RE: Generally20 Jun 2019 11:56
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Ormonde Mining* (ORM LN) 3.15p, Mkt Cap £14.9m – 2018 Results and Barruecopardo progress report
Ormonde Mining has reported a loss of €1.65m for the year to 31st December 2018 (2017 – loss of €0.1m) as it developed the 30% owned Barruecopardo tungsten project in Spain. The loss included a €0.6m impairment charge against the La Zarza project in southern Spain as well as Ormonde Mining’s €0.78m share of the loss on the operating associate which holds the Barruecopardo project.
The company reports that the project construction has now been completed within the budget and “broadly in line with its construction schedule” and is now in the process of ramping-up phase to the targeted 1.1mtpa throughput under the management of the mine subsidiary, Saloro.
Throughput levels consistent with the targeted 1.1mtpa processing rate are being achieved and the plant is producing “concentrates … from low-grade ore feed are starting to achieve targeted specification on a regular basis while ongoing refinements to the processing circuits continue to be implemented”.
At this stage, ore is being mined from two small starter pits while waste removal “of around 80 vertical metres of waste rock from the east wall of the historic pit is to be accelerated to bring forward access to the main orebody, where the tungsten mineralisation is present as a much broader, more continuous high-grade zone”.
The lower than expected grades encountered in the northern starter pit have prompted a switch to the southern starter pit and an acceleration of the planned waste stripping over the main orebody in order to access higher grade feed for the plant.
Ormonde Mining’s Chairman and Interim Managing Director Michael Donoghue, commented that “the lower grade ore encountered in the initial, peripheral starter pit will make the remainder of this year somewhat challenging as Saloro's profitability and cashflows will continue to be constrained during the mine's ramp-up phase, however the progress made to date on processing of this lower grade material should stand the Project in good stead as it transitions into the main, higher grade orebody towards the end of 2019."
As the Barruecopardo project moves into the production phase, management is addressing opportunities for future expansion and has identified two longer term objectives, “to complete the disposal of our La Zarza interests and take a fresh look at our Spanish gold exploration holdings and new licence application areas, in western Spain which have been identified as having gold exploration potential.”
Commenting on the current tungsten market and the commodity outlook, the company explains that prices for the benchmark ammonium paratungstate (APT) peaked at US$352/mtu (metric tonne unit) in June 2018 as production declined in China as mines and plants were closed in response to more stringent implementation of environmental regulations.
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