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Low Cost Tungsten & Tin ProducerBuilding one of the world’s largest tungsten mines
AIM : WRES June 2019
Disclaimer
This presentation was prepared by and is the property of W Resources Plc (“W Resources” or “the Company”). No reproduction or distribution this material is permittedto companies or individuals outside of those for whom this is intended. No agents, brokers or investment banks are authorised to present this material to other partiesfor the purpose of soliciting potential clients or transactions of any kind without prior consent to do so.
While the Company is not aware of any inaccuracies, no warranty or representation is made by the Company or their respective employees and representatives as tothe completeness or accuracy of the information contained herein. The Company, JLSI and their respective employees and representatives expressly disclaim anyliability for damages, direct or consequential, arising out of or related to this presentation or omissions there from, or any other information provided in writing, orally orotherwise regarding this potential transaction. Any party considering a transaction with the Company agrees to look solely to its own due diligence and anyrepresentations, warranties and/or covenants set forth in a fully-executed, definitive written agreement with the Company relative to the transaction.
Certain matters discussed in this presentation are “forward-looking statements”. These forward-looking statements can often but not always be identified because thecontext of the statement will include words such as “the Company expects,” “anticipates” or words of similar import. Similarly, statements that describe the Company’scapabilities, future plans, objectives or goals are also forward-looking statements. Such forward looking statements are subject to significant risks and uncertainties,including the financial performance of the Company and the viability of its technology. These risks could cause actual results to differ materially from those currentlyanticipated.
Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give noassurance that its expectations will be attained. Potential investors, customers, suppliers and other readers are urged to consider this factor carefully in evaluating anyforward-looking statements. Forward-looking statements made herein are only made as of the date of this presentation and the Company undertakes no obligation toupdate such forward looking statements to reflect subsequent events or circumstances.
Technical information in this presentation has been prepared and approved for inclusion by Mr Fernando de la Fuente, who is a “qualified person” in respect of the AIMRules for Companies with over 44 years experience in the Exploration and Mining Geology industry. Mr de la Fuente holds a B.Sc. in Geology and a MSc in Geologyfrom the University of Granada in Spain. He is also a member of the Spanish College of Geologists (Number 49), the Spanish Society of Mineralogy, founder memberof the Spanish Society of Geology, member of the Spanish Association of Applied Geology to Mineral Deposits, member of the Society for Mining, Metallurgy andExploration, Inc., member of PDAC.
The press releases relating to the initial announcements of the technical disclosures in this presentation can be found on the Company website(www.wresources.com). The relevant announcement dates are La Parrilla (25 August 2017, with full FID report on website), Régua (27 October 2015) and SãoMartinho (8 June 2016).The company confirms that it is not aware of any new information or data that materially affects the information included in the original marketannouncement and, in the case of estimates of Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning theestimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and context in which theCompetent Person’s findings are presented have not been materially modified from the original market announcement.
2
Overview
La Parrilla
Régua
Tarouca
São Martinho
SPAIN
PORTUGAL
Madrid
Lisbon
Porto
Seville
Tarouca, Portugal: Former
tungsten / tin mine advanced
exploration progressing
La Parrilla Mine, Spain:
Open-pit tungsten mine
development – 2,700 tpa
(“T2”) expanding to >4,000
tpa (“T3.5”)
JORC Resource of 49mt @
0.100% WO3
JORC Reserves of 29.8mt
total
• Proven 1.2mt @
0.0995% WO3
• Probable 28.6mt @
0.0928% WO3
• Total 29.8mt @
0.0931% WO3
Régua, Portugal: Underground
tungsten mine development -
1,300 tpa
JORC Resource of 5.46mt @
0.28% WO3
São Martinho, Portugal:
Trial Mine Application
111,987oz contained gold;
significant upside
Michael Masterman - Chairman
Founding Shareholder & GM - Fortescue Metals Group
