Just to add that there is the same lack of clarity about the offtake pricing in WLFE's offtake agreement with Wolfram Bergbau und Hutten AG’ (WBH) and U.S based ‘Global Tungsten & Powders Corp.- although it is clear it is at a DISCOUNT to spot price. From a WLFE research note in 2013: 'Pricing for the 65% tungsten trioxide concentrate will be calculated based on the prevailing APT price with a discount applied to take into account treatment and refining costs'.
I don't think there is any info in the public domain other than the March RNS about the detail of the offtake with Noble as I have looked into it. You have to assume that it is just simply a sales contract purchasing 100% of production for 5 years, extension negotiable. It is not even clear to me what the pricing structure actually is, althogh it is clear that it is variable from the language in the RNS, so could just be at spot price or indeed at discount or premium to spot. However, if it was at a premium to spot price I think they'd have been quick to mention that. It is true that other offtake deals have included things like development costs for the producer e.g. Carbine's with Mittsubishi Japan, Massan's with HC Starck and WOULFE's with IMC. Others may have seen something on the Noble offtake that I have missed?
Feel free to ignore this big report but just posting for interest - don't print it out!, covers WLFE/ ORM/ WRES and THR. http://www.first-columbus.com/wpfc/wp-content/uploads/2014/09/UK-Mining-Development-Projects-September-2014.pdf
I figure 'a slim chance' wouldn't have read very well in a bullish magazine article on the company, so the writer opted for the more bullish use of the word 'inevitable' but that is total BS IMO. Whilst I can see the principle of what you are saying, IMO takeover post-licence issuance is a less likely scenario. The likes of the prior takeover approach by Almonty was on the basis of ORM being weak, with licence in place their position would be considerably strengthened, so Almonty unlikely to re-approach IMO especially as they were given short shrift first time around, unless of course ORM struggle to get the finance in place.
P R E D A T O R S JP Morgan Asset Management clearly sees value here and is the largest shareholder with an 8% stake. This is followed by Jupiter Asset Management with a 6%, while M&G Investments decided to up its interests this year by 50% to a 6% stake. These institutions clearly see value and while it could be another 12 months before the mine actually opens up, once the mining licence is issued it is inevitable that national predators will start circling Ormonde to take it out and secure the company’s hugely valuable tungsten reserves. This could happen any time after the mining licence is issued. The smart investors currently on board are well advised to hold on as there should be real excitement over the next 12 months'. I love the use of the word 'inevitable' in the above para (ahem).
'At the current share price of 6c, Ormonde Mining is capitalised at €26m – that is less than one year’s projected cash flow, even on the small initial capital investment programme, with a pay-back of €261m over the initial nine years of this small mining operation. This equates to 10 times the current value of the Ormonde equity. With Swedbank on board to raise €50m capital for the mining company since the beginning of this year, Ormonde Mining is getting very near to the point of takeoff but Swedbank required Ormonde to sign up to a five-year Tungsten off-take agreement before fi rming up capital for the mine. Earlier this year, Mike Donoghue and Ormonde md Kerr Anderson negotiated an offtake agreement with the Noble Group, one of the giant supply chain managers in the metals and minerals industry, who have committed to buy the projected production over the initial five years for the sum of around $350m. With sales of $100bn, Noble is one of the biggest companies in the world, which makes it a very stable counter-party for Ormonde Mining to raise funds. The economics of mining too look very profitable in that the expected cost of production only comes to $100per tonne, whereas the current tungsten metal price is $375 per tonne, leaving Ormonde Mining looking at huge margins. L I C E N C E Ormonde Mining have retained Fairport Engineering to cover the engineering design contract for the Barruecoparda mine to enable Ormonde Mining to prepare for the placement of key equipment needed when the mining licence is granted. Swedbank have arranged for the funding. On the gold exploration side, Ormonde Mining farmedout a 55% interest in the gold prospects in Salamanca and Zamora Province to Aurum Mining. Aurum carried out further drilling to prove up its Pino de Oro project, which identified gold resources of 130,000 ounces in the El Facho prospect. This drilling was quite successful but as yet further work needs to be done to prove this up. While gold is an interesting play for Ormonde, the core value is its tungsten mining prospect which is now getting very close to becoming a reality. If it wasn’t for the regular annual share placings needed to keep the company going – even though Ormonde only needed to raise €10m over the last three years – the share price would be reflecting the progress already made'.
