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Ormonde Mining PLC - Half Yearly Report

RNS Number : 7900S
Ormonde Mining PLC
29 September 2014
 

29 September 2014

 

Ormonde Mining plc

("Ormonde" or "the Company")

 

 

Interim Results for the Six Months Ended 30 June 2014

 

Ormonde Mining plc, the development and exploration company operating in Spain, is pleased to announce its unaudited interim results for the six months ended 30 June 2014.

 

 

Highlights:

 

Barruecopardo 

 

·     All environmental approvals received: Mining Concession currently awaited

 

·     Basic Engineering completed and shortlist of companies to undertake construction activities prepared

 

·     Ongoing progress on debt funding arrangements

 

·     Continued resilience of the tungsten price in a time of constrained global GDP growth and positive outlook for the coming years.

 

 

Michael Donoghue, Chairman of Ormonde, commented,

 

"We have made very significant progress at our Barruecopardo Project during the first half of 2014, including the receipt of the Environmental Permit, the engagement of Swedbank as debt advisors in relation to the financing package for the Project and the agreement of a five year offtake contract, with Noble Group, for the tungsten concentrate to be produced.  We look forward to the issuing of the Mining Concession."

 

 

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 (Nomad / ESM Adviser)

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

 

SP Angel Corporate Finance LLP(Joint Broker)

Ewan Leggat / Katy Birkin  Tel: +44 (0)20 3463 2260

 



 

CHAIRMAN'S STATEMENT

 

 

During the first half of 2014 your Company was engaged in furthering the permitting process for the development of its Barruecopardo Tungsten Mine in Salamanca Province, Spain and, in parallel has been advancing other key matters required to facilitate its development.

 

January 2014 saw the termination of an offer period with the withdrawal of an unsolicited and unwelcome approach by another tungsten company. While this matter did not impact upon the critical path permitting process, it did somewhat curtail certain parallel activity including funding, engineering design and concentrate marketing, and it was good to be in a position to fully resume such activities once the deadline by which a formal offer must have been made had expired.

 

Around this time an important milestone in the permitting process was also achieved. In February, the Company's wholly-owned Spanish subsidiary, Saloro, received notification of the granting of the Environmental Impact Declaration ("EID") for the Barruecopardo Project. This EID is in effect the environmental permit for the Project, and is required for the Regional Mines Department to be able to issue the Mining Concession to Saloro.  Subsequent to this, Saloro was advised that a legal review of the status of the historic mining concessions in the Barruecopardo area was to be completed by the Regional Authorities as part of a process to ensure that the new mining concession is valid in all respects.  As the initial step in this permit review had not received responses from all contacted parties, the Legal Department deemed that this step should be repeated, which resulted in an unexpected delay as announced by the Company in July 2014.  However, Ormonde now understands that the review has been completed, which should ensure the granting of the Mining Concession is imminent.  Further announcements will be made in relation to the Mining Concession without delay following developments.

 

Progress was maintained in other areas, including advancing the selection process of the engineering company required to execute the various stages of the Barruecopardo plant and infrastructure design. This resulted in Ormonde awarding the Engineering Design Contract to UK-based Fairport Engineering Limited. Fairport is an experienced UK-based engineering firm involved in the aggregates, industrial minerals and minerals processing industries from engineering design to turnkey project delivery within the UK and continental Europe.  To date, key and substantive progress has been achieved including completion of the Basic Engineering stage.  Process Flow Sheet development has been completed and vendor discussions about equipment have been carried out in order to facilitate the efficient placement of the critical path equipment orders once project financing has been completed.  Positive and constructive pre-qualification discussions have also now been undertaken with selected Spanish sub-contractors allowing preparation of a shortlist of companies to undertake the construction activities.

 

On the product marketing side, during the first half of 2014 Ormonde decided to put in place a product offtake contract as an appropriate step to facilitate the capital funding arrangements being pursued. In March, Saloro entered into a binding offtake agreement for tungsten concentrate production from Barruecopardo with Noble Resources International Pte. Ltd a wholly-owned subsidiary of Noble Group Limited, a global market-leading commodities supply-chain manager of energy products, metals, minerals & ores and agricultural products with total revenues of US$98 billion in 2013. Under the terms of this Agreement, Noble will purchase 100% of the tungsten concentrate produced from the Barruecopardo open pit mine during its initial five years of operation.

