) |
| Net Assets |
|
| (47,414) |
| 65,551 |
| 18,137 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| By Geographical Sector |
|
| Iberia |
| UK |
| Total |
|
|
|
| €'000 |
| €'000 |
| €'000 |
|
|
|
|
|
|
|
|
|
| Revenue |
|
| 2,513 |
| - |
| 2,513 |
| Gain / (loss) for the year |
|
| (5,866) |
| 2,384 |
| (3,482) |
|
|
|
|
|
|
|
|
|
| Balance Sheet | - Segment Assets |
| 79,110 |
| 3,350 |
| 82,460 |
|
| - Segment Liabilities |
| (13,559) |
| (50,764) |
| (64,323) |
| Net Assets |
|
| 65,551 |
| (47,414) |
| 18,137 |
3. EMPLOYEES AND DIRECTORS
During the year €2,508,000 (2019: €1,614,000) of staff costs were capitalised in Intangible Assets within the group.
W Resources Plc had no staff during the year and therefore no staff costs.
The average monthly number of employees during the year was as follows:
|
| 2020 |
| 2019 |
| Management & Administration | 4 |
| 4 |
| Technical | 68 |
| 44 |
|
| 2020 | ||||
|
| Share |
|
|
| Directors |
|
| Options |
| Consultancy |
| Fees |
|
| €'000 |
| €'000 |
| €'000 |
| Michael Masterman | - |
| 221 |
| - |
| Byron Pirola (resigned 30 March 2020) | - |
| - |
| - |
| David Garland | - |
| - |
| 16 |
| Pablo Neira | - |
| - |
| 117 |
| James Argalas | - |
| - |
| 24 |
| Oscar Marin Garcia (appointed 8 January 2020 / resigned 12 February 2021) | 2 |
| - |
| 24 |
| Total | 2 |
| 221 |
| 181 |
|
| 2019 | ||||
|
| Share |
|
|
| Directors |
|
| Options |
| Consultancy |
| Fees |
|
| €'000 |
| €'000 |
| €'000 |
| Michael Masterman | - |
| 304 |
| - |
| Byron Pirola (resigned 30 March 2020) | - |
| - |
| - |
| David Garland | - |
| - |
| 16 |
| Pablo Neira | - |
| - |
| 48 |
| James Argalas | - |
| - |
| 24 |
| Oscar Marin Garcia (appointed 8 January 2020 / resigned 12 February 2021) | - |
| - |
| - |
| Total | - |
| 304 |
| 88 |
4. NET FINANCE COSTS
|
| 2020 |
| 2019 |
| Finance costs: | €'000 |
| €'000 |
| Other finance costs | 377 |
| 146 |
| Amortisation of loan costs | 1,390 |
| 1,054 |
|
| 1,767 |
| 1,200 |
5. PROFIT / (LOSS) BEFORE INCOME TAX
The loss before income tax is stated after charging / (crediting):
|
| 2020 |
| 2019 |
|
| €'000 |
| €'000 |
| Cost of inventories recognised as expense | 2,513 |
| 343 |
| Depreciation - owned assets | 238 |
| 218 |
| Exploration & evaluation costs amortisation | 69 |
| 61 |
| Auditors' remuneration | 40 |
| 33 |
| Impairment of intangible assets (note 10) | 2,257 |
| - |
| Impairment of tangible assets (note 10) | 1,276 |
| - |
| Foreign exchange differences | (4,267) |
| 495 |
A total of €125,000 (2019: €304,000) relating to Michael Masterman's consultancy fees were capitalised in intangible assets in 2020.
6. INCOME TAX
Analysis of tax expense
No liability to corporation tax arose for the year ended 31 December 2020 nor for the year ended 31 December 2019.
Reconciliation of the tax expense
|
| 2020 |
| 2019 |
|
| €'000 |
| €'000 |
|
|
|
|
|
| Loss before income tax | (3,482) |
| (2,942) |
|
|
|
|
|
| Profit / (Loss) multiplied by a rate of corporation tax |
|
|
|
| of 31.6% (2019 - 23.4%) | (1,099) |
| (687) |
|
|
|
|
|
| Effects of:
|
|
| - |
| Accelerated capital allowances |
|
|
|
| Effect of different tax rates in other jurisdictions | (361) |
| (8) |
| Intercompany interest not yet recognised in Spain and Portugal | 479 |
| 304 |
| Share options and warrants issued | 5 |
| - |
| Depreciation | 97 |
| 65 |
| Impairment of tangible assets | 1,116 |
| - |
| Accelerated capital allowances | - |
| (356) |
|
|
|
|
|
| Adjustment to losses with no recognisable deferred tax asset | (238) |
| 682 |
|
|
|
|
|
| Tax expense | - |
| - |
|
|
|
|
|
The weighted average applicable tax rate of 31.6% (2019: 23.4%) is a combination of 19% the standard rate of corporation tax in the UK, 25% the rate of corporation tax in Spain and 21% the rate of corporation tax in Portugal.
No deferred tax asset has been recognised in accordance with IAS 12, for carried forward tax losses, due to uncertainty as to when profits will be recognised against which these losses can be relieved. The Group has approximately €13,624,000 (2019: €15,221,000) of tax losses carried forward for use against future taxable profits. These losses does not include the interest charged from W resources to its subsidiaries, which has been recognised in income in W Recourses but has not yet been recognised in Spain and Portugal, these costs will be recognised and relieved when paid. These total a further €5,284,000 (2019: €3,766,000)
7. PROFIT OF PARENT COMPANY
As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not presented as part of these financial statements. The parent company's profit for the financial year was €3,902,000 (2019: Loss (€696,000)). Included within these figures are intra-group interest received of €1,518,000 (2019: €1,298,000).
8. EARNINGS PER SHARE
Basic loss per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares. The share options and warrants issued during 2016, 2018, 2019 and 2020 are considered to be anti-dilutive in 2019 in accordance with IAS 33 as on conversion they would decrease loss per share from continuing operations.
