W Resources : 2020 Consolidated Financial Statements

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 FOR

W RESOURCES PLC

W RESOURCES PLC

CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

	Page
Company Information	1
Chairman's Statement	2
Corporate Governance Statement	7
Group Strategic Report	11
Report of the Directors	15
Report of the Independent Auditors	22
Consolidated Statement of Profit or Loss and Other
Comprehensive Income	27
Consolidated Statement of Financial Position	28
Company Statement of Financial Position	29
Consolidated Statement of Changes in Equity	30
Company Statement of Changes in Equity	31
Consolidated Statement of Cash Flows	32
Company Statement of Cash Flows	33
Notes to the Statements of Cash Flows	34
Notes to the Consolidated and Parent Company	36
Financial Statements

W RESOURCES PLC

COMPANY INFORMATION

FOR THE YEAR ENDED 31 DECEMBER 2020

DIRECTORS:	Mr Michael George Masterman
	Mr Pablo Neira
	Mr David Garland
	Mr James Argalas
	Mr Oscar Marin Garcia - appointed 8 January 2020 /
	resigned 12 February 2021
SECRETARY:	Cargil Management Services Limited
REGISTERED OFFICE:	27/28 Eastcastle Street
	London, W1W 8DH
	United Kingdom
REGISTERED NUMBER:	04782584 (England and Wales)
INDEPENDENT AUDITORS:	PKF Littlejohn LLP
	15 Westferry Circus
	London, E14 4HD
	United Kingdom
BANKERS:	Barclays
	Level 27
	1 Churchill Place
	London, E14 5HP
	United Kingdom
SOLICITORS:	Mildwaters Consulting LLP,
	Walton House, 25 Bilton Road,
	Rugby, Warwickshire, CV22 7AG,
	United Kingdom
	Bufete Perez Cordero y Perez Morales
	S.L.P, Calle Almagro 11, 1-4,
	28010 Madrid
	Spain

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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.

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W RESOURCES PLC

CHAIRMAN'S STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2020

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.

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