 

On the important subject of capital funding, Ormonde engaged Swedbank Norway as advisors in relation to a proposed senior bond financing as part of the overall financing package for the development of Barruecopardo. Notwithstanding the ongoing difficult backdrop for mining financing initiatives, the Company has made significant progress towards an eventual outcome on debt financing. Ormonde intends to finance the balance of the Barruecopardo project costs through equity, whether by way of joint venture or otherwise.

 

In the first half of the year, APT prices traded between around $360 and $375 per metric tonne unit, and is currently trading at $355. The continued resilience of the tungsten price relative to many metals in a time of constrained global GDP growth is most encouraging.  The outlook for the coming years is also positive, based upon continued strong growth in demand and limited new supply, with Tungsten Market Research forecasting a base case APT price over the five year period to 2018 ranging between US$420-510 per mtu and averaging US$478 per mtu.

 

Only limited work was carried out on our gold properties in Spain, held through a joint venture with Aurum Mining plc. This work principally involved compilation and refinement of the database on the main targets identified to date through drilling, such as that at Peralonso, where previous limited, shallow holes, returned encouraging gold intersections.

 

 

Financials

 

Ormonde incurred an operating loss for the period of €1,116k (€943k for the 6 months to 30 June 2013).

 

In April, the Company raised £2 million (before expenses) through a placement to fund its activities relating to Barruecopardo and for working capital purposes.

 

In conclusion, I would like to thank shareholders for their support during the period. I look forward to the completion of the permitting process and thereafter to finalising arrangements for the capital funding of our Barruecopardo Project.

 

 

 

Michael J. Donoghue

Chairman

 

26 September 2014

 

 



 

Ormonde Mining PLC

Consolidated Statement of Comprehensive Income

Six months ended 30 June 2014

 

 

unaudited

unaudited

audited

 

6 Months ended

6 Months ended

Year ended

 

30-Jun-14

30-Jun-13

31-Dec-13

 

€000s

€000s

€000s

 

 

 

 

 

 

 

 

Turnover

0

0

0

 

 

 

 

Administration expenses

(995)

(805)

(1,397)

Exploration costs expensed

(122)

(143)

(418)

Finance income

1

5

7

 

______

______

______

Loss for the period before tax

(1,116)

(943)

(1,808)

 

 

 

 

Taxation

0

0

(1)

 

______

______

______

Loss for the Period

(1,116)

(943)

(1,809)

 

 

 

 

Loss per share




Basic loss per share (in cent)

(0.25)

(0.24)

(0.45)

Diluted loss per share (in cent)

(0.25)

(0.24)

(0.44)

 



Ormonde Mining PLC

Consolidated Statement of Financial Position

As at 30 June 2014

 


unaudited

unaudited

audited


30-Jun-14

30-Jun-13

31-Dec-13


€000s

€000s

€000s

Assets








Non current assets




Intangible assets

18,004

16,843

17,127

Property, plant & equipment

2

2

1


_______

_______

_______

Total non current assets

18,006

16,845

17,128





Current assets




Trade & other receivables

454

449

394

Cash & cash equivalents

1,557

881

1,050


_______

_______

_______

Total current assets

2,011

1,330

1,444


_______

_______

_______

Total assets

20,017

18,175

18,572


_______

_______

_______

Equity & liabilities








Equity




Issued share capital

13,446

11,636

12,197

Share premium account

29,896

28,192

28,837

Share based payment reserve

837

777

837

Capital conversion reserve fund

29

29

29

Capital redemption reserve fund

7

7

7

Foreign currency translation reserve

1

1

1

Retained losses

(24,722)

(22,743)

(23,608)


_______

_______

_______

Total equity - attributable to the owners of the Company

19,494

17,899

18,300





Non-current liabilities




Trade & other payables

0

0

0





Current liabilities




Trade & other payables

523

275

272


_______

_______

_______

Total liabilities

523

275

272


_______

_______

_______

Total equity & liabilities

20,017

18,175

18,572


_______

_______

_______

 



Ormonde Mining PLC

Consolidated Statement of Cashflows

Six months ended 30 June 2014

 


unaudited

unaudited

audited


6 months ended

6 months ended

Year ended


30-Jun-14

30-Jun-13

31-Dec-13


€000s

€000s

€000s





Cashflows from operating activities








Net loss for period before tax

(1,116)

