TIDMORM
RNS Number : 7863P
Ormonde Mining PLC
05 September 2017
05 September 2017
Ormonde Mining plc
("Ormonde" or "the Company")
Barruecopardo Tungsten Project
Construction Update
The Board of Ormonde is pleased to provide an update on
construction activities at the Barruecopardo Tungsten Project in
Salamanca, Spain ("Barruecopardo" or the "Project").
Following the Company announcing, on 2nd June 2017, that the
Project had moved into an accelerated construction and
implementation phase, the ramp-up of site activities has advanced
rapidly and is on track with the Project schedule, which
anticipates mine commissioning in the third quarter of 2018.
Progress at the Project has been made against a backdrop of
strengthening tungsten demand and rising ammonium paratungstate
("APT") prices.
Key developments include:
-- Priority 1 and Priority 2 equipment at manufacture stage;
Priority 3 equipment order placement underway
-- Construction of workshop, offices and other infrastructure continues
-- Multiple construction contracts awarded, including dams and
civil works, with main dam construction work underway
-- Some 50 persons now working on the Project, including a
majority from Barruecopardo and immediately adjacent towns
-- APT prices continue to perform strongly, with significant
price rises seen over recent months to a current level of
US$285-300/mtu. This represents an increase of 30% on the
prevailing price when the decision was taken to move to accelerated
construction, and an 80% increase from its January 2016 low
Steve Nicol, Ormonde's Managing Director, commented:
"With the very positive decision, taken in early June this year,
to advance the Project into an accelerated construction and
implementation phase, the intervening period has been exceptionally
busy at the Project. The speed and scale of the works progressed
over this period has only been possible as a result of the
meticulous preparation activities performed by the Project team
over the past months.
With the APT price continuing to climb steadily, indications are
that the decision to accelerate construction at the Project has
been a timely and appropriate one, with the stage now set for the
Project to commence commissioning in Q3 2018 against a backdrop of
a much improved tungsten price environment."
About Ormonde
Ormonde has a 30% interest in the Barruecopardo Tungsten
Project, located in northwest Spain. Barruecopardo is a fully
permitted and fully funded mining project currently being developed
through a US$99.7 million funding package agreed with Oaktree
Capital Management (70% interest) in 2015.
A picture gallery illustrating recent site activities can be
viewed at http://ormondemining.com/timeline-in-pictures/
Detail
Construction Activities
With the extensions to the Project timeline announced during
2016, the manufacturing of the ordered Priority 1 and Priority 2
equipment was necessarily deferred. This deferral has now been
lifted and all ordered equipment is now being manufactured. In
addition, new orders have been placed for the remainder of the
outstanding Priority 2 equipment (including spirals, tables, main
plant feed screen, and thickeners, etc), with Priority 3 (low
criticality and/or short lead time) equipment orders also now being
prepared for placement.
The dams' construction contract was recently awarded to Cerezo,
a Spanish company with wide experience in the construction of dams
and other mining infrastructure, including the execution of entire
open pit mining operations for several international mining
companies. Cerezo immediately mobilised to site with construction
works having commenced in early July.
Meanwhile the civils works contract for the construction of all
the foundations required for the Process Plant and associated
infrastructure has been awarded to Copisa, a Spanish company active
in Europe, Africa, Central America and South America. Copisa has
particular experience in the execution of large projects in a wide
range of sectors including infrastructure and industrial works.
Copisa will be mobilising to site in early October.
In the meantime, construction of site facilities (workshops,
welfare, etc) continues with contractors sourced from the local
areas around the mine.
Tungsten Market
APT prices touched a low of US$162 per metric tonne unit ("mtu")
in January 2016, following a period which had seen significant
commodity price reductions associated with a general weakening of
the commodity markets. However, since that time, the tungsten
market has been gradually moving in an upwards direction, assisted
by improvements in economic outlooks in both Europe and the US, and
demand increase in some important markets. On the supply side, an
estimated 4.2% reduction in primary supply from China during 2016
(China produces circa 80% of world primary tungsten supply),
together with more recent supply disruptions to Chinese mine
production, as a result of environmental impositions at certain
Chinese mines, have had a material impact on the APT price.
Currently APT prices are US$285-300/mtu, following an increase
in the rate of price appreciation since early July, shortly after
the Barruecopardo Project partners decided to move the Project into
an accelerated construction and implementation phase. While some
consolidation in the near term may be expected, the outlook remains
positive over the medium and longer term.
Enquiries to:
Ormonde Mining plc
Steve Nicol, Managing Director Tel: +353 (0)1 8014184
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 and Joint Broker)
John Frain Tel: +353 (0)1 679 6363
SP Angel Corporate Finance LLP (Joint Broker)
Ewan Leggat Tel: +44 (0)20 3 470 0470
For more information please visit www.ormondemining.com
This information is provided by RNS
The company news service from the London Stock Exchange
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