| Reconciliations are set out below: | 2020 | ||||
|
|
|
| Weighted Average |
| Per Share |
|
| Loss |
| Number of Shares |
| Amount |
|
| €'000 |
| (millions) |
| Pence |
| Basic earnings per share |
|
|
|
|
|
| Earnings attributable to ordinary shareholders | (3,482) |
| 6,795 |
| -0.05 |
| Effect of dilutive securities |
|
|
|
|
|
| Options and warrants | - |
| - |
| - |
|
|
|
|
|
|
|
| Diluted earnings per share |
|
|
|
|
|
| Adjusted earnings | (3,482) |
| 6,795 |
| -0.05 |
|
| 2019 | ||||
|
|
|
| Weighted Average |
| Per Share |
|
| Loss |
| Number of Shares |
| Amount |
|
| €'000 |
| (millions) |
| Pence |
| Basic earnings per share |
|
|
|
|
|
| Earnings attributable to ordinary shareholders | (2,942) |
| 6,018 |
| -0.05 |
| Effect of dilutive securities | - |
| - |
| - |
|
|
|
|
|
|
|
| Diluted earnings per share |
|
|
|
|
|
| Adjusted earnings | (2,942) |
| 6,018 |
| -0.05 |
9. INTANGIBLE ASSETS
|
| Exploration |
| Group | & Evaluation |
|
| Costs |
| COST | €'000 |
|
|
|
| At 1 January 2020 | 32,616 |
| Additions | 11,601 |
| At 31 December 2020 | 44,217 |
|
|
|
| AMORTISATION |
|
| At 1 January 2020 | 734 |
| Amortisation for year | 69 |
| Impairment | 2,257 |
| At 31 December 2020 | 3,060 |
|
|
|
| NET BOOK VALUE |
|
| At 31 December 2020 | 41,157 |
|
| Exploration |
| Group | & Evaluation |
|
| Costs |
| COST | €'000 |
|
|
|
| At 1 January 2019 | 27,282 |
| Additions | 10,567 |
| Reclassification / transfer | (5,233) |
| At 31 December 2019 | 32,616 |
|
|
|
| AMORTISATION |
|
| At 1 January 2019 | 673 |
| Amortisation for year | 61 |
| At 31 December 2019 | 734 |
|
|
|
| NET BOOK VALUE |
|
| At 31 December 2019 | 31,882 |
The above represents capitalised testing works and concessions costs acquired.
10. PROPERTY, PLANT AND EQUIPMENT
| Group | Plant & |
|
| Machinery |
| COST | €'000 |
| At 1 January 2020 | 31,125 |
| Additions | 3,288 |
| At 31 December 2020 | 34,413 |
|
|
|
| DEPRECIATION |
|
| At 1 January 2020 | 1,022 |
| Charge for year | 238 |
| Impairment | 1,276 |
| At 31 December 2020 | 2,536 |
|
|
|
| NET BOOK VALUE |
|
| At 31 December 20209 | 31,877 |
| Group | Plant & |
|
| Machinery |
| COST | €'000 |
| At 1 January 2019 | 19,355 |
| Additions | 6,537 |
| Reclassification / transfer | 5,233 |
| At 31 December 2019 | 31,125 |
|
|
|
| DEPRECIATION |
|
| At 1 January 2019 | 804 |
| Charge for year | 218 |
| At 31 December 2019 | 1,022 |
|
|
|
| NET BOOK VALUE |
|
| At 31 December 2019 | 30,103 |
Reclassifications
At 31 December 2019, the following non-current assets, which were additions during the construction phase of La Parrilla mine, during 2018 and its completion in 2019, were reclassified from intangible non-current assets to tangible non-current assets to better reflect their physical nature or direct attribution to the construction cost of the new plants:
| Cumulative balance further to reclassification |
| Reclassification | |
|
| 2019 Euro (€) |
| 2018 Euro (€) |
| Civils & earthworks | 2,422,940 |
| 1,159,374 |
| Tailings dam walls | 660,859 |
| 412,635 |
| Transformation centre | 2,566,671 |
| 1,618,238 |
| Project management fees | 1,498,885 |
| 1,200,957 |
| Engineering fees | 849,277 |
| 841,787 |
| Total | 7,998,632 |
| 5,232,990 |
Impairment
Impairment tests were performed on the fair value of each intangible and tangible asset at 31 December 2020, and the Group concludes that the following impairment adjustments are necessary:
| Intangible Assets: |
|
| Tailing Plant Optimisation costs | €2,257,000 |
| Tangible Assets: |
|
| Net book value of the Tailings Plants | €1,276,000 |
| Total Impairment | €3,534,000 |
The Tailings Processing Plants were built between 2014 and 2015. They were operating until 2017 to process the old tailings dumps and produced over 100 tonnes of WO3 concentrate, however these plants never attained optimum capacity, and although they were used during the testing phase of the new Crusher Plant completed in 2019, they are now no longer utilised and are redundant. They may have a future scrap retail value but as this cannot be determined, we have impaired their net book value of €1,276,000 to Nil as at 31 December 2020.
The ramp-up period is defined as the period between plant completion and the attainment of optimum capacity, during which the plants' equipment is subject to testing and adjustment until said optimum capacity is attained. During the period of their operation, operating costs associated with the two plants were incurred and capitalised between 2014 & 2017 totalling €2,257,000 - management considers it appropriate to impair the net book value of these plants. Consistent with this an impairment adjustment of €2,257,000 has been made at 31 December 2020.
The net book value of intangible assets at 31 December, 2020 € 41,156,890, above, includes capitalised exploration & evaluation costs for the Company's three exploration sites in Portugal, with a combined value of € 6,324,233 as follows:
Régua Tungsten Deposit
- A trial mining licence awarded on 20 June 2014 for the Régua tungsten deposit located 400km North of Lisbon and 95km East of Porto in the municipality of the town of Armamar. In October 2015, Golder Associates issued a JORC compliant mineral resource estimate indicating a total resource tonnage of 5.46mt at a grade of 28% a cut off of 0.1% WO3. In February 2020 Golder Associates issued a revised JORC compliant mineral estimate confirming 4.47mt at 0.27% WO3. The total historic cost of this exploration licence at 31 December 2020 was €3,271,712.
- This licence expired on 20 September 2020 and an application for the full mining licence was submitted on 16 June 2020.
Tarouca Tungsten and Tin Project
- A permit for the exploration of the Tarouca tungsten and tin project, located some 70km east of the city of Porto and just 20km from Régua, was granted on 23 March, 2012. Exploration activities completed here have shown extremely high-grade results with heavy mineralisation. Although no Resource Estimate has issued, as further exploration is necessary, it has the potential to enhance and expand the Régua development. The total historic cost of this exploration licence at 31 December 2019 was €939,125.
- This licence expired on 29 March 2019 and an application for its renewal and the inclusion of an additional area of further to the south where the Company believes mineralisation occurs, was submitted on 5 February 2019.
São Martinho and Crato Assumar Arronches gold prospection
- Two combined exploration licences for gold prospection, São Martinho and Crato Assumar Arronches, near the town of Portalegre (Northern Alentejo), around 200 km East of Lisbon. The total historic cost of these two exploration licences at 31 December 2020 was €2,113,397. In June 2016, Golder Associates issued a maiden JORC mineral resource estimate of 3Mt at 1.04 g/t gold, which equates to 111,987oz in contained gold. This maiden JORC compliant mineral resource estimate provides a basis from which the Company will look to upgrade the quality and size of the resource.
- These combined licences expired on 29 September 2018 and an application to convert the São Martinho into a trial mining licence of 5.74km2 and for a new exploration licence of 268.9 km2 which encompasses the São Martinho area, and a large part of the old Crato Assumar Arronches area was submitted on 27 September 2018.
All expenditure commitments under the licences were fulfilled and as they have expired there is currently no unfulfilled commitment to future expenditure. Although they have expired as detailed above, applications for their renewal or conversion into trial mining or full mining licences have been submitted to Portuguese authorities. The granting of all new licences and extensions has, however, been delayed due to changes that have to be made to Portuguese mining law combined with the challenges Portugal endured in 2020 with the COVID-19 crisis and associated state of emergency.