8 Years - McKinsey & Company
CEO - Po Valley Energy and CFO - Anaconda Nickel
Fernando de la Fuente - Country Manager Spain
Anglo American Corporation
Rio Algom (Rio Tinto)
Phelps Dodge
Aaron Szumilak - Metallurgist & Process Engineer
Fortescue Metals Group
Syncrude
Composites Innovation Centre
Juan Garcia Valledor - La Parrilla Operations Manager
Rio Tinto
Imerys Groups
W Resources Management Team +130 years of experience
Focus:Tungsten & tin - production, development &
exploration in Spain & Portugal
Major
Projects:
Tungsten - La Parrilla, Régua, Tarouca
Copper Gold - São Martinho
3
La Parrilla – Key parameters
Low Cost
US$94/mtuLarge Scale
49mt+Long Life
11+ years
Simple Low
Cost processing
First Ore
Q1 2019European / USA
Offtake > 80%
4
La Parrilla - Near Completion / In Production
5
• La Parrilla is tracking below budget, complete in Q2
• Production has commenced and will expand to 200 tonnes per month (net US$3m p.m)
• La Parrilla expansion creates the foundation for substantial EBITDA and value growth
• Full support from local authorities with a €5.3m grant
• BlackRock US$35 million financing
Building a world class tungsten company
6
ROM Tungsten Capital EBITDA* Timing
La Parrilla T2 2.0 Mtpa 2,700 tpa €27.8m US$20.0m Q2 2019
+ €20.0m US$20.0m
= La Parrilla T3.5 3.5 Mtpa 4,000 tpa €47.8m US$40.0m 2021
Régua 0.1 Mtpa 1,000 tpa €6.0m US$ TBA Q1 2020
* FID Study 3 Year Average published 25 August 2017
Tungsten – World’s hardest metal with highest melting point
Source: ITIA – Tungsten End Use Analysis 20177
Primarily used to make
tungsten carbide for
cutting tools such as drill
bits and machining tools
One of the hardest man
made materials when
mixed with carbon to form
cemented tungsten
carbide
Auto industry is a heavy
tungsten user - tyre studs,
ball joints, brakes, crank
shafts & other parts that
see hard usage
Highest melting point,
lowest vapour pressure of
any naturally occurring
metal
High demand, tight supply
(1) Source: International Tungsten Industry Association (2) Source: Roskill
China consumed 60%of world production in
2016, up from 30% in
1996 (2)
Current global tungsten
demand is
approximately
80,000tpa (1)
Supply shortages are
expected resulting in
upwards trending
price 2022 & beyond
Demand for tungsten
has grown 4% per
year for the past 10
years
8
Historical pricing
Source: Metal Bulletin
European Tungsten APT Price LME Tin Price
9
Dec16 to May19
US$ per mtu
Aug16 to May19
US$ per tonne
180
200
220
240
260
280
300
320
340
360
17,500
18,000
18,500
19,000
19,500
20,000
20,500
21,000
21,500
22,000
22,500
Low operating & capital costs
0
50
100
150
200
250
300
350
% of total output
China Molybdenum China by-product La Parrilla Nui Phao†
China China Drakelands Los Santos
Minmetals Jiangxi Tungsten Ind Group Mittersill Chongyi Zhangyuan
Xiamen Tungsten Panasquiera China China
China
2018 Average WO3 Concentrate Price ($325 / mtu) (1)
Source: Argus
Global Tungsten Production Cost CurveCapital Costs - US$m
85 94
117
155
Núi Pháo La Parrilla Barruecopardo Drakelands
Unit Operating Costs - US$ / mtu
Low Cost Drivers
• Excellent location
• Open-pit mine – limited pre-strip
• Low cost gravity separation circuit
• “Fit for purpose” plant
• Scaled and sensible staging
• Primary infrastructure already in place
Power connection
7km to main highway
Quality water supply
(1) Assuming a 20% discount to the 2018 average European APT tungsten price of US$325 / mtu (Source: Metal Bulletin)
La Parrilla
10
SPAIN SPAIN UK VIETNAM
VIETNAM SPAIN SPAIN UK
47 54
250
450
La Parrilla Barruecopardo Drakelands Núi Pháo
La Parrilla - Strategically located
• 7km from Seville / Madrid highway
• Access to quality water supply
• Established infrastructure
• Facilities and on-site laboratory operational
• Connected to the Spanish power grid
• Short trucking distance from Atlantic & Mediterranean ports
Process Plant Infrastructure
Initial Mining Area
Operational Tailings Dam
Madrid / Seville Highway
11
12
La Parrilla – Mineralisation
• The thickness of the veins varies from a fraction of a millimetre to more than 3m, with an average of
about 10cm
• The reefs are arranged in a series of packages of 10m to 45m in width and showing a good
continuity up to 300m deep and several hundred meters in the direction
13
La Parrilla – Mineralisation
Mineralized quartz veins contain scheelite (often
coarse-grained), arsenopyrite, cassiterite, muscovite,
and smaller amounts of wolframite, pyrite, tourmaline
Greisenized granite fingers show high-grade
intersections of up to 55 m at 0.73% WO3
La Parrilla - Mining operations
14
Infrastructure created:
• Ramp access to RoM Pad
• Contractor platform
• Main access track
Mine equipment in situ
First blasting carried out