Bringing a mine into production in the West is, however, no mean feat and executive chairman Mike Donoghue and his team at Ormonde Mining have been working flat out to bring the Barruecopardo Tungsten mining project into production over the last four years. Ormonde Mining had to document a comprehensive environmental impact study, exploitation plan, restoration plan, waste management plan, health and safety document and financial plan for the provincial mining authorities and then go through a lengthy public consultation process and review at local, provincial and regional level for the proposed new mining operation. The draft Environmental Impact Declaration (EID), prepared by the provincial authorities following a review of Ormonde’s Environmental Impact Assessment, was forwarded to the regional Department of the Environment in July last year. In January this year, the local authority received formal written notification from the regional environmental department of a positive determination in its report and subsequently received the all-important EID. This latter permit will deal with the next stage of the project, which involves convincing the Spanish Director General for Energy and Mines to issue a mining concession licence the granting of which will allow the project to move ahead. Parallel with the progress on the licence front, Donoghuedeveloped a financial feasibility study based on running an open-cast mine to extract the near-surface metal, thus maintaining a low capital cost of total plant investment of €48.5m. Y I E L D P L A N This set-up would only aim to mine a small portion of the total resource and was originally reviewed by PFS Consultants and, more recently, assessed by AMC Consultants. The initial mining project stacks up using someof the nine million tonnes of the identified ore body grading 30% tungsten trioxide Based on Scott Wilson Mining Consultants, who carried out an economic review, the €48.5m initial mining investment is set to yield an annualised operating cash flow of €29m, to pay back the capital cost in two years.
Bullish article on ORM in Phoenix mag. Hefty pinch of salt required with the section on 'predators' IMO, also ORM require E70m for mine development including a JV and/ or equity for E20m on top of the E50m bond funding, as confirmed by their RNS's but the E20m funding gap not mentioned in the article. Export restriction in China stuff is old guff now too due to their acceptance of the WTO conditions. ORMONDE MINING ON THE VERGE OF BREAKTHROUGH (article from “Phoenix” magazine 29 August 2014) 'The Ormonde Mining story is a strange one. It had been focused on trying to discover gold in the Iberian Peninsula for well over a decade. While the company had some success in finding potential mineable resources, as an accidental by-product of its search, Ormonde discovered one of the richest tungsten deposits in the world in the Salamanca Province in western Spain, worth well over €2bn. As yet the share price does not reflect this valuable asset in any way but with licensing now almost secured, there should be some significant movement. Tungsten is an extraordinary metal. Because of its unique characteristics of being the second hardest mineral in the world after diamond, the metal also has the highest melting point of all metals at 3,432 degrees centigrade, and also has a very high density, with thermal and chemical stability giving excellent electrical conductivity. Tungsten is essential to produce hard steel and super alloys for use in drilling, cutting and machining metal deposits, with its high temperature tolerance in particular essential for the production of jet engine turbines in the aerospace, car and chemical industries. When added to steel, it increases metal strength, tensile resilience, hardness and flexibility. Instead of this tungsten find driving Ormonde Mining’s share price through the roof, however, it has done the exact opposite. The problem is that Ormonde Mining is such a small company that it has to regularly raise funds and this keeps the share price depressed despite the fact that the company is approaching mining stage when plenty of money should start rolling in. The other notable features about tungsten is that 85% of the worlds total tungsten production is in mainland China. Because of its internal requirements for the metal and because of its strategic value, the Chinese have imposed mining restrictions and export quota restrictions as well as restrictions on opening up any new tungsten mines. With the rest of the world’s limited mining production putting a squeeze on the tungsten metal price, this traded steadily from 2005 to 2010 at a more than respectable $180-200 a tonne. However, as the world economy has begun to improve in the current decade, the tungsten metal price has steadily moved up to the current price of $375 a tonne. If you apply this price to Ormonde’s indicated and inferred mineral resource base of seven million tonnes, this gives a total gross value of
Even the FOXT boss is 'smelling the coffee' in that forward looking statement for next 6 months - my opinion is that he is being a bit optimistic LOL.