The Company is, however, confident that, given the encouraging exploration results, and given that no other company has applied for these areas, combined with strong support from local authorities, these licences will be granted, which has also been assured verbally by them. As a result, the Company considers that their further successful development is likely to proceed and no impairment adjustment is necessary.
11. INVESTMENTS
| Company | Shares in |
|
| Group |
|
| Undertakings |
| COST | €'000 |
| At 1 January 2020 |
|
| and 31 December 2020 | 6,695 |
|
|
|
| NET BOOK VALUE |
|
| At 31 December 2020 | 6,695 |
|
|
|
| At 31 December 2019 | 6,695 |
| Company | Shares in |
|
| Group |
|
| Undertakings |
| COST | €'000 |
| At 1 January 2019 | 1,695 |
| Additions | 5,000 |
| and 31 December 2019 | 6,695 |
|
|
|
| NET BOOK VALUE |
|
| At 31 December 2019 | 6,695 |
|
|
|
| At 31 December 2018 | 1,695 |
The group or the company's investments at the Statement of Financial Position date in the share capital of companies include the following:
Direct Subsidiaries
Iberian Resources Spain SL
Registered office: Finca La Parrilla, 10132 Almoharin Caceres, Spain
Nature of business: Tungsten mining, production, exploration
|
| % |
|
|
|
|
| Class of shares: | Holding |
|
|
|
|
| Ordinary | 100.00 |
|
|
|
|
|
|
|
| 2020 |
| 2019 |
|
|
|
| €'000 |
| €'000 |
| Aggregate capital and reserves |
|
| (13,490) |
| (6,258) |
Copper Gold Resources Plc (Group)
Registered office: 27/28 Eastcastle Street, London W1W 8DH
Nature of business: Tungsten mining exploration, development
|
| % |
|
|
|
|
| Class of shares: | Holding |
|
|
|
|
| Ordinary | 100.00 |
|
|
|
|
|
|
|
| 2020 |
| 2019 |
|
|
|
| €'000 |
| €'000 |
| Aggregate capital and reserves |
|
| (518) |
| (367) |
Indirect Subsidiaries
Iberian Resources Portugal LDA
Registered office: Lugar das Mozes, 5110-159 Armamar, Portugal
Nature of business: Mineral Exploration
|
| % |
|
|
|
|
| Class of shares: | Holding |
|
|
|
|
| Copper Gold Resources Plc owns | 100.00 |
|
|
|
|
|
|
|
| 2020 |
| 2019 |
|
|
|
| €'000 |
| €'000 |
| Aggregate capital and reserves |
|
| (567) |
| (431) |
During 2019 the company converted €5m of its intercompany loan with Iberian Resources Spain SL, into equity of Iberian Resources Spain SL.
12. INVENTORIES
|
| Group | ||||
|
| 2020 |
| 2019 |
| |
|
| €'000 |
| €'000 |
| |
| Concentrate for re-sale | 621 |
| 415 |
| |
| Spares and Consumables | 553 |
| - |
| |
|
| 1,174 |
| 415 |
| |
13. TRADE AND OTHER RECEIVABLES
|
| Group |
| Company | |||||
|
| 2020 |
| 2019 |
| 2020 |
| 2019 | |
|
| €'000 |
| €'000 |
| €'000 |
| €'000 | |
| Current: |
|
|
|
|
|
|
| |
| Trade receivables | 389 |
| 36 |
| - |
| - | |
| Other receivables | 1,197 |
| 905 |
| 28 |
| 61 | |
| Other prepayments | 1,768 |
| 1,929 |
| 56 |
| 36 | |
| Finance cost prepayments | 1,883 |
| 1,203 |
| 1,526 |
| 1,009 | |
|
|
|
|
|
|
|
|
| |
| >1 year: |
|
|
|
|
|
|
| |
| Amounts owed by group undertakings | - |
| - |
| 73,737 |
| 59,977 | |
| Finance cost prepayments | 2,059 |
| 2,507 |
| 1,673 |
| 2,102 | |
|
| 7,296 |
| 6,580 |
| 77,020 |
| 63,185 | |
14. CASH AND CASH EQUIVALENTS
|
| Group |
| Company | |||||
|
| 2020 |
| 2019 |
| 2020 |
| 2019 | |
|
| €'000 |
| €'000 |
| €'000 |
| €'000 | |
|
|
|
|
|
|
|
|
| |
| Bank accounts | 956 |
| 2,460 |
| 65 |
| 1,670 | |
15. CALLED UP SHARE CAPITAL
| Allotted and issued: |
|
| Nominal |
| 2020 |
| 2019 |
| Number | Class |
| Value |
| €'000 |
| €'000 |
| 7,269,220,952 |
|
|
|
|
|
|
|
| (2019: 6,378,417,640) | Ordinary |
| 0.1p |
| 8,820 |
| 7,822 |
890,713,312 Ordinary Shares of 0.1p were issued during the year as follows:
- On 17 January 2020, 111,615,139 Ordinary Shares of 0.1p each were issued at a premium of 0.21p to repay directors loans totalling €390,000.
- On 10 March 2020, 209,999,998 Ordinary Shares of 0.1p each were issued at a premium of 0.26p raising £756,000 (€900,000).
- On 24 August 2020, 75,187,969 Ordinary Shares of 0.1p each were issued at a premium of 0.03p being the conversion of €100,000 of convertible bonds.
- On 9 October 2020, 397,689,658 Ordinary Shares of 0.1p each were issued at a premium of 0.023p to three creditors in order to settle amounts totalling £489,000 (€538,025).
- On 4 December 2020, 96,300,548 Ordinary Shares of 0.1p each were issued at a premium of 0.0111p being the conversion of €100,000 of convertible bonds and €7,000 of capitalised interest.
On 15 December 2020, the initial expiry date of 471,428,568 Share Warrants was extended from 31 December 2020 to 31 December 2021.
At the year-end there were 1,384,201,147 Share Warrants in issue that were yet to be exercised. (2019: 779,033,998).
