ORM.L Regulatory News (ORM)

26 Feb 2008 07:00

Ormonde Mining PLC26 February 2008 Ormonde Mining plc Further Drilling Success at Salamanca Tungsten Project DUBLIN & LONDON: 26 February 2008 - Ormonde Mining plc ("Ormonde" or the "Company") is pleased to report further drilling success and progress on itsevaluation programme at the Barruecopardo Tungsten Project in Salamanca, Spain(the "Project"), where it is continuing a "fast-track" evaluation following thepositive Order-of-Magnitude Study, details of which were reported on 24 January. Highlights • New results include 1 metre grading 4.1% WO3 in BAR-28. This is thehighest grade interval so far from the 2007-2008 drilling programme. • In addition, results from drill hole BAR-27 include 1 metre grading1.1% WO3, 4 metres grading 0.43% WO3 and 4 metres grading 0.4% WO3. • Drilling continues to intersect and extend the mineralised zones whichformed the January resource estimate of one million tonnes grading 0.7% WO3. Todate five main mineralised zones have been identified at the Project. • All drilling results received to date and new plans of the Projectarea are contained in the PDF version of this announcement atwww.ormondemining.com/doc/press/pr080226.pdf. • The first stage of resource drilling has been completed along the 1.5kilometre length of the known mineralised system. The results of this programmewill be received during the next 2-3 months and are expected to show an increasein the current 1 Mt resource towards the 1.5 Mt initial resource target. • Phase 1 metallurgical programme also in progress following on fromsuccessful scoping level tests during 2007. Kerr Anderson, Managing Director, said: "We are very pleased with the rapid progress we continue to make atBarruecopardo as we build upon the positive results of the Order-of-MagnitudeStudy. The new drilling results highlight the potential to add tonnage to ourexisting resource estimate in the near-term, and we are increasingly confidentthat we can achieve our stated initial 1.5 million tonne resource target withthe recent drilling programme." "As we advance our evaluation of the Project we are also encouraged by recentmarket commentary supporting our own view that tungsten has a promising futurewith higher prices predicted over the term that we aim to have Barruecopardo inproduction." In January Ormonde reported its Order-of-Magnitude Study which indicated that anunderground production rate of 200,000 tonnes per year would be appropriate fora start-up mining operation at the Project. This could result in tungstenproduction of 90,000 metric tonne units of WO3 per year. The production ratecould be increased post start-up if, as expected, the reserve base at theProject is upgraded on further drilling. Total capital costs to develop theProject would be in the region of €10-15 million, and net surplus cashflows fromthe initial operation should be in the region of €5 million per year. New Drilling Results Significant assay results received since the last drilling report are asfollows: Hole From (m) Width (m) True Width (m) WO3% ZoneBAR-27 28.0 4.0 3.3 0.4 FP 72.0 1.0 0.8 1.1 80.0 1.0 0.8 0.5 96.0 4.0 3.3 0.4 FC 264.0 1.0 0.8 0.4 282.0 2.0 1.7 0.6 FMBAR-28 16.0 1.0 0.7 0.9 171.0 1.0 0.8 4.1 FMBAR-29 63.0 1.0 0.8 0.4 FC 196.0 1.0 0.8 0.3 FM Zone codes: FP = Filon Principal Zone FC = Filon Central Zone FM = Filon Maestro Zone The interpretation of drill hole BAR-27 shows that it intersected all threemajor zones in areas not included in the January resource estimate. Three othersignificant mineralised intervals were intersected which have not been includedin the resource; further interpretation work and the current definition drillingprogramme will determine the continuity of these zones and assess their resourcepotential. BAR-28 and BAR-29 are infill holes primarily targeting the Filon Maestro Zoneand confirm the expected geological continuity. BAR-28 further highlights thepotential for very high grades of tungsten in this zone. Metallurgical Testwork In July 2007, the Company reported preliminary metallurgical testwork undertakenby SGS Lakefield Research on two samples of the tungsten mineralisation. Thisdemonstrated that tungsten mineral(s) are coarse grained and would beconcentrated effectively by traditional low cost gravity equipment. Furtherdetailed testwork is now underway to optimise a gravity testwork flowsheet anddetermine the key processing parameters for the production of a saleabletungsten concentrate. Kerr Anderson PhD EurGeol PGeo, Managing Director of Ormonde Mining plc, and aqualified person as defined in the Guidance Note for Mining, Oil and GasCompanies, March 2006, of the London Stock Exchange, has reviewed and approvedthe technical information contained in this announcement. A glossary explaining technical terms contained in this announcement can befound at www.ormondemining.com/projects/glossary.html. Enquiries to: Ormonde Mining plc Kerr Anderson, Managing Director, Fraser Gardiner, Director Tel: +353 (0)46 9073623 Bankside Consultants Simon Rothschild / Louise Mason Tel: +44 (0)20 7367 8888 Mob: +44 (0)7703167065 Davy (Nomad / IEX Adviser) Fergal Meegan Tel: +353 (0)1 6796363 Brewin Dolphin (UK Adviser) Gordon Culfeather Tel: +44 (0) 141 314 8121 ENDS About Tungsten Tungsten is most frequently used as tungsten monocarbide, which has a hardnessclose to diamond, in cemented carbides. The principal tungsten applicationsinclude its use in cutting steels and in tungsten alloys, electronics, andchemical products. Prices of tungsten concentrates are expected to remain buoyant for the longterm, and are currently quoted by the Metal Bulletin in the range $160-$180 permetric tonne unit. A metric tonne unit is equal to 10kg of WO3, which equatesto 1.0% contained WO3 in the rock. About Ormonde Ormonde Mining plc is quoted on the AIM in London and the IEX in Dublin.Ormonde is a mineral development and exploration company focused on Spain, withthe objective of developing mining projects and taking them into production. For more information please visit www.ormondemining.com. This information is provided by RNS The company news service from the London Stock Exchange