W Resources confirm Funding Package

Great news for W Resources shareholders. It’s been a longtime coming but at last Mr Masterman has delivered. It’s quite a feat to discuss a $35m funding package (nevermind secure one) when your company market cap is less than $30m. It could have been another painful dilutive ‘AIM’ story for investors. Hence today’s confirmation should not be underestimated. The terms look a little hefty in interest rate terms and the 5% warrants have not been disclosed as yet but my guess is that BlackRock will have wanted these sub 0.5p which might explain the small drop pre initial funding news RNS in January 2018. That all said, I would take this deal over equity dilution everytime. Today… the market cap is almost double the pre-funding discussion level at $57m. Roll on production in 2019!

W Resources is currently the best performer across TheShareHub top ten picks with a near 70% increase in just 6 weeks. It looks odds to be the first multibagger of the hotlist picks and needs a test of 0.77p to get a mutibagger trophy.

Current Share Price 0.64p

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RNS Number : 0734F
16 February 2018
W Resources Plc

US$35m Loan Facility Finalised with BlackRock to Fund La Parrilla

W Resources Plc (AIM:WRES), the tungsten, copper and gold exploration and development company with assets in Spain and Portugal, is delighted to announce that the Company has signed a Credit and Guaranty Agreement (the “Agreement”) with the lenders thereunder (the “Lenders”), including one or more funds managed by BlackRock Financial Management Inc. (“BlackRock”) to provide a US$35 million secured term loan facility to W Resources to fund the La Parrilla mine development (the “Loan”).

The first US$13.125 million is expected to be drawn this week after satisfaction of the conditions precedent applicable to such funding, with the balance of US$21.875 million expected to be committed and funded in Q2 2018, after the satisfaction of a number of conditions precedent, including those typical for this type of term loan.

The key terms of the Loan 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;

— Subject to any early repayment permitted or required under the Agreement, repayment will made by way of a cash flow sweep, utilising free cash to repay the loan;

— 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 Payable in Kind (“PIK”) and added to the principal, while 50% of the second year interest is PIK and 50% is payable in cash;

— Lenders will receive a non-refundable upfront fee of 3% of the face value of each of the respective Loan disbursements;

— Lenders will receive warrants totalling 5% of W’s fully diluted equity.

Michael Masterman, Chairman of W Resources commented: “We are delighted to have partnered with BlackRock to obtain this US$35 million secured term loan facility. The Loan provides full funding for La Parrilla and now it is full steam ahead.

“Engineering and planning at La Parrilla is advanced and the three primary construction contracts have been awarded. As outlined, the timetable to deliver the project is 12 months from the close of financing which moves the Company into production in Q1 2019.”

David Trucano, Portfolio Manager, BlackRock Global Credit team commented: “We are pleased to provide funding on behalf of our clients to restart operations at La Parrilla, one of the most efficient mines in Europe. We believe the current dynamics of the tungsten market present a unique opportunity for W and our clients.”

Short Term Loans

In order to provide interim funding, each of, Beronia Investments Pty Ltd ATF Duke Trust, of which Dr Byron Pirola (a director of the Company) is both a beneficiary and trustee and Symmall Pty Limited, of which Mr Michael Masterman (a director of the Company) is both a beneficiary and trustee, have lent the Company short term loans of EUR100,000 each. The loans are unsecured and carry an interest rate of 10% per annum. Each of the loans will be repaid using the first draw down of US$13.125 million under the Agreement.

By virtue of their size, the loans constitute related party transactions under Rule 13 of the AIM Rules for Companies. The independent director of W, having consulted with the Company’s nominated adviser, considers that the terms of the transactions are fair and reasonable insofar as the Company’s shareholders are concerned.