16. RESERVES
|
|
|
|
|
| Share |
|
|
|
|
| Group |
|
|
|
| Based |
|
|
|
|
|
| Retained |
| Share |
| Payment |
| Merger |
|
|
|
| Earnings |
| Premium |
| Reserve |
| Reserve |
| Totals |
|
| €'000 |
| €'000 |
| €'000 |
| €'000 |
| €'000 |
|
|
|
|
|
|
|
|
|
|
|
| At 1 January 2020 | (28,027) |
| 36,658 |
| 1,622 |
| 1,014 |
| 11,267 |
| Profit for the year | (3,482) |
| - |
| - |
| - |
| (3,482) |
| Cash share issue | - |
| 896 |
| - |
| - |
| 896 |
| Non cash share issue | - |
| 140 |
| - |
| - |
| 140 |
| Share warrants issued | - |
| - |
| 494 |
| - |
| 494 |
| Transfer between reserves | 115 |
| - |
| (115) |
| - |
| - |
| Share options issued | - |
| - |
| 2 |
| - |
| 2 |
| At 31 December 2020 | (31,394) |
| 37,694 |
| 2,003 |
| 1,014 |
| 9,317 |
|
|
|
|
|
| Share |
|
|
|
|
| Company |
|
|
|
| Based |
|
|
|
|
|
| Retained |
| Share |
| Payment |
| Merger |
|
|
|
| Earnings |
| Premium |
| Reserve |
| Reserve |
| Totals |
|
| €'000 |
| €'000 |
| €'000 |
| €'000 |
| €'000 |
|
|
|
|
|
|
|
|
|
|
|
| At 1 January 2020 | (20,587) |
| 36,658 |
| 1,622 |
| 1,014 |
| 18,707 |
| Profit for the year | 3,902 |
| - |
| - |
| - |
| 3,902 |
| Cash share issue | - |
| 896 |
| - |
| - |
| 896 |
| Non cash share issue | - |
| 140 |
| - |
| - |
| 140 |
| Share warrants issued | - |
| - |
| 494 |
| - |
| 494 |
| Transfer between reserves | 115 |
| - |
| (115) |
| - |
| - |
| Share options issued | - |
| - |
| 2 |
| - |
| 2 |
| At 31 December 2020 | (16,570) |
| 37,694 |
| 2,003 |
| 1,014 |
| 24,141 |
17. TRADE AND OTHER PAYABLES
|
| Group |
| Company | |||||
|
| 2020 |
| 2019 |
| 2020 |
| 2019 | |
|
| €'000 |
| €'000 |
| €'000 |
| €'000 | |
| Current: |
|
|
|
|
|
|
| |
| Trade creditors | 6,265 |
| 3,500 |
| 183 |
| 198 | |
| Amounts owed to group undertakings | - |
| - |
| 56 |
| 75 | |
| Other creditors | 1 |
| 2 |
| 1 |
| 2 | |
| Accrued expenses | 468 |
| 86 |
| 464 |
| 82 | |
| Directors' current accounts | - |
| 390 |
| - |
| 390 | |
|
| 6,734 |
| 3,978 |
| 704 |
| 747 | |
18. FINANCIAL LIABILITIES - BORROWINGS
|
| Group |
| Company | |||||
|
| 2020 |
| 2019 |
| 2020 |
| 2019 | |
|
| €'000 |
| €'000 |
| €'000 |
| €'000 | |
| Current financial liabilities - borrowings: |
|
|
|
|
|
|
| |
| BBVA reverse factoring agreement | 119 |
| 200 |
| - |
| - | |
| BankInter advance on VAT receivables | 500 |
| - |
| - |
| - | |
| Santander loan | 5,000 |
| - |
| - |
| - | |
| Atlas convertible bonds | 334 |
| - |
| 334 |
| - | |
| BBVA overdraft facility | - |
| 300 |
|
|
|
| |
| BBVA advance on VAT receivables | - |
| 50 |
|
|
|
| |
| Caja Rural de Extremadura loan | - |
| 3,000 |
|
|
|
| |
| CaixaBank credit facility | - |
| 500 |
|
|
|
| |
| Hire purchase (note 19) | 11 |
| 11 |
| - |
| - | |
|
|
|
|
|
|
|
|
| |
| Non - Current financial liabilities - borrowings: |
|
|
|
|
|
|
| |
| BlackRock loan facility | 49,781 |
| 44,273 |
| 49,781 |
| 44,273 | |
| BBVA overdraft facility | 296 |
| - |
| - |
| - | |
| Caja Rural de Extremadura loan | 500 |
| - |
| - |
| - | |
| CaixaBank credit facility | 500 |
| - |
| - |
| - | |
| BankInter S.A. Loan | 400 |
| - |
| - |
| - | |
| BBVA loan | 120 |
| - |
| - |
| - | |
| Hire purchase (note 19) | 28 |
| 39 |
| - |
| - | |
|
| 57,589 |
| 48,373 |
| 50,115 |
| 44,273 | |
All non-current financial liabilities are due between 2-5 years. No financial liabilities are due in more than 5 years.
On 14 February 2018, W Resources signed a Credit and Guaranty Agreement with BlackRock Financial Management Inc. ("BlackRock") to provide a US$35 million secured term loan facility to the Company to fund the La Parrilla mine development. The first US$13.125 million was drawn in February 2018 and the balance of US$21.875 million was funded in May 2018.
The key terms of the Credit and Guaranty Agreement with BlackRock Financial Management Inc. are as follows:
- The Loan is for a scheduled term of five years, with a two year non-call period. The Company has the right to repay the Loan after two years for a premium of 5%, after three years for a premium of 3%, and after four years for no premium; the Loan is secured over the value of the Group's intangible and tangible assets in Spain and in Portugal as well as the stream of future revenues expected from off take agreements.
- Subject to any early repayment permitted or required under the Agreement, repayment will be made by way of a cash flow sweep, utilising free cash to repay the loan; it is not expected that cash will be available within the initial two-year period and therefore the full amount of the loan has been recognised as payable between 2-5 years.
- The Loan is subject to an average 5-year interest rate of 12.6%, being 14% in the first year, 13% in the second year and 12% thereafter.
- First year interest is added to the value of the principal, while 50% of the second-year interest is added to the value of the principal and 50% is payable in cash; from the third year onwards interest will be fully payable in cash on quarterly anniversaries of the loan agreement.
- Lenders received a non-refundable upfront fee of 3% of the face value of each of the respective Loan disbursements.
- Lenders received warrants totalling 5% of W Resources Plc fully diluted equity. These have been valued at 5% of the total loan value €1,440,000 (note 21).
On 18 December 2019, BlackRock agreed to increase the existing loan facility provided to W Resources by US$5 million, with no warrants attached.
On 8 October 2020, BlackRock agreed to further increase the existing loan facility provided to W Resources by US$7 million, with no warrants attached. By 31 December 2020 two tranches of this facility, for US$2,750,004 and US$2,250,000, had been drawn down on 4 October 2020 and on 1 December 2020, respectively, for a total of US$5,000,004.
During the year, interest of €6,331,396 (2019: €5,257,259) was incurred on the Loan. This was added to the loan capital during the year and recharged by W Resources Plc to its subsidiary Iberian Resources Spain SL where it was capitalised in Intangible and in Tangible assets in proportion to the expenditure on each of these categories during the year, and in accordance with the Groups accounting policy for loan interest.
The value of the BlackRock loan included in the statement of financial position at the balance sheet date is US$61,093,027 (€49,781,329) (2019: €44,273,000).
On 7 May 2019, a loan of €3,000,000 was granted by Spanish bank, Caja Rural de Extremadura Sociedad Cooperativa de Crédito ("Caja Rural de Extremadura") with a term of 15 months and an interest rate of 1.75% p.a. This loan was repaid on 31 January 2020. The value of this loan included in the statement of financial position at the balance sheet date is NIL (2019: €3,000,000).
On 18 June 2019, an overdraft facility of €300,000 was provided by Banco Bilbao Vizcaya Argentaria, S.A ("BBVA"), with a term of 12 months and an interest rate of 2.65% p.a. A 29% APR will apply if not repaid by 18 June 2020. On 28 May 2020 the BBVA extended the term on this overdraft facility 18 June 2025. The value of this overdraft included in the statement of financial position at the balance sheet date is €296,436 (2019: €299,700).
