W Resources : 2020 Annual Report

2020

Annual Report

W Resources Plc

Contents

Chairman's Statement	2
Corporate Governance Statement	7
Group Strategic Report	12
Report of the Directors	15
Report of the Independent Auditors	22
Consolidated Statement of Prot or Loss and Other Comprehensive Income	28
Consolidated Statement of Financial Position	29
Company Statement of Financial Position	30
Consolidated Statement of Changes in Equity	31
Company Statement of Changes in Equity	32
Consolidated Statement of Cash Flows	33
Company Statement of Cash Flows	34
Notes to the Statements of Cash Flows	35
Notes to the Consolidated and Parent Company Financial Statements	37
Company Information	71

Annual Report 2020

1

W Resources Plc

Chairman's Statement

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 signicant plant challenges at the La Parrilla tungsten and tin mine in

Spain. The team has overcome many of these challenges and we are con dent 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 con dent 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 signicant hurdles, the team continuesto work tirelesslyto achievethe best outcomeand deliver on our objective of building a world class tungsten mining company.

The Company'sstrongsafety performancecontinuedin 2020with a totalrecordablelost time injury frequencyrate("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 rst targetof the ramp-up remainsto reach the target to mine 2mtpa("milliontonnes 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 rst 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 benet	s of this detailed process.
In the rst	nine months, recoveriesof tungsten and tin continued to improve following a realignmentof the mineplanaround

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.

2	Annual Report 2020

W Resources Plc

Chairman's Statement continued

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 ot ake 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, cond ent 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 eect.

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 signi cant synergies with La Parrilla as it has materially lower capital costs and will increase La Parrilla's nal concentrate production.

Annual Report 2020

3

W Resources Plc

Chairman's Statement continued

Development Strategy

Régua was W's second mine to come on stream. Mining operations commenced in early February 2020, targeting the rst 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 February2019, to protectthe Company's right to the area. We expectto 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 at 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 sucie nt funds were available to both fund the development of the La Parrilla mine and provide signic ant working capital. This is evidenced by:

In February 2020, W n alised a €5m facility with the Spanish bank, Banco Santander, S.A ("Santander") which repaid the €3m loan fromCajaRuralde Extremadura("CajaRural") and provideda net €2m of additional working capitaland 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 aec ted 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 Ocial ("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 re nance 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

4	Annual Report 2020