The graph here is telling the story as clear as day and I agree with your assessment. This company is a useful proxy for anyone who wants to be short of the topped out London property market at present and capitalise on (depending on your point of view) some 'health unwinding' or 'harder correction'. Foxtons IPO was always going to come near the top of the market after all they are the guys in the know and just repeating what happened last time things went bananas (although that was nothing compared to thie pumping/ speculating that went on over the last x months). Strong pound doing London no favours for foreign investors - why not buy Manhattan? 1/2 price per sq m compared to London. Big money will make big shifts to where there is more certain capital appreciation. I suspect FOXT numbers will start to paint a grim picture in the next 2 Q updates, the last set were flattered by the market topping out after all. This may get a relief bounce at around IPO opening price but let's face it, if it goes below that and closes, only strengthens the short case. Not advice LOL
the trend here. Got a little short trade back on running pretty well so far. Relief bounce at IPO price £2.30p? Next Q2 figures from the company may look reasonable but market has topped/ stagnating through Q2 and outlook for London market Q3 going forwards poor IMO. Pressure on lending multiples in the capital as well as spectre of interest rate rises and 15% foreign buyers tax in 2014 are likely only to impact negatively for this company in particular IMO.
Can only close positions on IG. Bodes well for further rises I would have thought. Wanted to open a long trade this am, bum. GLA
FOXT Looking very bearish, gone below the 23 September 2013 low, looks like further retrace is on.
Agreed, looking strong here, have taken an sb long position.
Probably not the one everyone is waiting for, just yet.... Tue, 15th Jul 2014 07:00 RNS Number : 2819M Ormonde Mining PLC 15 July 2014 15 July 2014 Ormonde Mining plc ("Ormonde" or "the Company") Barruecopardo Permitting Update The Board of Ormonde provides the following update on progress in connection with permitting of its flagship Barruecopardo Tungsten Project in Salamanca, Spain ("Barruecopardo" or "the Project"). In its press release of 29 April, 2014, Ormonde advised that the Authorities in Castilla y Leon had indicated that while the processing of the documentation for the mining concession was in its final stages, a legal review of the historic mining concessions (Barruecopardo was last operated in the 1980's) was required to be completed, with the conclusion of the permitting process anticipated in late June-July. Ormonde has now been advised that in the legal review to-date, the Authorities have not identified any concerns in relation to the cancellation of the historic mining concessions and it understands that the review has now been largely completed. However, a final formal request has been made by the Authorities to obtain comment from the owners of the historic cancelled concessions in relation to the cancellation process, no response having been received in relation to its initial request. A short additional time is required for this step before the review can be completed and the new mining concession issued to Ormonde. Kerr Anderson, Ormonde's Managing Director, commented: "Although this additional procedural step has been required to be completed prior to finalisation of the permitting process and the issuance of the new Mining Concession, we recognise, through communication with the Authorities, the importance which they place on the correct legal issuance of the new mining permit and of the continued support for the Project at all levels of the local, provincial and regional governments in Spain."
On my short as bought the stop in quite narrow given the possibility of a bit of a relief rally since doing the full sp retrace to IPO price. May go back in again for another go as still hold the same medium term bearish view on the London market but was a very profitable short term trade.
Good observation mate, little relief today for the housing related sector, which no doubt pleased holders but check those large end of day sells again here, in danger of becoming a feature.
Just calling how I am seeing it mate. Difficult for me to know where the support is going to be, if it doesn't kick in here. It has just done a full reversal back to 26 September 2013 low. Re. your rental market comment, do you know what % of their income comes from rental? I think they brand themselves more on the 'glamourous' premium sales end of the market but am interested to know. Ta
I'll be straight up, was looking for a way to go short of the London Property market and I think part of the answer is shorting this company as a proxy, sb doing well so far, although missed the 400p top. Barchart has this 100% sell, in this instance I'd agree. Foxtons listed pretty much at the top of the market and BG had to be patient for a decent return having bought them in 2007. London property market seriously overheated with paucity of first time buyers ready to pay eye watering prices, fearing inflation rises and mortgage lending tightening all putting the screws on. Yet Foxtons retain their over inflated commission structure vs the competition? CEO steps down to (possibly) pave way for shedding his remaining 8.1% interest?. BG still holding a large chunk of these (not sure how much post IPO?). But clearly trending downwards. Massive £3.6m sell trade on Friday as the U/T won't bode well for sentiment either. Probably a good time to take profits? Apologies to any investors here looking for a reversal, just my opinion.
Looks to have been a bit more buying interest in ORM recently at these levels, which I can understand. Might see a little run up in anticipation of the news this summer. Not a holder here but hold WRES, now in production. Worth a look if you like your W? Offtake news and production confirmation volumes confirmation expected shortly. Stockpiling production of W since April. Chairman just invested £180k and holds 35% of shares in the company, limited free float of shares available. Apols for the o/t if you are not interested. GLA