ORM.L Regulatory News (ORM)

29 April 2015

Ormonde Mining plc

("Ormonde" or "the Company")

Barruecopardo Project Financing Finalised

Further to its announcement on 13 April 2015, the Board of Ormonde is pleased to advise that it has finalised project financing arrangements for the development of its flagship Barruecopardo Tungsten Project in Salamanca, Spain ("Barruecopardo" or the" Project") through the signing of binding agreements (the "Financing") with OCM Luxembourg Tungsten Holdings S.À R.L. ("OCM Tungsten Holdings"), funds managed by Oaktree Capital Management, L.P. ("Oaktree"). The Financing is being put to Shareholders for their consideration at an extraordinary general meeting convened to be held at 10.00 a.m. on 19 May, 2015, and its implementation is conditional on Shareholder approval.

Highlights

· Under the Financing Oaktree has committed to provide a total of USD 99.7 million (€90.4 million), which secures the full funding for the development of Barruecopardo, together with a significant budget to conduct the early evaluation of a potential underground mining Stage 2 expansion of the Project.

· The Financing is split favourably between a large component of project equity of USD 44.2 million (€40.1 million) and project debt of USD 55.5 million (€50.3 million).

· For the provision of the equity component, Oaktree shall be entitled to a 65% interest in the Project, with an additional 5% interest being consideration in relation to the provision of the debt facility, to result in a 70% Oaktree interest, to be held through a new company, Barruecopardo Joint Venture B.V. ("Barruecopardo JV"), with Ormonde holding a 30% interest.

· The debt facility includes flexible repayment terms which would allow for:

o cash to be retained within the business and applied towards the fast track development of an eventual underground mining Stage 2 expansion.

o the option of dividends to be distributed to Oaktree and Ormonde during the term of the facility.

· A shareholder agreement, which governs Barruecopardo JV, details a number of important decisions requiring the consent of both parties, providing a number of minority protections for Ormonde.

· Ormonde will receive an annual management fee of €1.0 million for services to be provided to the Barruecopardo Project under a management services agreement. This fee will cover Ormonde's current working capital requirements.

· The Financing also provides funds to allow Ormonde repay the USD 1.5 million working capital loan facility provided by Oaktree under a loan agreement entered into in February 2015.

· The Financing has been structured in a way that mitigates against the possibility of further dilution for Ormonde Shareholders through:

o the comprehensive nature of the funding package including a significant cost overrun provision;

o a debt facility with flexible repayment terms and an ability to retain cash to develop the business; and

o an annual management fee.

· Oaktree would undertake its investment in Barruecopardo JV through its European Principal Group ("EPG"), which is Oaktree's European private equity division, headquartered in London. EPG has a long-standing presence in the European market and has a successful history of partnering with companies and strong management teams to create long-term value in a number of industries.

The Company will today post to shareholders a circular and notice of extraordinary general meeting to approve the Financing (the "Circular"). A copy of the Circular will be available from the Company's website in accordance with the AIM and ESM Rules.

Kerr Anderson, Ormonde's Managing Director, commented:

"The USD 99.7 million project financing, committed by Oaktree, provides funding certainty and enables the development of Barruecopardo in the short term. The substantial USD 44.2 million of equity being provided by Oaktree, and flexible USD 55.5 million debt facility, together with the provision of an annual management fee which funds Ormonde Mining plc's working capital requirements, preserves for Ormonde Shareholders both value and significant upside exposure to the Barruecopardo Project and the broader tungsten market.

We would recommend that Shareholders vote in favour of the transaction at the upcoming EGM, enabling Ormonde to progress as part of a well-capitalised, industry significant, and long-life European tungsten mining operation."

Detail

The Board has been actively pursuing potential options for the financing of the Barruecopardo Project for the past two years. The options explored included, bank debt financing, bond debt financing, joint venture (project level) equity, and/or equity issued by Ormonde. The Board has engaged in detailed discussions with a number of potential joint venture parties, received indicative term sheets for bank and bond debt funding options, investigated the possibility of a large equity raise at Ormonde level (such an equity raise being a requirement under debt term sheets received) and considered other potential value realising transactions. The objective of the Board in this context has been to identify and source the best funding package available for the development of Barruecopardo.

As announced on 18 February 2015, the Company entered into an exclusivity period with Oaktree, extending to 10 April 2015, in relation to a financing package that would secure the funding requirements for the development of Barruecopardo. On 13 April 2015, the Company announced that very significant progress had been made during the exclusivity period, and that the parties expected to be in a position to finalise agreements shortly. The parties have now finalised project financing arrangements and signed binding agreements, which are conditional on shareholder approval, further detail of which is provided below. Ormonde has been assisted with the arrangement of this financing package by Swedbank Norway and Davy Corporate Finance.

Under the terms of the Financing, Oaktree will, subject to the passing of the Resolution at the EGM, subscribe USD 44.2 million for shares representing a 65% interest in Barruecopardo JV, a newly incorporated and wholly owned subsidiary established by Ormonde for the purposes of the Financing, with an additional 5% interest being part consideration in relation to the provision of the debt facility, with Ormonde Mining plc holding a 30% interest. Barruecopardo JV will hold a 100% interest in both Saloro (the holder of the Barruecopardo Mining Concession and two surrounding Investigation Permits) and Ormonde Geologia (the holder of four Investigation Permits in the vicinity of Barruecopardo) and will be controlled by Oaktree and Ormonde Mining BV (a wholly owned subsidiary of Ormonde Mining Plc.) and managed by Ormonde Mining BV.