On 15 October 2019, the Banco Bilbao Vizcaya provided and advance on VAT receivables of €50,000 with a term of 12 months and an Interest rate of 2.3% p.a. This was fully repaid at 31 December 2020.
On 15 October 2019, Iberian Resources Spain S. L. signed a reverse factoring agreement with the BBVA, for up to €200,000 with an interest rate 2.75% p.a. This agreement was automatically renewed for a one year period on its first anniversary. The value of this credit facility included in the statement of financial position at the balance sheet date is €118,980 (2018: €199,833).
On 3 December 2019, Iberian Resources Spain S. L. signed a revolving credit facility of €500,000 with CaixaBank, S.A ("CaixaBank") with a term 6 months and an interest rate of 2.5% p.a. This facility was extended on 28 June 2020 for a 5-year period. The value of this credit facility included in the statement of financial position at the balance sheet date is €500,000 (2019: €500,000).
On 31 January 2020, Iberian Resources Spain S. L. signed a loan agreement for €5,000,000 with Banco Santander, S.A ("Santander") which repaid the €3,000,000 loan from the Caja Rural de Extremadura. The facility interest rate is 3% per annum, payable quarterly, with no amortisation and is secured by a pledge over the rights to the Grant funds. The term of the loan is the earlier of 12 months or the receipt of the proceeds of the Grant funds. On 15 January 2021, the Company finalised a six month extension to this loan facility with an interest rate is 3.5% per annum. Subsequently, on 7 May 2021 the €5.2m Grant was paid by the Junta de Extremadura Government and this loan was repaid in full.
The value of this loan included in the statement of financial position at the balance sheet date is €5,000,000 (2019: NIL).
Under the COVID-19 state of emergency, the Spanish state-owned bank (attached to the Ministry of Economy and Business), the Instituto de Crédito Oficial ("ICO"), provided loan guarantees of up to 80% of loan value to Spanish banks providing loans to Spanish companies. €1.82m of such facilities at annual interest rates of 2-3% pa was secured with four major banks as detailed below. These facilities refinance and extend the maturity of some existing lines, the details of which are listed below and provide a net €1.02m of additional working capital funding. All loan agreements and extensions are to the Company's 100% owned subsidiary, Iberian Resources Spain:
The specific new facilities were:
- On 1 June 2020, Bankinter S.A. granted IRS a loan for €400,000 with a term of 5 years.
- On 28 May 2020, the BBVA granted IRS a loan for €120,000 from with a term of 5 years.
- On 9 July 2020, the Caja Rural de Extremadura granted IRS a loan for €500,000 with a term of 5 years.
The extensions to existing loan facilities are as follows:
- On 28 June 2020, CaixaBank extended the term of the €500,000 revolving credit facility granted to IRS on 3 December 2019, from 30 May 2020 to 4 June 2025, guaranteed by W Resources Plc and also by ICO.
- On 28 May 2020, the BBVA extended the term on IRS' existing €300,000 overdraft facility granted on 18 June 2019, from 18 June 2020 to 18 June 2025 which is now guaranteed as an ICO loan.
In March 2020, W secured a £4.0m convertible bond facility from Atlas Capital Markets ("Atlas") comprising a convertible bond with a coupon of 5% and a term of 3 years. The facility can be drawn in tranches of up to £500,000 at the election of W, with an agreed period between subsequent drawdowns. The facility is unsecured and subordinated to the BlackRock Financial Management Inc. ("BlackRock") loan facility with BlackRock consent required for a draw. Atlas can convert the bond to W shares by issuing a conversion notice with the price set at 95% of the selected 3-day VWAP in the 15 days leading up to issue of a conversion notice by Atlas. At the balance sheet date one tranche of £500,000 had been drawn down and two tranches of £100,000 converted into shares leaving a balance of £300,000 (€334,000) (2019: NIL). Warrants will be issued with each tranche on a pro rata basis, with 5,555,555 Warrants issued at a subscription price of 0.36 pence per Ordinary Share per £100,000 principal amount of Convertible Bonds that are issued. The Warrants have a 3 year expiry term. During the year 27,777,775 warrants were issued. The Black Scholes valuation was immaterial and therefore has not been recognised in the financial statements. (see note 22)
On 15 January 2021, the Company drew down the third and final tranche of US$1,999,996 of the BlackRock incremental loan facility of US$7 million granted on 8 October 2020.
19. HIRE PURCHASE
| Group |
|
|
|
| Hire purchase liabilities | 2020 |
| 2019 |
| Minimum lease payments fall due as follows: | €'000 |
| €'000 |
| Gross obligations repayable: |
|
|
|
| Within one year | 11 |
| 11 |
| Between one and five years | 28 |
| 39 |
|
| 39 |
| 50 |
|
|
|
|
|
|
|
|
|
|
| Finance charges repayable: | - |
| - |
|
|
|
|
|
| Net obligations repayable: | 11 |
| 11 |
| Within one year | 28 |
| 39 |
| Between one and five years | 39 |
| 50 |
20. RELATED PARTY DISCLOSURES
During the year the Directors acquired the following Ordinary 0.1p Shares:
| Michael Masterman |
| 65,146,580 |
|
| David Garland |
| - |
|
| Byron Pirola (resigned 30 March 2020) |
| 32,573,290 |
|
| Pablo Neira |
| - |
|
| James Argalas |
| 13,895,269 |
|
| Oscar Marin Garcia (appointed 8 January 2020 / resigned 12 February 2021) |
| - |
|
Between the year end and the date of signing of this report the Directors have acquired the following Ordinary 0.1p Shares:
| Michael Masterman |
| 150,000,000 | (Purchased on market) |
| David Garland |
| - |
|
| Pablo Neira |
| 40,074,602 |
|
| James Argalas |
| - |
|
On 2 December 2016, Share Options were granted to the directors as follows:
| Director | Number of Options | Exercise Price | Expiry Date |
| Michael Masterman | 20,000,000 | £0.007 | 31/12/2020 |
|
| 10,000,000 | £0.008 | 31/12/2020 |
|
| 10,000,000 | £0.01 | 31/12/2020 |
|
|
|
|
|
| Byron Pirola | 20,000,000 | £0.007 | 31/12/2020 |
|
| 10,000,000 | £0.008 | 31/12/2020 |
|
| 10,000,000 | £0.01 | 31/12/2020 |
|
|
|
|
|
| David Garland | 20,000,000 | £0.007 | 31/12/2020 |
|
| 10,000,000 | £0.008 | 31/12/2020 |
|
| 10,000,000 | £0.01 | 31/12/2020 |
These expired on 31 December 2020 and none were exercised.
Further on 20 November 2018, Share Options were granted to directors as follows:
| Director | Number of Options | Exercise Price | Expiry Date |
| Pablo Neira | 30,000,000 | £0.0055 | 30/11/2021 |
|
|
|
|
|
| James Argalas | 30,000,000 | £0.0055 | 30/11/2021 |
These remained unexercised at the balance sheet date.
Further on 15 November 2019, Share Options were granted to a related party of a Director as follows:
| Director | Number of Options | Exercise Price | Expiry Date |
| Related party of Oscar Garcia (appointed 08 January 2020 / resigned 12 February 2021) | 21,900,000 | £0.0040 | 30/11/2020 |
These options expired on 30 November 2020 and none were exercised.
