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Construction at Ormonde Mining's Barruecopardo project is continuing on time and on budget
Barruecopardo Tungsten Project Update
14 December 2018
Ormonde Mining plc
("Ormonde" or "the Company")
Barruecopardo Tungsten Project: Construction and Commissioning Update
The Board of Ormonde ("the Board") is pleased to provide an update on the construction and commissioning of the Barruecopardo Tungsten Project in Salamanca, Spain ("Barruecopardo" or "the Project"), where the Company holds a 30% interest.
The development schedule has progressed in line with previous guidance of first production of tungsten concentrates from the beginning of February 2019. Key progress includes:
· Crush and Screen Plant commissioning nearing completion;
· Process Plant:
o Installation of equipment and supporting structures almost complete;
o Pipework and low voltage electrical installations very advanced;
o Commissioning of some circuits has commenced.
· Water Management System:
o Water treatment plant commissioning complete;
o Dewatering of the historic pit is ongoing with over 100,000 cubic metres pumped from the pit to the water dams (approximately 10% of the historic pit water content).
· Open pit mining contract awarded and mobilisation of mining equipment underway;
· Key operations staff recruited, and first tranche of plant operators recruited and in training;
· 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:
"With substantial progress made on construction activities during the quarter, the Project has now entered a transition period as construction activities begin to wind down and mine commissioning activities ramp up significantly. It is particularly pleasing to have recently completed the recruitment of the first wave of plant operators, and to see the commencement of process plant commissioning.
"I would like to praise the hard work and professionalism of the site team and contractors as they continue to progress the Project through this busy commissioning period. The Project schedule remains in line with previous guidance, with the production of first tungsten concentrates targeted for early February 2019."
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
Construction and Commissioning:
Significant advancements have been seen in both construction and commissioning during the quarter. Construction of the turnkey crush and screen plant was completed in September, with "cold" commissioning completed during October and "hot" commissioning currently ongoing.
At the process plant, recruitment and training of plant operators together with significant advancements in plant construction have allowed the commencement of process plant commissioning, in line with previous guidance.
Water treatment plant commissioning has been completed and the plant has been handed over to the site team. Dewatering of the historic open pit is in progress (pit dewatering is not required to be completed for a number of months), with 100,750 cubic metres of the historic pit waters (approximately 10% of the total contained historic pit waters) pumped out for treatment and use in the process plant. At the end of November, around 185,000 cubic metres of water was held within the water dams.
In addition, mains power has been connected and the site laboratory is operational. Training of key personnel in the process plant has been ongoing, and the first tranche of the main plant workforce recruitment has completed, with around 20 plant operators and maintenance personnel already employed. With construction teams winding down and operating teams being ramped up during this transition phase, total people on site currently number 180, with 39 of these being from the local area.
The current commissioning plan sees first production of tungsten from early February 2019, in line with existing guidance.
The open pit mining contract has been awarded to one of the largest open pit mining contractors in Spain, with worldwide operations. Mobilisation of their mining equipment to site is ongoing.
The Board notes that APT tungsten prices have been flat over the period since September, with a current range of US$275-290 per metric tonne unit. Thin trading on the one hand and tight supply on the other appear to be keeping the market in its current range, while it seeks direction against broader financial and commodity market uncertainties. The Board remains of the view that supply-demand fundamentals will continue to support prices over the medium to long term as Barruecopardo enters production.
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 during development, commissioning and operation, 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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