9 Nov 2012 11:00
09 November 2012
Ormonde Mining plc
("Ormonde" or "the Company")
Antofagasta opt out of La Zarza Agreement
The Board of Ormonde provides an update on activities in connection with the option agreement (the "Option") with Antofagasta Minerals S.A. ("Antofagasta").
Following the recent completion of exploration programmes on the four new investigation permits and the assessment by Antofagasta of the resultant data, Antofagasta has now informed the Company it considers that a deposit of sufficient size and scale to meet Antofagasta's requirements does not currently exist at La Zarza and therefore it has elected not to fund further activities at La Zarza and to cease its Option. Accordingly Antofagasta has not earned any interest in the La Zarza project or the surrounding investigation permits.
In October 2009, Ormonde entered into an option agreement with Antofagasta to explore for additional copper resources on the La Zarza Copper Project, whereby Antofagasta could earn an initial 51% interest in the La Zarza permit area by spending US$7 million on exploration activities over a three year period. Activities during 2009 and 2010 were focussed on the La Zarza deposit and results were reported in September 2010. Based on work to that point, including geophysics, drilling and a new structural interpretation, a preliminary non-JORC compliant global mineral resource of 61Mt grading 0.8% Cu, 0.9% g/t Au, 0.6% Pb, 2.0% Zn and 5.7 g/t Ag, was estimated.
The option agreement was subsequently amended in April 2011 to cover four additional permit areas around La Zarza with the earn-in period extended to 2015. A budget of US$1.3 million was approved and funded by Antofagasta at this time for the exploration programme now completed.
Main Results of Exploration Programmes on the Four New Investigation Permits
·; Detailed gravity and airborne electromagnetic surveys were carried out over the permit areas
·; Diamond drilling of several target areas has been completed with a total of 3,048 metres drilled on eight targets, principally defined by a combination of gravity, airborne EM and geology
·; Drilling in hole UC002 intersected altered and brecciated volcanics over an interval of 147 metres, with pyrite mineralisation throughout but most intensely developed in the upper 40 metres. Although relatively weak base metal and gold values were returned, the style and vertical extent of the mineralisation is that of a stockwork which is commonly associated with mineral deposits in this area.
Kerr Anderson, Ormonde's Managing Director, said:
"Although Antofagasta has taken the decision to opt out of the agreement, it is understood to be principally based upon the group's corporate requirements with regards to minimum deposit size and scale at La Zarza. The programmes completed in the past year have provided further important information and results, including the mineralisation discovered in hole UC002, which will be valuable in the assessment by Ormonde of the potential for further copper resources. We will provide further information on our deliberations in due course."
Detail
Four investigation permits (comprising a total area of some 95 square kilometres), covering the strike extension of the La Zarza system and controlling structures, were awarded by the provincial mining authorities to Ormonde's subsidiary Ormonde Espana SL in August 2011, and these were included in the Option with Antofagasta, with work programmes on these permits funded by Antofagasta. The following work programmes were completed:
·; 1,039 gravity stations on a 400 x 50m grid over the permit area
·; 1,031 line kilometres of airborne electromagnetics (VTEM) over the permit area
·; Structural interpretation and mapping of relevant areas
·; 3,048 metres of diamond drilling in eight holes testing geophysical and geological targets
Of the eight holes drilled, one hole (UC002) encountered altered and brecciated volcanics over an interval of 147 metres hosting fine-grained pyrite mineralisation. Although only weak base metal and localised gold values were returned, the style and vertical extent of the mineralisation is that of a significant stockwork, and closely resembles stockwork mineralisation observed below the massive sulphides at La Zarza. A thin faulted "slice" of similar altered and mineralised volcanics was intersected in a second hole (UC001) drilled some 1.5 kilometres to the east of UC002.
Following the notification by Antofagasta of its intention not to fund further activities and withdraw from the Option, the Company will now review its position with regards to exploration options in light of the results of the programmes completed and the mineralisation in hole UC002.
Kerr Anderson PhD EurGeolPGeo, Managing Director of Ormonde Mining plc, and a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies, June 2009, of the London Stock Exchange, has reviewed and approved the technical information contained in this announcement.
A glossary explaining technical terms contained in this announcement can be found at www.ormondemining.com/en/investors/technical_glossary.
For more information please visit www.ormondemining.com or follow Ormonde on Twitter https://twitter.com/ormondemining or Linkedin http://www.linkedin.com/company/ormonde-mining-plc
Enquiries to:
Ormonde Mining plc
Kerr Anderson, Managing Director Tel: +353 (0)1 8253570
Bankside Consultants
Simon Rothschild Tel: +44 (0)20 7367 8888 Mob: +44 (0)7703 167065
Murray Consultants
Ed Micheau Tel: +353 (0)1 4980300 Mob: +353 (0)86 803 7155
Davy (Nomad / ESM Adviser)
Eugenée Mulhern / Roland French Tel: +353 (0)1 6796363
ENDS
About Ormonde
Ormonde Mining Plc is admitted to trading on the AIM market in London & the ESM market in Dublin. Ormonde is a mineral development and exploration company focused on Spain (Ticker: ORM).