During 2019, the Directors made loans to the company as follows:
| Michael Masterman | €229,000 |
| Byron Pirola | €111,000 |
| James Argalas | €50,000 |
| Total | €390,000 |
These loans were converted into Share Capital on 17 January 2020.
Included in other creditors is the sum of €414,000 (2019: €358,000) for unpaid consultancy fees due to FeX Limited a company, based in Hong Kong, wholly-owned by Michael Masterman a Director and significant shareholder. During 2020 consultancy fees of €179,000 were charged to the Group by FeX Limited.
Included in trade creditors is the sum of €42,000 (2019: Nil) for unpaid consultancy fees due to Michael Masterman a Director and significant shareholder. During the year consultancy fees of €42,000 were charged to the Company by Michael Masterman.
Also included in other creditors is the sum of €120,000 (2019: €43,000) for accrued directors fees due to the Directors as follows: €69,000 Pablo Neira, €3,300 (£3,000) David Garland, €24,000 James Argalas, €24,000 Oscar Marin Garcia.
21. EVENTS AFTER THE REPORTING PERIOD
On 11 January 2021, the Group drew down a further £500,000 tranche from the £4.0 million Atlas Capital Markets ("Atlas") convertible bond facility. This is the second draw down made from the facility which was secured on 30 March 2020. This convertible bond tranche has a 5% coupon and 3-year term. As part of the agreement, Atlas can convert the bond to W shares by issuing a conversion notice with the price set at 95% of the selected 3-day VWAP in the 15 days leading up to the issue of a conversion notice by Atlas.
On 11 January 2021, the Company converted £100,000 of Atlas Convertible Bonds into 96,525,097 ordinary shares of 0.1p per share ("Ordinary Shares") at a price of 0.1036p per Ordinary Share.
On 15 January 2021, the Company finalised a six month extension to the €5m loan facility with the Spanish bank, Santander. As the initial term of the loan was the earlier of 18 February 2021 or the receipt of the proceeds of the Grant funds. The facility interest rate is 3.5% per annum, payable quarterly, with no amortisation and is secured by a pledge over the rights to the Grant funds.
On 26 January 2021, the Company issued 247,290,458 ordinary shares of 0.1p per share ("Ordinary Shares") at a price of 0.1113p per Ordinary Share. £44,603 (€50,000) forms part of Director, Pablo Neira's 2020 remuneration package while £230,631 was issued to technical and professional creditors.
On 28 January 2021, the Company converted £100,000 of Atlas Convertible Bonds into 96,899,224 ordinary shares of 0.1p per share ("Ordinary Shares") at a price of 0.1032p per Ordinary Share.
On 12 February 2021, Oscar Marin Garcia stepped down from the Board to focus on increased commitments in his business.
On 8 March 2021, the Group announced a proposed reorganisation of the Company's share capital. The proposed Capital Reorganisation consisted of the following steps:
- the amendment of the Company's Articles of Association to set out the rights and restrictions attaching to a new class of Deferred Shares;
- each Existing Ordinary Share of £0.001 nominal value each will be subdivided into two new shares, a Redenominated Ordinary Share and a Deferred Share;
- the nominal value of each new Redenominated Ordinary Share will be one per cent. of an Existing Ordinary Share, being £0.00001;
- the nominal value of each new Deferred Share will be ninety-nine per cent. of an Existing Ordinary Share, being £0.00099; and
- every 100 Redenominated Ordinary Shares will then be consolidated into one New Ordinary Share with a nominal value of £0.001 (being 100 * £0.00001).
This reorganisation was approved at a General meeting held on 31 March 2021.
On 22 March 2021, the Company converted £100,000 of Atlas Convertible Bonds into 100,000,000 ordinary shares of 0.1p per share ("Ordinary Shares") at a price of 0.1000p per Ordinary Share. The Company will pay £20,200 to Atlas as compensation for Atlas being unable to convert at price lower than the nominal value of an Ordinary Share.
On 8 April 2021, the Company converted £250,000 of Atlas Convertible Bonds into 2,724,469 ordinary shares of 0.1p per share ("Ordinary Shares") at a price of 9.1761p per Ordinary Share.
On 7 May 2021, Iberian Resources Spain received the €5.2m Grant from the Junta de Extremadura Government in Spain, which was initially awarded in March 2018. In February 2020, W received a €5m loan from the Spanish bank, Santander in order to monetise the Grant and this has now been repaid in full.
On 17 May 2021, the Company completed a placement of 28,278,610 ordinary shares of 0.1p per share at 8p per Ordinary Share to raise £2.26 million. Under the Placing, subscribers were offered warrants to subscribe for new ordinary shares in conjunction with the Placing Shares on the basis of 1 Warrant for every 2 Ordinary Shares subscribed for. The Warrants are exercisable at any time in the two years following admission of the Placing Shares to trading on AIM at an exercise price of 12p per share.
22. SHARE WARRANTS / SHARE BASED PAYMENTS
| 2020 | Number issued |
Weighted average exercise price | Outstanding at 31 December 2020 | Expiry Date | 2020 €'000 |
| Share Options |
|
|
|
|
|
| 2 December 2016 | 120,000,000 |
| - | 31/12/2020 | - |
| 20 November 2018 | 150,000,000 |
| 90,000,000 | 30/11/2021 | 69 |
| 15 November 2019 | 43,800,000 |
| - | 30/11/2020 | - |
|
|
| £0.0055 | 90,000,000 |
| 69 |
|
|
|
|
|
|
|
| Share Warrants |
|
|
|
|
|
|
|
|
|
|
|
|
| 14 May 2018 | 307,605,430 |
| 307,605,430 | 14/05/2023 | 1,440 |
| 18 April 2019 | 400,000,000 |
| 400,000,000 | 31/12/2021 | - |
| 22 May 2019 | 71,428,568 |
| 71,428,568 | 31/12/2021 | - |
| 4 August 2020 | 27,777,775 |
| 27,777,775 | 04/08/2023 | - |
| 27 October 2020 | 96,000,000 |
| 96,000,000 | 27/10/2025 | 17 |
| 3 November 2020 | 481,389,374 |
| 481,389,374 | 03/11/2025 | 477 |
|
|
| £0.0029 | 1,384,201,147 |
| 1,934 |
| 2019 | Number issued |
Weighted average exercise price | Outstanding at 31 December 2019 | Expiry Date | 2019 €'000 |
| Share Options |
|
|
|
|
|
| 2 December 2016 | 120,000,000 |
| 120,000,000 | 31/12/2020 | 67 |
| 20 November 2018 | 150,000,000 |
| 150,000,000 | 30/11/2021 | 115 |
| 15 November 2019 | 43,800,000 |
| 43,800,000 | 30/11/2020 | - |
|
|
| £0.0062 | 313,800,000 |
| 182 |
|
|
|
|
|
|
|
| Share Warrants |
|
|
|
|
|
|
|
|
|
|
|
|
| 14 May 2018 | 307,605,430 |
| 307,605,430 | 14/05/2023 | 1,440 |
| 18 April 2019 | 400,000,000 |
| 400,000,000 | 31/12/2021 | - |
| 22 May 2019 | 71,428,568 |
| 71,428,568 | 31/12/2021 | - |
|
|
| £0.0040 | 779,033,998 |
| 1,440 |
On 2 December 2016, Share Options were granted to the directors as follows:
| Director | Number of Options | Exercise Price | Expiry Date |
| Michael Masterman | 20,000,000 | £0.007 | 31/12/2020 |
|
| 10,000,000 | £0.008 | 31/12/2020 |
|
| 10,000,000 | £0.01 | 31/12/2020 |
|
|
|
|
|
| Byron Pirola | 20,000,000 | £0.007 | 31/12/2020 |
|
| 10,000,000 | £0.008 | 31/12/2020 |
|
| 10,000,000 | £0.01 | 31/12/2020 |
|
|
|
|
|
| David Garland | 20,000,000 | £0.007 | 31/12/2020 |
|
| 10,000,000 | £0.008 | 31/12/2020 |
|
| 10,000,000 | £0.01 | 31/12/2020 |
The share options issued during 2016 have been valued at fair value at 31 December 2016 using the Black Scholes method and £60,000 (€67,000) has been recognised in administrative expenses in 2016 and a share based payments reserve of £60,000 (€67,000) created and included in the Statement of Other Comprehensive Income. The inputs used in calculating this include: 29.33% Volatility, 5% Risk-free interest rate, 0% Dividend Yield, 0.4770p Share price at the grant date.
