Ormonde Mining has developed Barruecopardo tungsten mine in Spain
Mine is ramping up to full production
Tungsten market predicted to fall into deficit by 2020
Prices tipped to improve as supply reduces
What it owns
When fully operational, Barruecopardo will account for around 13% of non-Chinese global supply of tungsten concentrates.
The new mine development is based on an initial open pit mining operation with a 9-year mine life, producing 260,000 metric tonne units (“mtu”) of tungsten trioxide (WO3) per year, or 2,060 tonnes of tungsten metal, contained in a high-quality concentrate, following a one year ramp up period.
Ormonde holds a 30% interest in the project company, Saloro SLU which is funded through a US$100mln financing package provided by 70% JV partner Oaktree Capital.
Salamanca and Zamora Gold are held through a joint venture (48%/44% respectively) with Shearwater Group PLC.
The area is one of the most prospective gold terrains in Spain, Ormonde believes.
Ormonde took an impairment charge of €600,000 for the former working copper mine of La Zarza in its 2018 figures and is now looking to sell it.
How is it doing
In June, Ormonde said it is expecting to reach higher grade ore at Barruecopardo by the end of the year.
The AIM-listed firm said it also expected to attain steady-state processing operations at the project before the end of 2019.
That would result in a “robust outlook” going forward after the current ramp-up period.
Largely due to the impairments Ormonde reported a loss after tax of €1.65mln in 2018 compared to €100,000 a year earlier.
What the boss says: Michael O’Donoghue, chairman
“The lower grade ore encountered in the initial, peripheral starter pit will make the remainder of this year somewhat challenging as Saloro's profitability and cashflows will continue to be constrained during the mine's ramp-up phase, however the progress made to date on processing of this lower grade material should stand the pProject in good stead
- Latest forecast is for tungsten to be in deficit in 2019 and 2020 as Russian and Chinese sources deplete
- There no plans for China to replace tungsten mins as they run down says Ormonde
- Prices might therefore rise in short to medium term
- Scope to develop “new ideas and opportunities” to add value added Ormonde
- Completion of disposal of La Zarza interests
- New look at the gold exploration opportunities