(943)

(1,808)





Adjustments for:




Depreciation

1

1

2

Exploration costs written off

0

143

418

Movement on Share-based payment reserve

0

(1)

60

Investment income recognised in P&L

0

0

(7)


________

________

________


(1,115)

(800)

(1,335)

Movement in Working Capital




(Increase)/decrease in receivables

(60)

110

165

Increase/(decrease) in liabilities

251

(131)

(136)


________

________

________

Net Cash (used in) operations

(924)

(821)

(1,306)





Cashflows from financing activities




Proceeds from issue of share capital

2,309

(0)

1,206





Investing activities




Movement in plant & equipment

(1)

(1)

0

Expenditure on intangible assets

(877)

(580)

(1,138)

Interest received

0

1

7

Taxation

0

0

(1)


________

________

________

Net cash used in investing activities

(878)

(580)

(1,132)


________

________

________

Net increase in cash and cash equivalents

507

(1,401)

(1,232)





Cash and cash equivalents at beginning of period

1,050

2,282

2,282


______

______

______

Cash and cash equivalents at end of period

1,557

881

1,050

 


Ormonde Mining PLC

Consolidated Statement of Changes in Equity

Six months ended 30 June 2014

 




Share based payment reserve











Share Capital

Share Premium

Other Reserves

Retained Losses

Total


€000s

€000s

€000s

€000s

€000s

€000s








At 31 December 2012

11,636

28,192

777

37

(21,799)

18,843








Proceeds of share issue

-

-

-

-

-

0

Loss for the period

-

-

-

-

(943)

(943)


______

______

______

______

______

______

At 30 June 2013

11,636

28,192

777

37

(22,742)

17,900








Proceeds of share issue

561

645

-

-

-

1,206

Recognition of share based payments

-

-

60

-

-

60

Loss for the period

-

-

-

-

(866)

(866)


______

______

______

______

______

______

At 31 December 2013

12,197

28,837

837

37

(23,608)

18,300








Proceeds of share issue

1,249

1,059

-

-

-

2,308

Loss for the period

-

-

-

-

(1,116)

(1,116)


______

______

______

______

______

______

At 30 June 2014

13,446

29,896

837

37

(24,724)

19,492


______

______

______

______

______

______

 

 

 



 

Notes to the Interim Financial Statements

 

 

1.    Accounting policies and basis of preparation

 

Ormonde Mining plc is a company domiciled in the Republic of Ireland. The Consolidated Interim Financial Statements ("the Interim Financial Statements") of the Company, as at and for the six months ended 30 June 2014, comprise the Company and its subsidiaries (together referred to as the "Group").

 

The Interim Financial Statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. The Interim Financial Statements have been prepared applying the accounting policies that were applied in the preparation of the Company's published consolidated financial statements for the year ended 31 December 2013. There are no new standards, amendments to standards or interpretations which are mandatory for the first time for financial periods commencing on 1 January 2014 which have a significant impact on the Group's accounting policies or on the reported results.

 

The comparative information provided in the Interim Financial Statements relating to the year ended 31 December 2013 does not comprise statutory financial statements. Those statutory financial statements on which the Company's auditors gave an unqualified audit opinion, have been delivered to the Registrar of Companies.

 

The Interim Financial Statements do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2013, which are available on the Company's website, www.ormondemining.com. The Interim Financial Statements for the six months ended 30 June 2014 are unaudited but have been reviewed by our auditors.

 

The Directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, being a period of not less than 12 months from the date of these Interim Financial Statements. Accordingly, they continue to adopt the going concern basis in preparing the financial information.

 

The Interim Financial Statements were approved by the Board of Directors on 26 September 2014.

 

 

2.    Segmental analysis

 

The Group is engaged in one business segment only, development of mineral resource projects. Therefore only an analysis by geographical segment has been presented. The Group has geographic segments in Ireland and Spain.