Barruecopardo JV will be governed by a shareholders agreement which details a number of important matters requiring the consent of both parties, including matters such as effecting any material change to the business of Barruecopardo JV and transactions to acquire or subscribe for shares in other companies, to establish a new subsidiary, or to effect a merger or consolidation involving Barruecopardo JV, with certain other decisions of the Barruecopardo JV Board being decided by majority vote. These consent matters provide minority protections for Ormonde.

As part of the Financing, Oaktree will provide to Saloro a 5 year USD 55.5 million loan facility, at an overall interest rate of 12% per annum. Once available, funds under the facility can be drawn over a two year period, with a commitment fee of 3% payable on undrawn funds. The loan facility allows the Barruecopardo JV Board flexibility with respect to the allocation of excess funds generated by the business, allowing for such funds to be applied to the repayment of principal, cash distributions to shareholders, or to be retained for the development of the business (e.g. to be applied to the fast track development of an underground mine). A table outlining the use of proceeds from the Financing is provided below:

Ormonde will receive an annual management fee of €1.0 million for services provided to the Barruecopardo Project under a management services agreement. This fee will cover Ormonde's current working capital requirements. The Financing will also provide for the repayment of the USD 1.5 million working capital loan facility provided by Oaktree to Ormonde in February 2015 by means of repayment of an amount outstanding from Saloro to Ormonde.

In addition, the Financing provides USD 3.5 million (€3.2 million) for drilling and related technical studies in relation to the fast track investigation of a Stage 2 underground mine, with the target of extending the initial 9 year mine life and increasing production, and taking advantage of inbuilt spare capacity available at Barruecopardo.

Oaktree and Ormonde have also agreed, should the Financing be approved by Shareholders, to work together to pursue other tungsten opportunities through the establishment of a new joint venture company, in which parties will have the same interests as in Barruecopardo JV.

Almonty Industries

As announced today by the Company, the Company has received a further indicative non-binding proposal from Almonty Industries. At this point in time, no binding intention to announce an offer under Rule 2.5 of the Irish Takeover Rules has been made and there can be no certainty that any such announcement or offer will be made. The Board unanimously recommends shareholders to approve the Oaktree Financing at the forthcoming EGM notwithstanding the Almonty indicative non-binding proposals.

Enquiries to:

Ormonde Mining plc

Kerr Anderson, Managing Director Tel: +353 (0)1 8253570

Capital M Consultants

Simon Rothschild Mob: +44 (0)7703 167065

Murray Consultants

Mark Brennock Tel: +353 (0)1 4980300 Mob: +353 (0)87 2335923

Davy Corporate Finance (Nomad / ESM Adviser, Joint Broker and Financial Adviser to Ormonde)

Eugenée Mulhern / Roland French Tel: +353 (0)1 6796363

SP Angel Corporate Finance LLP(Joint Broker)

Ewan Leggat / Katy Birkin Tel: +44 (0)20 3 470 0470

About Ormonde

Ormonde Mining Plc is admitted to trading on the AIM market in London and the ESM market in Dublin and is a mineral development and exploration company focused on Spain (Ticker: ORM). Ormonde is developing a low cost mining operation at its Barruecopardo tungsten project to become a major, secure European supply of tungsten. Following the completion of a Definitive Feasibility Study in 2012, and the Environmental and Mining Permit being received during 2014, Ormonde is now in the process of completing a financing package for the Project which would enable the commencement of its development during 2015, with production targeted for late 2016. Ormonde also has a number of other exploration projects including tungsten, gold and copper.

About Oaktree

Oaktree is a leading global investment manager specialising in alternative investments with USD 100 billion in assets under management as of 31 March 2015, on behalf of pension funds, insurance companies, institutional investors and sovereign wealth funds, among others. Headquartered in Los Angeles, the firm has over 900 employees and offices in 17 cities worldwide. For additional information, please visit Oaktree's website at www.oaktreecapital.com

The Directors of Ormonde accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the Directors of Ormonde (having taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

Any holder of 1% or more of any class of relevant securities of Ormonde or of Almonty Industries may have disclosure obligations under Rule 8.3 of the Irish Takeover Panel Act, 1997, Takeover Rules 2013. 

No statement in this announcement is intended to be an asset valuation or a profit forecast and profits and earnings per share will not necessarily be changed.

Davy and Davy Corporate Finance each of which are regulated in Ireland by the Central Bank of Ireland, are acting for Ormonde and no one else in relation to the matters referred to herein. In connection with such matters, Davy and Davy Corporate Finance, its affiliates and their respective directors, officers, employees and agents will not regard any other person as their client, nor will they be responsible to anyone other than Ormonde for providing the protections afforded to their clients or for providing advice in connection with the matters described in this announcement or any matter referred to herein.

Defined terms used in this announcement have, save where otherwise stated, the same meaning as set out in the circular to Ormonde shareholders dated 29 April, 2015.

ENDS