Ormonde expects final approval

Ormonde Mining is now expected to gain final formal approval for its potentially transformational Spanish-based tungsten project in the next few weeks.

On the back of its interim results presentation — covering the first six months of 2014 — the Meath-based mineral exploration firm yesterday said it has received all environmental approvals in relation to its Barruecopardo project near the city of Salamanca and is awaiting the final mining concession, which is expected imminently.

Yesterday’s first-half results showed an operating loss of €1.11m, up from €943,000 for the corresponding period last year.

Until Barruecopardo is up and running commercially, Ormonde’s financials are largely unimportant, given that the losses are being driven by administration costs linked with its headline project.

Nevertheless, yesterday’s interim results showed that progress is being made on debt funding arrangements and the company had cash balances of nearly €1.6m at the end of June. First commercial flow from Barruecopardo is expected late 2015/early 2016. The mining concession had been expected in August, but has been delayed by a legal review that is understood to now be complete and ready to be awarded.

It has been speculated that Barruecopardo could supply 8% of all tungsten, which is chiefly used in the aerospace sector, sourced outside of China, which is the leading supplier of the metal.

Ormonde expects to generate net revenues, based on current tungsten prices, of over $350m (€259m) over the initial five years of production.

Ormonde has already reached agreement to sell all production from Barruecopardo for the first five years of the mine’s life, with the buyer — Singapore-based investment holding company Noble Group — also having the option to extend that agreement.

“We have made very significant progress at out Barruecopardo project during the first half of 2014,” Ormonde chairman Mike Donoghue said yesterday, noting the deal with Noble Group, the receipt of the environmental permit, and the engagement of Swedbank as debt advisers.