LONDON (Alliance News) - Ormonde Mining PLC Wednesday said it has entered into an exclusivity period, and finalised and signed a term sheet with funds managed by investment manager Oaktree Capital Management LP for a financing package for its flagship Barruecopardo Tungsten Project in Salamanca, Spain.
In a statement, the Spanish-focused mineral resource company said the funding package would secure the funding needed for the development of the Barruecopardo Project and a budget to conduct the early evaluation of a Stage-2 expansion of the project.
"The total funding amount provided for under the term sheet is split between debt and project equity such that Oaktree would hold a majority position in the project," the company said in a statement.
Ormonde said that alongside Oaktree, it will now progress towards finalising the project financing arrangements, including completion of long form documentation and signing of binding agreements.
The company also said it has signed a loan agreement with Oaktree of USD1.5 million, which has been secured on a first priority basis by way of a share pledge of the project holding company.
"This loan arrangement provides Ormonde with near term working capital as it finalises project finance arrangements," the company said.
Ormonde said it had explored multiple avenues for funding for the project prior to the exclusivity arrangement with Oaktree. The exclusivity period extend to April 10.
"Completion of the financing package for our flagship Barruecopardo Tungsten Project, would mean that Ormonde is in a position to rapidly advance the project through its development stage during 2015 and towards production in the second half of 2016," said Managing Director Kerr Anderson.
Shares in Ormonde Mining were trading 3.7% lower at 3.01 pence Wednesday morning.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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