La Parrilla - Strategically located
Initial Mining Area
Crushing Circuit
15
Primary Crushing
Plant Secondary Crushing
Plant
La Parrilla - Simple open-pit mining & processing
Open Pit Mining
Mining UnderwayCrushing & Screening Plant
350tph - €3.2m Commissioned & Operational
Crushed Ore Bin
6,000t - €300k Fully Operational
Jig & Mill Pre-Concentration Plant
350tph - €5.5 Commissioned on Ore
Shaking Table Cleaning
12tph
Spiral Concentration
155tph
Sulphide Flotation
3tph
Electrostatic Separation
0.5tph 16
La Parrilla - In production
Crusher Plant Operating at Design
17
La Parrilla - 3D Model of crusher
18
Completed
Design
La Parrilla - In production
First Ore to Crusher Plant
19
La Parrilla - In production
Mined ore fed to existing concentrator
20
La Parrilla - In production
LNG Power Station Commissioned & Delivering Power
21
La Parrilla - In production
Jig & Mill Plant Commissioned on Ore
22
La Parrilla - In production
Production Start
23
La Parrilla - In production
Shipments Underway - Payment at Mine Gate
24
Development timeline - nearing completion
25
Crusher Plant Completion
First Shipments
Crusher Plant First Ore
Jig & Mill Plant Completion
Jig & Mill Plant Commissioning
Production Underway
2Q 2019 - Early 3Q 2019Concentrator Plant Completion
From 2Q 2019Ramp-up to T2 Production
Project financial overview
26
PRODUCTION Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
RoM Feed Rate (kt) 2,004 2,004 3,200 3,477 3,500 3,489
WO3 production (MTU) 184,265 181,496 236,051 279,409 252,073 253,274
SN production (t) 125 138 363 274 272 241
Tungsten price - APT (US$ / MTU) 245 263 288 313 313 313
Tin price (US$ / t) 18,500 19,500 20,000 20,000 20,000 20,000
INCOME STATEMENT Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Net Revenue 34,001 36,055 53,819 66,480 60,326 60,152
Opex (18,784) (17,445) (30,360) (24,261) (20,517) (21,160)
EBITDA 15,216 18,610 23,460 42,219 39,808 38,992
Source: Financial Investment Decisions Report summary as announced on 25 August 2017.
Note: Assumes Argus Forecast for tungsten APT price; Note that all debt figures and related coverage ratios are for illustrative purpose only
(US$000’s)
4.9x4.0x
3.2x
13.6x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
Year 1 Year 2 Year 3 Year 4 Year 5
CFADS / Interest Expense
Key project financial metrics
Key Financials Leverage
Interest Coverage Operating Cash Flow
($ in millions)
1.8x
1.4x
1.1x
0.0x0.0x
0.2x
0.4x
0.6x
0.8x
1.0x
1.2x
1.4x
1.6x
1.8x
2.0x
Year 1 Year 2 Year 3 Year 4 Year 5
Total Debt /EBITDA
$17.6$20.0
$24.2
$42.8
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
Year 1 Year 2 Year 3 Year 4 Year 5
Operating Cash Flow
Source: Financial Investment Decisions Report summary as announced on 25 August 2017. Note: Assumes Argus Forecast for tungsten APT price; Note that all debt figures and related coverage ratios are for illustrative purpose only 27
38.0 40.3
60.1
74.2
67.4
15.218.6
23.5
42.2 39.8
0
10
20
30
40
50
60
70
80
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Gross Revenue
EBITDA
Régua tungsten project - Portugal
28
Low Capital Cost
€4-6mHigh Grade 0.3%
3 times LPLong Life
20+ years
Simple Low
Cost processing
First Ore
Q1 2020
Low cost underground mining
using adits
Régua
29
• High-grade, low-capital cost development with significant scope to increase the resource base
• Contract signed for ore haulage and crushing at Régua with Francisco Pereira Marinho Imaos
• Concentrator at La Parrilla to be moved to Régua in Q3 2019
Régua resource section
• Open deposit in all
directions and at depth
• Large high-grade north-
west extension30
Régua development
3 underground mine
adits access 70,000t
of high grade ore @
0.33% WO3
Utilising existing
crushing & screening
infrastructure close to
the mine
Simple gravity
concentrator using
spirals and shaking
tables
ROM Feed Grade 0.33% - Production 1,000 tpa
31
São Martinho, Portugal - gold resources
São Martinho Gold Project
• JORC resource estimate 3mt @ 1.04g/t gold containing 111,987oz
• SMD-009 intersection: 56.4m grading 2.34 g/t gold from surface
• Near term target 250,000oz
32
Management team +130 years of experience
33
Celestino Parejo
Government
Relations / Mining
Mining engineer
with over 30 years’
experience in the
technical direction
of mining projects
in the Extremadura
region of Spain and
internationally
Fernando de La
Fuente
General Manager
Geologist with more than 43 years’
experience in the exploration and mining
geology industry in Europe, Africa and
North America and Latin America
Mechanical process
engineer with 10
years’ experience in
mineral processing
and resource
development. Aaron
has worked for
Fortescue Metals
Group, Syncrude
and Composites
Innovation Centre.
