Ormonde Mining facing fresh production delays

Commercialisation of the potentially lucrative Spanish mineral mine being developed by Co Meath-based prospecting firm, Ormonde Mining, is likely to be delayed until next year.

However, the lifespan of the highly-rated Barruecopardo tungsten mine, near Salamanca, is likely to be lengthened, from the original estimate of nine years, up to 14 years.

This is because the original estimate was based on drilling results from depths of 80-250 metres.

However, a drilling update, published by Ormonde earlier this week, detailed good tungsten results from drill depths of over 400 metres.

“The excellent drilling results achieved from the recently completed drilling programme, below the base of the planned open pit, are most satisfying, confirming our belief that there is significant potential to substantially extend the mine life at Barruecopardo, through the development of a stage-two underground mine.

"Works in this project, including further drilling, will continue during the project construction and initial production periods,” said Ormonde’s managing director, Steve Nicol.

Ormonde owns 30% of Barruecopardo, having sold 70% to US private equity firm, Oaktree Capital Management, last year, in order to fund the project’s development.

The mine had been expected to become commercial by the end of this year, but this is likely to be delayed into next year, unless a local government administrative appeal — relating to a compulsory land-acquisition process — is concluded quickly.

Elsewhere, yesterday, Shannon-based engineering services firm, Mincon, reported a 13% year-on-year increase in first-quarter revenues; largely driven by acquisitions made last year.

The company — which, back in March, said it was in discussions with a number of potential acquisition targets — also noted, in its latest trading update, that its balance sheet remained strong, with net cash standing at €35.5m, as of the end of March.

The company — which makes industrial drilling tools — said it had seen little demand for capital equipment in the current environment, and might move towards a rental model, to utilise its investment in that category.

Nonetheless, management said it foresaw a pick-up in trading, as the year continued.

“Overall, taking account of trading in the first three months of the year, we expect some improvements in the market for our products in 2016,” it said.

Back in March, Mincon reported a near 30% rise in annual revenues, to just under €70.3m, but a 3% dip in operating profit, to just shy of €10m.

“In the context of the weak commodity backdrop, Mincon’s statement provides comfort on the group’s ability to weather the difficult conditions, as noted by peers,” said Nuala McMahon, of Goodbody Stockbrokers.