12 September 2018
Ormonde Mining plc
("Ormonde" or "the Company")
Barruecopardo Tungsten Project Update
The Board of Ormonde ("the Board") is pleased to provide an update on the Barruecopardo Tungsten Project in Salamanca, Spain ("Barruecopardo" or "the Project"), where construction is well-advanced and commissioning activities have commenced.
Key progress updates include:
· The Project team achieved a major milestone during August with the commencement of commissioning of the turnkey crush and screen plant, the first trial of waste rock through the primary crusher having been successfully carried out;
· The construction of the rest of the crush and screen circuit is complete, and installation of the associated electrical circuitry is presently in progress and due for completion by the second half of September;
· Initial commissioning of the water treatment plant has also been carried out, and will continue on the imminent completion of the water management system pipework and pump installation to feed water from the old open pit;
· The installation of major equipment and structures at the process plant is also well-advanced;
· Process plant commissioning is now expected to commence at the start of December, a number of weeks later than originally envisaged; plant commissioning is then expected to run through into January 2019, with first production of tungsten concentrates from the beginning of February;
· Projected construction costs remain within the Project's Construction Budget of €53.6 million;
· Recent site photos of the construction activity can be seen on Ormonde's website at the following link http://ormondemining.com/timeline-in-pictures/.
Michael Donoghue, Ormonde's Chairman and Interim Managing Director, commented:
"It is very pleasing to have achieved another major project milestone during the quarter, with the on-target commencement of commissioning of the crush and screen plant and the water treatment plant, taking the Project into its mine commissioning phase. This major advancement accompanied progress on the construction of the process plant where most of the major equipment has been installed and structural works are well advanced.
"The commissioning of the process plant is now due to commence in early December, slightly later than originally planned, with first tungsten expected to be produced from early February 2019, to commence a new secure supply to the global markets."
Ormonde Mining plc Tel: +353 (0)1 8014184
Paul Carroll, Chief Financial Officer
Fraser Gardiner, Chief Operating Officer
Davy (Nomad, ESM Adviser and Joint Broker)
John Frain Tel: +353 (0)1 6796363
SP Angel Corporate Finance LLP (Joint Broker)
Ewan Leggat Tel: +44 (0)20 34700470
Capital M Consultants
Simon Rothschild Mob: +44 (0)77 03167065
Mark Brennock Tel: +353 (0)1 4980300 Mob: +353 (0)87 2335923
The construction of the turnkey crush and screen plant is complete, with only electrical circuitry remaining to be finalised, such that by the second half of September commissioning of the entire crushing circuit will commence.
At the process plant, the installation of major equipment and structural installation are 70 per cent completed: jigs, cyclones, spirals, hydrosizer, shaking tables, mills, concentrate thickeners, concentrate dryer and cooler, tailings dewatering screens, fines thickener and filter press are all fully installed or in position. However, a number of factors including detailed engineering, equipment delivery and contractor scheduling have combined towards the latter stages of the project to delay the completion of some installations such as the preconcentration screen structure, process piping and electrical works, when compared to the original June 2017 construction schedule.
In the meantime, details such as walkways, the process plant control room, external cladding, roofing, and water tanks are well advanced. Other developments in hand include the installation of the water management system pipework, and completion of site services and infrastructure, including the site laboratory, canteen and changing rooms. The underground High Tension ("HT") powerline, the main HT substation and yard, and the Medium Tension electrical ring main have all been installed.
The Project team achieved a major milestone during August with the commencement of initial commissioning of the primary crusher. To-date, several hundred tonnes of waste rock have been successfully fed through the crusher and conveyed to the coarse ore stockpile for use in commissioning the rest of the crush and screen circuit during the second half of September. This will be the focus of the commissioning program while the process plant is being completed.
Initial commissioning of the water treatment plant has been carried out, and will be finalised on the imminent completion of the water management system pipework and pump installation to feed water from the old open pit.
Commissioning of the process plant is now due to commence at the start of December (compared to previous guidance of end-September). The current commissioning plan sees first production of tungsten from the beginning of February 2019.
The Board notes that APT tungsten prices have seen a period of weakness over the last couple of months, with prices reducing from US$352 per metric tonne unit ("mtu") in late June to a current range of US$275-290 per mtu. This correction appears to be attributable to a combination of Chinese APT smelters coming back online following closures related to environmental inspections, and traditional weak trading demand during the summer period. Despite this short-term variability, the Board remains of the view that supply-demand fundamentals will continue to support prices over the medium to long term.
This announcement includes certain statements that may be deemed "forward-looking statements". Although the Company believes the forward-looking statements are based on reasonable assumptions, such statements should not be in any way construed as guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements.
Risk factors are typical of a mining project development and include (but are not limited to): the availability and / or delivery of equipment and contractor services to complete mine construction on schedule and on budget; plant performance during and after commissioning; rates of metal recovery in the process plant; mined ore tonnages and grade in comparison to estimated ore reserves; cost overruns and the potential for future additional funding requirements; and tungsten concentrate sales prices.
Barruecopardo is a fully permitted and funded mining project currently being developed through a US$99.7 million funding package agreed with Oaktree Capital Management (70% interest). Ormonde's participation in the Project is held through its 30 per cent minority interest in Barruecopardo Joint Venture BV, a company which is governed by a Shareholder Agreement between Ormonde and its partner which provides for certain rights and obligations for each party.
For more information, visit www.ormondemining.com
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