Aaron Szumilak
Metallurgist &
Process Engineer
Michael
Masterman
Chairman
Mr Masterman has an exceptional track record in
establishing and financing new resources companies.
He has been a founding shareholder at Fortescue
Metals Group, Po Valley Energy & Atacama Metals
Juan Garcia
Valledor
Operations
Manager
Mining Engineer with
25 years of
experience in
management of
industrial processing
plants and design,
planning,
management and
rehabilitation of open
pit mines
%
M. Masterman* 18.34
Beronia Investments Pty Ltd (B. Pirola)** 5.21
M. Garvie 3.42
Miton Group 3.38
Substantial Shareholders (18 June 2019)
Corporate snapshot
34
Michael Masterman – Chairman
Byron Pirola – Non Executive Director
David Garland – Non Executive Director
Jim Argalas – Non Executive Director
Pablo Neira – Non Executive Director
Board of Directors
Share Price Performance (1 June 18 to 1 June 19)Financial Information (18 June 2019)
Share price 0.470 GBX
52 week high / low 0.600-0.405 GBX
Number of shares (undiluted) 6,030,666,440
Market Capitalisation £28.34m / US$35.85m
Cash (as at 31 Dec ‘18) £6.09m
Debt (as at 31 Dec ’18) US$38.65m
* Includes Symmall Pty Ltd
** Includes related party interests
Price GBX
Why invest in W Resources?
FundedLarge low
cost mines
Near construction
completion
Skilled ‘can do’team
Significant earnings
growth from 2019
Broker valuations
US$70-80m vs
US$37m market cap
35
Appendix
36
Reserves and resources
37
La Parrilla Proven and Probable Mineral Reserves - JORC 2012 (RNS 14 June 2017)
CategoryTonnes Grade Metal Content Grade Metal Content
‘000 WO3 (ppm) WO3 (t) Sn (ppm) Sn (t)
Proven 1,177 995 1,171 251 295
Probable 28,577 928 26,511 111 3,156
Total 29,754 931 27,683 116 3,451
Régua JORC Compliant Mineral Resource Estimate (RNS 27 October 2015)
Category Tonnage (Mt) WO3 % Cut-off (WO3 %)
Indicated 3.76 0.304 0.1
Inferred 1.70 0.227 0.1
Total 5.46 0.280 0.1
São Martinho Maiden JORC Compliant Mineral Resource Estimate (RNS 8 June 2016)
Category Tonnage (Mt) Au (g/t) Au Content (Oz) Cut-off (g/t Au)
Indicated 0.48 1.03 17,363 0.5
Inferred 2.56 1.05 94,624 0.5
Total 3.04 1.04 111,987 0.5
LaParrilla JORC Compliant Mineral Resource Estimate (RNS 11 May 2017)
Category Tonnage (Mt) WO3 (ppm) Sn (ppm)
Measured 1 1,115 278
Indicated 35 1,004 110
Inferred 13 974 97
Total 49 998 110
Financing & development of La Parrilla complete
(US$ in millions)
Development
ROM Tungsten Capital EBITDA*
T2 2 Mtpa 2,700 tpa $27.8m $20m
T3.5 3.5 Mtpa 4,000 tpa $20m $40m
Finance T2
$35m term loan financing
- T2 Construction $28m
- Fees / Interest / Contingency $2m
- Contingency / WC $5m
Total Term Loan $35m
Equity Capital Invested to date $16m
Total Capitalisation $51m
La Parrilla Grant -$7m
TOTAL $44m
* FID Study 3 Year Average published 25 August 201738
BlackRock US$35 million La Parrilla financing
• Fully funds La Parrilla T2 Mine Construction
• US$13.125 million received in February 2018
• Balance of US$21.875 million received in May 2018
• Backing from of one of the world’s largest fund managers
• The Loan is for a scheduled term of 5 years, with a 2 year non call period
• The Loan is subject to an average 5 year interest rate of 12.6%
• First 18 months interest is Payable in Kind (“PIK”) and added to the principal, while 50% of the Q3 2019 / Q2 2020 interest is PIK and 50% is payable in cash
• BlackRock were issued warrants totalling 5% of W’s fully diluted equity
39
Board of directors
Michael
Masterman
Chairman
Mr Masterman has an exceptional track record in establishing and financing new resources companies. He completed the US$1.15bn sale of a 31% interest in the
Fortescue Metals Group’s majority-owned FMG Iron Bridge iron ore company to Formosa Plastics Group. Following 9 years at McKinsey, and 8 years as an
Executive Director of Anaconda Nickel, he has been a founding shareholder at Fortescue Metals Group, Po Valley Energy and Atacama Metals.