These options expired on the 31 December 2020, none were exercised and therefore a transfer of €67,000 has been made from the share based payment reserve into retained earnings.
Further on 20 November 2018, Share Options were granted to Directors and Key Management Personnel as follows:
| Director | Number of Options | Exercise Price | Expiry Date |
|
| Pablo Neira | 30,000,000 | £0.0055 | 30/11/2021 |
|
| James Argalas | 30,000,000 | £0.0055 | 30/11/2021 |
|
| Key Management Personnel | 90,000,000 | £0.0055 | 30/11/2021 |
|
The share options issued during 2018 have been valued at fair value at 30 November 2018 using the Black Scholes method and £103,000 (€115,000) has been recognised in administrative expenses in 2018, included in the share based payments reserve and included in the Statement of Other Comprehensive Income. The inputs used in calculating this include: 20.79% Volatility, 3% Risk-free interest rate, 0% Dividend Yield, 0.5260p Share price at the grant date.
Two members of Key Management Personnel holding 60,000,000 Options left during 2020 and as such their options expired. Therefore a transfer of €46,000 has been made from the share based payment reserve into retained earnings.
Further on 15 November 2019, Share Options were granted to a related party of a Director as follows:
| Director | Number of Options | Exercise Price | Expiry Date |
| Related party of Oscar Garcia (appointed 08 January 2020 / resigned 12 February 2021) | 21,900,000 | £0.0040 | 30/11/2020 |
The share options issued during 2019 have been valued at fair value at 15 November 2019 using the Black Scholes method and £1,400 (€2,000) has been recognised in administrative expenses in 2020, at the date Oscar Marin Garcia was appointed a Director, included in the share based payments reserve and included in the Statement of Other Comprehensive Income. The inputs used in calculating this include: 15.16% Volatility, 2.9% Risk-free interest rate, 0% Dividend Yield, 0.3450p Share price at the grant date.
These options expired on 30 November 2020, none were exercised and therefore a transfer of €2,000 has been made from the share based payment reserve into retained earnings.
No options have been exercised and the reserve balance is €69,000 (2019: €182,000) at 31 December 2020.
On 14 May 2018, 307,605,430 Share Warrants were issued to BlackRock as part of the consideration for the loan. These had an exercise price of 0.1p per share and expire on 14 May 2023.
These have been valued at 5% of the total loan value, $1,750,000 at an exchange rate of 1.355 on 14 May 2018 equalling £1,292,000 (€1,440,000) which were included within the value of the total loan costs that have been prepaid in 2018 and will be expensed across the term of the loan, currently 2 years remain.
On 4 August 2020, 27,777,775 Share Warrants were issued to Atlas Special Opportunities LLC as part of the consideration for the initial draw down of the convertible bond facility. The warrants have a 3 year expiry.
These have been valued at fair value at 4 August 2020 using the Black Scholes method and £1,000 (€2,000) this is considered to be immaterial and no adjustment has been made to the income statement. The inputs used in calculating this include: 33.12% Volatility, 5% Risk-free interest rate, 0% Dividend Yield, 0.15p Share price at the grant date.
On 27 October 2020, 96,000,000 Share Warrants were issued to BlackRock as part of the consideration for amending the agreement to allow the capitalisation (payment in kind) of interest due on 15 May 2020. The warrants have a 5 year expiry.
These have been valued at fair value at 27 October 2020 using the Black Scholes method and £15,000 (€17,000) has been recognised in administrative expenses in 2020, included in the share based payments reserve and included in the Statement of Other Comprehensive Income. The inputs used in calculating this include: 42.08% Volatility, 5% Risk-free interest rate, 0% Dividend Yield, 0.13p Share price at the grant date.
On 3 November 2020, 171,101,564 Share Warrants were issued to BlackRock as consideration for £150,000 (€166,000) the amendment fee to allow the capitalisation (payment in kind) of interest due on 15 August 2020. Further on 3 November 2020, 310,287,810 Share Warrants were issued to BlackRock as consideration for £280,000 (€311,000) the second incremental amendment fee. The warrants have a 5 year expiry.
These have been valued at £430,000 (€477,000) the total of the liability covered by the issue of the warrants. Which has been included within the value of the total loan costs that have been prepaid in 2020 and will be expensed across the term of the loan, currently 2 years remain.
23. FINANCIAL INSTRUMENTS
Financial risk management
Overview
The Group has exposure to the following risks arising from financial instruments:
· Market
· Interest rate
· Foreign currency
· Credit
· Liquidity
This note presents information about the Group's exposure to each of these risks, the group's objectives, policies and processes for measuring and managing risk.
The Board of Directors determine, as required, the degree to which it is appropriate to use financial instruments to mitigate risk. Currently the Company's principal financial instruments comprise cash, borrowings and equity capital. The Company does not enter into complex derivatives to manage risk.
There is no material difference between the book value and fair value of the Group cash balances, trade and other receivables, trade and other payables or borrowings.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposure within acceptable parameters, while optimising the return.
Due to the nature of the Group's operations, it will be mainly exposed to fluctuations in the price of tungsten, changes in foreign exchange rates and interest rates.
Interest rate risk
Interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in interest rates. Management ensure fixed interest rates with good terms are agreed with all finance providers to mitigate this risk. The risk of significant fluctuation is therefore considered to be immaterial.
Foreign currency risk
The Group operates internationally and is exposed to foreign currency risk arising on cash and cash equivalents and receivables denominated in a currency other than the respective functional currencies of group entities. Primarily these transactions are denominated in GBP and US dollars.
The Group also has significant loans outstanding in US dollars. This exposes the group to currency risk as repayments of the loan are to be made in s currency different to the functional currency the Group is operating.
