W Resources (AIM:WRES ) is “extremely encouraged” by the September performance at its La Parrilla mine in Spain after the plant improved substantially during 3Q20.
The tungsten, tin and gold mining company told investors that it had identified a number of plant improvements, which were successfully addressed to increase plant efficiencies.
The works proved ‘effective with a notable improvement in recoveries’ with record tungsten concentrate production last month of 2,163 metric tonne unit (mtu) and a significant increase in grade from 805 parts per million (ppm) in August to 1,059ppm in September.
In 3Q20, La Parilla produced a total of 171,454 tonnes of run-of-mine ore feed to the plant, down 13% in like-for-like terms basis but demonstrating a pro rate improvement of 58%.
Total tungsten and tin concentrate production was 77.6 tonnes during Q3, down 13% on a like for like basis and up 104% on a pro rata basis while tin concentrate totalled 22.9 dry metric tonnes which the group said is up 30% pro-rata and down 44% on a like-for-like basis.
W also recorded the highest tungsten metal production and recovery achieved to date with concentrate amounting to 54.7 tonnes in 3Q20, up 168% pro-rata and up 15% like-for-like.
Combined shipments of tungsten concentrate and tin concentrate of 100.2 tonnes in Q3 took total shipments to offtake partners to 230 tonnes concentrate for the first nine months of 2020.
Furthermore, to implement the requisite programme of improvements, production during the period was negatively impacted as the working week was truncated from seven to three days to carry out the works, suggesting 4Q20 could be even better.
Shares in W Resources have been trading within a tight range of 0.11p and 0.13p over the past two weeks to open 10.20% higher this morning at 0.133p following the announcement.
W said improvements in production as well as the stability achieved at the plant which ‘improved substantially in September 2020 has allowed the Company to pay dividends.
"Noting the plant improvements achieved in Q3, we are extremely encouraged by the September performance, which is a strong indicator for plant performance and production in Q4.” said Michael Masterman, Chairman of W Resources.
He added, “The works are proving successful, production is increasing and the superior quality of tungsten has been commended by one of our largest customers.”
W said its relationship with BlackRock Financial Management ‘remains strong, evidenced by the recent $7m increase in the loan facility which will be utilised to implement a comprehensive production programme to boost production at the La Parrilla site.
"With the improvements achieved in the quarter and the great support BlackRock continues to provide, the Company, following the recently increased debt facility, we remain focused on increasing production month on month, in order to start 2021 in a stronger position as we work towards achieving our T2 target production,” Masterman added.
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