Byron Pirola
Non-Executive
Director
Byron is Managing Director of Port Jackson Partners Limited, a Sydney based strategy management consulting firm. Prior to joining Port Jackson Partners in 1992,
Byron spent six years with McKinsey & Company working out of the Sydney, New York and London Offices and across the Asian Region. He has extensive
experience in advising CEOs and boards of both large public and small developing companies across a wide range of industries and geographies. Byron is a Non-
Executive Director of Po Valley Energy Limited.
David Garland
Non-Executive
Director
David is the former General Counsel, Secretary and Chief Compliance Officer of Dominion Petroleum Limited (an oil and gas exploration company then listed on the
LSE), Legal Advisor to Hague and London Oil plc (an oil and gas exploration company listed on the LSE) and non-executive chairman of Saffron Energy plc (an oil
and gas exploration company listed on the LSE). Before joining Dominion, he had practised as a barrister for 18 years from Brick Court Chambers, a leading
commercial barristers’ chambers in London. David currently provides flexible legal counsel services to various private and listed companies through The Legal
Director Limited.
James Argalas is the founder of Presidio Union, LLC, a company that specialises in providing financial analysis and corporate advisory services. Prior to founding
Presidio Union, James was a Principal at Watershed Asset Management and NM Rothschilds, an Associate Principal with McKinsey & Company and an Associate
at Goldman Sachs.
Pablo Neira currently works with Casa Grande de Cartagena, family office of several members of Del Pino family, involved with direct investments. Pablo is former
CEO of Urbar, a Corporate Services General Manager at Valdepesa Textil and Finance Director at Global Steel Wire Group. Prior to joining Global Steel Wire
Group, he was Manager at A.T. Kearney in New York and at the Swedish group Mölnlycke as Controller for southern Europe.
40
James Argalas
Non-Executive
Director
Pablo Neira
Non-Executive
Director
Regulatory permits
Current Mining Lease
• Fully granted – expires 2068
• Provides access to tailings facilities for T2
T2 Mining Approvals
• Mining plans submitted to the Department of Mines (DM) in Q1 2015
• Environmental Impact Assessment submitted in Q1 2015
• First initial review stage completed Q2 2105 by the DM
• Environmental team has provided written feed back to queries
• Environmental Impact Assessment (EIA) approval received in Q3 2015
• Full mining approval granted for the T2 stage development
T3.5 Mining Approvals *
• Following discussions with the Environmental and Mining Authorities the
LP team has submitted an initial application for the T3.5
*All required approvals (environmental, water, heritage, etc.) fall under the single mining lease application41
Key investment highlights - La Parrilla
• “Heavy” Tungsten hosted in quartz veins within soft “light” shale host rock
• Demonstrated track record of high recovery of WO3 - 7Mt ore mined and processed
Favourable Geology
and Proven
Metallurgy
• Cash cost of US$94 / mtu (1) – first quartile of the global tungsten cost curve
• High grade ore at surface with higher tin grade in first 3 years boosts early cash flowLow Cost Producer
• Existing plant, site offices, and tailings ponds
• Connected to grid power and water and 7km from 4-lane Madrid-Lisbon highway
• Mining lease to 2068 and full authority to mine and process
Existing
Infrastructure
and Regulatory
Approvals in Place
• Initial 2 mtpa ROM at T2, expanding to 3.5 mtpa ROM for T3.5 phase in year 3
• Coarse grain ore amenable to low cost
• Simple gravity separation techniques supporting high metal recoveries
Conventional yet
Efficient Process
• Metso crusher plant
• allmineral jig+mill plant and concentrator plant
Industry Leading
Equipment Suppliers
• Offtake agreements signed with two investment grade publicly traded firms for 80% of
production
Strong Offtake
Agreements with
Investment Grade
Companies
1 - Tungsten is typically priced according to metric ton units (“mtu”) of Ammonium Paratungstate (APT), which is equal to 10 kg. 1 mtu of APT contains approximately 7.93kgs of tungsten
2 - Assuming a 20% discount to the current tungsten APT price of US$250/mtu
42