The following balances held in foreign currency at the reporting date are:
| Net foreign currency financial (liabilities) / assets | Group | Company | ||
| 2020 €'000 | 2019 €'000 | 2020 €'000 | 2019 €'000 | |
| GBP assets | 62 | 114 | 62 | 114 |
| USD assets | 3 | 1,567 | 3 | 1,567 |
| GBP liabilities | (688) | (381) | (434) | (130) |
| USD liabilities | (49,798) | (44,273) | (49,798) | (44,273) |
| AUD liabilities | (3) | (17) | (3) | (4) |
| Total net exposure | (50,424) | (42,990) | (50,170) | (42,726) |
Sensitivity analysis
A 10 percent strengthening of the euro against the respective currencies at 31 December 2020 would have increased / (decreased) equity and profit and loss by the amounts shown below:
|
| Profit and Loss | Equity | ||
| Group | 2020 €'000 | 2019 €'000 | 2020 €'000 | 2019 €'000 |
| GBP | 63 | 27 | 63 | 27 |
| USD | 4,980 | 4,271 | 4,980 | 4,271 |
| AUD | - | 2 | - | 2 |
| Total net exposure | 5,043 | 4,300 | 5,043 | 4,300 |
|
|
|
| ||
|
| Profit and Loss | Equity | ||
| Company | 2020 €'000 | 2019 €'000 | 2020 €'000 | 2019 €'000 |
| GBP | 37 | 2 | 37 | 2 |
| USD | 4,980 | 4,271 | 4,980 | 4,271 |
| AUD | - | - | - | - |
| Total net exposure | 5,017 | 4,273 | 5,017 | 4,273 |
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counter party to a financial instrument fails to meet its contractual obligations.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was as follows:
| Group | Carrying Amount | |
|
| 2020 | 2019 |
|
| €'000 | €'000 |
| Trade and other receivables | 1,586 | 941 |
| Cash and cash equivalents | 956 | 2,461 |
|
| 2,542 | 3,402 |
| Company |
|
|
|
|
|
|
| Trade and other receivables | 28 | 61 |
| Cash and cash equivalents | 65 | 1,671 |
|
| 93 | 1,732 |
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group's approach to managing liquidity is to ensure, as far as possible that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.
The following are contractual maturities of financial liabilities at the balance sheet date:
| Group - 31 December 2020 | Carrying amount | Two months or less | Two - Twelve months | More than one year |
|
| €'000 | €'000 | €'000 | €'000 |
| Trade and other payables | 6,266 | 6,266 | - | - |
| Borrowings | 57,589 | 5,002 | 962 | 51,625 |
|
| 63,855 | 11,268 | 962 | 51,625 |
| Group - 31 December 2019 |
|
|
|
|
|
|
|
|
|
|
| Trade and other payables | 3,502 | 3,502 | - | - |
| Borrowings | 48,373 | 2 | 4,059 | 44,312 |
|
| 51,875 | 3,502 | 4,059 | 44,312 |
|
|
|
|
|
|
| Company - 31 December 2020 | Carrying amount | Two months or less | Two - Twelve months | More than one year |
|
| €'000 | €'000 | €'000 | €'000 |
| Trade and other payables | 184 | 184 | - | - |
| Borrowings | 50.115 | - | 334 | 49,781 |
|
| 50,299 | 184 | 334 | 49,781 |
| Company - 31 December 2019 |
|
|
|
|
|
|
|
|
|
|
| Trade and other payables | 200 | 200 | - | - |
| Borrowings | 44,273 | -- | - | 44,273 |
|
| 44,473 | 200 | - | 44,273 |
APPENDIX 1 - JORC COMPLIANT MINERAL RESOURCE ESTIMATES
La Parrilla Proven and Probable Mineral Reserves - JORC 2012
|
| Tonnes '000 | Grade WO3 (ppm) | Metal Content |
| Grade |
| Metal Content |
| |
|
| WO3 (t) | Sn (ppm) | Sn (t) | ||||||
| Proven |
| 1,177 | 995 | 1,171 | 251 | 295 | |||
| Probable |
| 28,577 | 928 | 26,511 | 111 | 3,156 | |||
| Total |
| 29,754 | 931 | 27,683 | 116 | 3,451 | |||
Note: The La Parrilla mine reserves are set out in the following table based on the optimal LOM Pit. Estimate for La Parrilla Deposit using a 330 ppm WO3 Cut-Off Grade and 5% dilution. All tonnes quoted are dry tonnes. Differences in the addition of tonnes to the total displayed is due to rounding.
The La Parrilla JORC-compliant mineral reserves update was fully disclosed, with JORC Table 1 in a Company news release on 14 June 2017. Mr Adén Muñoz of AYMA Mining Solutions SL, a Spanish Mining Engineering company based in Seville was the Competent Person responsible for the La Parrilla Proven and Probable Mineral Reserves. The mineral reserves are based on indicated and measured resources prepared by Golder Associated in March 2017 (RNS, 11 May 2017).
Mineral Resources for La Parrilla Deposit Using a 400 ppm WO3 Cut-Off Grade within Mineralised Domains - JORC 2012
| Classification |
| Tonnage (Mt) | WO3 (ppm) | Sn (ppm) |
| Measured |
| 1 | 1,115 | 278 |
| Indicated |
| 35 | 1,004 | 110 |
| Inferred |
| 13 | 974 | 97 |
|
| 49 | 998 | 110 | |
The La Parrilla JORC-compliant mineral resource update was fully disclosed, with JORC Table 1 in a Company news release on 11 May 2017. Mr Andrew Weeks (Golder Associates Pty Ltd) was the Competent Person responsible for the Mineral Resource Estimate for the La Parrilla deposit.
Régua JORC Compliant Mineral Resource Estimate reported at a 0.1% WO3 cut-off grade
| Category |
| Tonnes | WO3% | WO3 metal (ky) |
| Indicated |
| 3.74mt | 0.28 | 10.6 |
| Inferred |
| 0.72mt | 0.21 | 1.5 |
| Total |
| 4.47mt | 0.27 | 12.1 |
The Régua JORC compliant mineral resource update was fully disclosed, with JORC Table 1 in a Company news release on 5 February 2020. Mr Andrew Weeks (Golder Associates Pty Ltd) was the Competent Person responsible for the Mineral Resource Estimate for the Régua deposit.
São Martinho Maiden JORC Compliant Mineral Resource Estimate
| Category |
| Tonnes | Au (g/t) | Au Content (Oz) | Cut-off |
| Indicated |
| 0.48 mt | 1.03 | 17,363 | 0.5 g/t Au |
| Inferred |
| 2.56 mt | 1.05 | 94,624 | 0.5 g/t Au |
| Total |
| 3.04 mt | 1.04 | 111,987 | 0.5 g/t Au |
The São Martinho maiden JORC-compliant mineral resource update was fully disclosed, with JORC Table 1 in a W Resources Plc RNS announcement on 8 June 2016. Mr Jorge Peres (Golder Associates Pty Ltd) was the Competent Person responsible for the Mineral Resource Estimate for the São Martinho deposit.
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