UK-based copper and tungsten mining company W Resources has started a process to raise $24m for the development of its La Parrilla tungsten and tin project in Spain. 

The funding raised will be used to finance the $27m, two million tonnes per annum (ROM) T2 project of the La Parrilla mine development. 

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The company has reported that completion of construction and commissioning of the project are scheduled for the second quarter of next year. 

The expansion project will allow W Resources to mine at a rate of two million tpa, with an estimated production capacity of 2,500tpa of tungsten concentrate and 500tpa of tin concentrate. 

Meanwhile, documentation on the company’s final investment decision (FID) report is underway.

The mining company has secured the services of Australia-based specialist debt advisory group BurnVoir Corporate Finance to arrange financing for the expansion project. It is looking for receipt of firm term sheets by the mid-year, with financial close in the third quarter of this year. 

"La Parrilla’s comparatively low-capital cost allows us to target the financing of La Parrilla with a sustainable quantum of debt with limited dilution to existing shareholders."

Furthermore, it is negotiating vendor finance for the capital components of the T2 project. 

Allmineral Aufbereitungstechnik was previously awarded the design and construction contract for the Jig / Mill at a contract price of €4.98m ($5.24m) and is providing vendor finance for just under 50% of the price.

Alongside debt finance and vendor finance, W Resources will secure an additional $3m in equity or customer financing to complete funding of the T2 capital expenditure.

W Resources chairman Michael Masterman said: "The credit metrics for the debt component of the financing are strong and we are engaged in discussions with multiple debt financiers and the finance team, led by BurnVoir, is highly confident of completion of a debt financing of around $24m. 

“La Parrilla’s comparatively low-capital cost allows us to target the financing of La Parrilla with a sustainable quantum of debt with limited dilution to existing shareholders.” 

Steps have been incorporated in T2 project to allow a timely expansion of La Parrilla to a mine rate of up to 3.5 million tpa, which will pave the way for increased production and lower operating costs.