 

The segment results for the period ended 30th June 2014 are as follows:

 

 


Ireland

Spain

Loss for 6 months to 30 June 14

€000s

€000s




Segment loss for period

0

(1,116)


______

______


0

(1,116)


______

______



 

Notes to the Interim Financial Statements (continued)

 

 

3.    Loss per share

 

The basic and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:

 

Loss per share

30-Jun-14

30-Jun-13

31-Dec-13


€000s

€000s

€000s





Loss for period

(1,116)

(943)

(1,809)





Weighted average number of ordinary shares




for the purpose of basic earnings per share

442,324,992

398,494,402

404,950,441


______

______

______

Basic loss per ordinary shares (in cent)

(0.25)

(0.24)

(0.45)


______

______

______

 

 

Diluted earnings per share

 

The weighted average number of ordinary shares used in the calculation of diluted earnings per share are as follows:

 

Loss per share

30-Jun-14

30-Jun-13

31-Dec-13


€000s

€000s

€000s





Loss for period

(1,116)

(943)

(1,809)





Weighted average number of ordinary shares




for the purpose of basic earnings per share

442,324,992

398,494,402

404,950,441





Shares deemed to be issued for no consideration




in respect of Employee Options

1,559,322

1,470,175

1,755,101





Weighted average number of ordinary shares




for the purpose of diluted earnings per share

443,884,314

399,964,577

406,705,542


______

______

______

Diluted loss per ordinary shares (in cent)

(0.25)

(0.24)

(0.44)

 

 

4.   Intangible assets - Exploration costs

 


Exploration



& Evaluation

Total


Assets



€000s

€000s

Cost



At 1 January 2014

17,127

17,127

Additions

877

877

Write off

0

0


______

______

At 30 June 2014

18,004

18,004



 

Notes to the Interim Financial Statements (continued)

 

 

5.   Property, plant and equipment

 


Fixtures

Computer

Motor

Total


& Fittings

Equipment

Vehicles



€000s

€000s

€000s

€000s

Cost





At 1 January 2014

26

46

18

90

Additions

0

2

0

2

Disposals

0

0

0

0


______

______

______

______

At 30 June 2014

26

48

18

92


______

______

______

______






Accumulated Depreciation & Impairment





At 1 January 2014

(25)

(46)

(18)

(89)

Depreciation expense

0

(1)

0

(1)

Disposals

0

0

0

0


______

______

______

______

At 30 June 2014

(25)

(47)

(18)

(90)


______

______

______

______






Net Book Value at 1 January 2014

1

0

(0)

1


______

______

______

______

Net Book Value at 30 June 2014

1

1

(0)

2


______

______

______

______

 

 

6.   Share Capital

 

Share Capital

30-Jun-14

30-Jun-13

31-Dec-13


€000s

€000s

€000s





Authorised Equity




550,000,000 ordinary shares of 2.5c each

13,750

11,250

13,750

100,000,000 deferred shares of 3.809214c each

3,809

3,809

3,809


______

______

______


17,559

15,059

17,559


______

______

______





Issued Capital




Share Capital

13,446

11,636

12,197

Share Premium

29,896

28,192

28,837


______

______

______


43,342

39,828

41,034


______

______

______

 



 

Notes to the Interim Financial Statements (continued)

 

 

7.   Post Balance Sheet Event

 

There were no post Balance Sheet Events.

 

The financial information has been prepared under International Financial Reporting Standards using accounting policies consistent with those in the last Annual Report.

 

No dividends were paid or proposed in respect of the six months ended 30 June 2014.

 



 

Independent Review Report to Ormonde Mining PLC

 

 

Introduction

We have been engaged by the Company to review the Consolidated Interim Financial Statements ("the Interim Financial Statements") of the Company as at and for the six months ended 30 June 2014 comprising the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Statement of Cashflows and the related explanatory notes. We have read other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the Interim Financial Statements.

 

This report is made solely to the Company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report or for the conclusions we have reached.

 

 

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the EU. The Directors are responsible for ensuring that the set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

 

 

Our responsibility

Our responsibility is to express to the Company a conclusion on the Interim Financial Statements in the half-yearly financial report based on our review.

 

 

Scope of review

We conducted our review in accordance with International Standard on Review Engagement (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the entity", issued by the Auditing Practices Board. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the Interim Financial Statementsin the half-yearly report for the six months ended 30 June 2014 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU.

 

 

 

Fergal McGrath

 

For and on behalf of

LHM Casey McGrath

Chartered Certified Accountants, Statutory Audit Firm

26 September 2014

 

6 Northbrook Road

Dublin 6

 

 

ENDS


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