LONDON (Alliance News) - Ormonde Mining PLC Wednesday said it swung to a pretax profit in the first half of 2015 after disposing part of its stake in the project to secure a large financing deal.
The miner also promoted its interim managing director to the board on a full-time basis and a previous corporate development manager to the company's new chief financial officer as part of a restructuring process as its tungsten project moves into development.
Ormonde, which does not currently generate any revenue, reported a EUR2.6 million pretax profit in the first six months of 2015, swinging from the EUR1.1 million loss reported a year earlier.
That was after it booked a EUR3.4 million profit from selling down its stake in the holding company of the Barruecopardo mining concession in Spain.
"We entered 2015 on the back of having been granted the mining concession in November 2014, the final critical permit required to allow us to develop the Barruecopardo tungsten project. This final step in the de-risking process opened the door for the company to step up its capital funding activities," said the company.
In April, the company secured the Oaktree project financing deal which led to OCM Luxembourg Tungsten Holdings SARL, whose funds are managed by Oaktree Capital Management LP, providing Ormonde with a total of USD99.7 million which is sufficient to cover the entire development of the project alongside funds to conduct an early evaluation of a potential underground mining expansion of the project.
The total financing is split "favourably" between USD44.2 million in equity financing and project debt of USD55.5 million. For the provision of the equity component, Oaktree was given a 65% interest in the project with an additional 5% stake paid in interest. Following that, the project is 70% owned by Oaktree with the remaining 30% held by Ormonde.
Ormonde is now working on securing the relevant licences for the project and said although the tungsten market has succumbed to the general commodity and mining downturn it remains positive on the outlook over the coming years, forecasting current prices that are hovering around USD190 per metric tonne unit to rise to around USD300.
Additionally, it has completed an overhaul of the board to "provide the board with the appropriate leadership, experience and expertise" as it moves the project into development and begins to seek for "further expansion".
Steve Nichol has been appointed as managing director on a full-time basis, Paul Carroll has been appointed as the company's new chief financial officer and Jonathan Henry has joined the board as a non-executive.
Exisiting Executive Chairman Mike Donoghue has also reverted to being a non-executive chairman under the changes.
Nichol has been appointed as an executive director and was previously chief operating officer of the company and, since 3 August, 2015 following the sudden death of Managing Director Kerr Anderson, has been acting Managing Director.
New Chief Financial Officer Carroll has served as corporate development manager for Ormonde over the last three years, playing a key role in all aspects of the company's project financing for Barruecopardo. David Varian, who has been the company;s part-time CFO since 2011, will stay with the company as its financial accountant.
Ormonde shares were down 4.5% to 1.60 pence per share on Wednesday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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