Ormonde Mining PLC

Published : June 06th, 2012

Hemscott News Alert - Ormonde Mining PLC

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RNS Number : 7329E
Ormonde Mining PLC
06 June 2012
 

???

6 June 2012

 

Ormonde Mining plc

("Ormonde" or "the Company")

 

 

Final Results for the year ended 31 December 2011

 

 

DUBLIN & LONDON: 6 June 2012 - Ormonde Mining plc announces its final results for the year ended 31 December 2011.

 

HIGHLIGHTS

 

?    Barruecopardo Tungsten Project's Definitive Feasibility Study reported in February 2012, confirming the project's technical feasibility and exceptional economics

?    Discussions advanced with several interested parties in relation to off-take arrangements and funding Barruecopardo; successful conclusion to these anticipated over the coming months

?    Early July submission for the final permitting documentation; plant commissioning now scheduled for Q4 2013

?    Tungsten prices remained strong during the year, following significant price increases resulting from global supply constraints

?    Geophysical surveys on new La Zarza permit areas identified several targets, which are being tested by the current drilling programme

?    Documentation to support the transfer of the La Zarza mining rights to Ormonde submitted in December 2011 and application under review by the Provincial administration

?    Very encouraging results from initial drilling on our Joint Venture Gold projects, leading to an expanded drilling programme 

 

Mike Donoghue, Chairman, commented:

 

"A significant milestone was reached over the last year, with the completion of the Definitive Feasibility Study on our Barruecopardo Tungsten Project.  This study demonstrated the technical feasibility and exceptional economics of this world class tungsten asset.  Its completion has enabled us to advance earlier discussions with interested parties in relation to funding the project to a stage whereby we anticipate finalisation of funding arrangements over the coming months."

 

Enquiries to:

 

Ormonde Mining plc

Kerr Anderson, Managing Director  Tel: +353 (0)1 8253570

 

Bankside Consultants

Simon Rothschild  Tel: +44 (0)20 7367 8888   Mob: +44 (0)7703 167065

 

Murray Consultants

Ed Micheau  Tel: +353 (0)1 4980300  Mob: +353 (0)86 803 7155

 

Davy (Nomad / ESM Adviser)

Eugen?e Mulhern / Roland French  Tel: +353 (0)1 6796363

 

Fairfax I.S. PLC (Joint Broker)

Ewan Leggat / Katy Birkin  Tel: +44 (0)207 598 5368



 

 

CHAIRMAN'S REVIEW

 

 

The objectives that your Company set itself at the end of 2010 were: to complete the feasibility study evaluation for our Barruecopardo Tungsten Project and advance its permitting and funding to ensure development; to secure new exploration ground and recommence exploration on La Zarza through the Antofagasta Joint Venture; and to advance the evaluation of our gold licences in the Salamanca and Zamora Provinces.  I am pleased to report that we have made good progress on all of these objectives, and in particular on our flagship Barruecopardo Project.

 

The feasibility study on the Barruecopardo Project in the Salamanca Province was carried out during the year and the results reported in late February 2012. The outcome was very positive, demonstrating a technically viable, initially open pit mining operation which would benefit from low capital costs and low operating costs.  This will result in a project with exceptional economics at prudent tungsten prices, well below both recent and future prices forecast by international metals market research companies. With this milestone achieved, Ormonde is in a position to advance the remaining objectives during 2012, including capital funding and off-take arrangements, permitting and mine development.

 

The feasibility study has facilitated due diligence on the project. This in turn has enabled earlier discussions with several third parties in relation to capital funding and off-take arrangements to be advanced, whereby the Directors are confident of finalising these arrangements over the coming months.

 

The final stage of pre-development, the detailed engineering design work, will be initiated as soon as the current metallurgical testwork is completed. This testwork serves two objectives, firstly to provide larger testwork runs to meet the needs of the process plant manufacturers so that they can supply equipment performance guarantees, and secondly to supply sufficient samples to facilitate agreement with concentrate off-takers.  Completion of this work will allow for the commencement of the detailed engineering stage ahead of mine development.

 

The first stage of permitting, the Documento Inicial, was completed successfully during 2011 and the final permitting documentation, incorporating all responses and guidance provided by the relevant regulatory bodies to the Documento Inicial, is now being readied for submission in early July.  While this planned submission is somewhat behind the schedule previously envisaged, its timing reflects the detailed work in incorporating the proposed mining operation as defined in the feasibility study (along with a comprehensive Environmental Impact Assessment), currently being updated to reflect recent modifications to Spanish legislation applicable to mining operations.  It is this final submission which will be reviewed by all relevant regulatory departments prior to a decision on the granting of a mining concession on Barruecopardo, and therefore ensuring that it fully addresses and anticipates all requirements is essential to facilitate the granting of the mining licence.  As a consequence, the project development schedule has now been extended such that plant commissioning has moved from Q3 to Q4 2013.

 

The external environment for tungsten remains healthy. Uncertainty in the global economy has resulted in a slight easing of APT prices from the US$440-450 per mtu "plateau" during 2011 to an average price of some US$410 during the last few months.  Medium to long term price forecasts remain firm.

 

Two fundamental structural problems appear to have developed in the tungsten industry; firstly the supply-demand imbalance resulting in significant supply shortages, and secondly the reliance on Chinese supplies of intermediate powders such as APT is being brought into sharp focus by the fact that Chinese exports of APT are predicted to reduce and possibly be phased out over the coming years (as previously happened with the supply of Chinese tungsten concentrates).  The withdrawal of Chinese primary concentrates from the market place affected the secondary powder processors and encouraged them to become more involved upstream with primary mine producers.  However, the reduction in Chinese APT supply will directly affect the much larger downstream tungsten tool and steel manufacturers and one is starting to see these manufacturers moving upstream to become involved with primary producers.

 

These supply issues have been highlighted by the EU in its report "Critical Raw Materials for the EU" (May 2010) where tungsten was listed as a "critical raw material" due to its "high economic importance and high relative supply risk" and more recently by the British Geological Survey who have ranked tungsten in the joint highest position in its "Current Supply Risk Index" of metals which are of economic value.

 

At our La Zarza Copper Project, documentation to support the transfer of the mining rights from the underlying holder Nueva Tharsis to our Spanish subsidiary Ormonde Espana SL was compiled and submitted in December 2011. Ormonde is presently liaising with the Mines Department in Huelva as this application is progressed.

 

Four new investigation permits, which cover substantial areas along strike of the La Zarza system, were issued during 2011 and incorporated into the Antofagasta joint venture activities.  An airborne geophysical (electro-magnetic) survey and a ground gravity survey were completed over the permit areas and a significant number of targets identified.  Early in 2012 a drilling programme was initiated over these targets and this programme is expected to conclude in the summer of 2012.  

 

In March 2011, the Company entered into a joint venture with Aurum Mining Plc ("Aurum") to further explore four permit areas held by Ormonde in the Salamanca and Zamora Provinces.  Aurum is spending ?500k to earn a majority position in these permits.  An initial three-hole drilling programme carried out by the Joint Venture during 2011 encountered very encouraging results on the El Facho gold structure in Zamora.  This led on to a larger nine-hole programme to test the extent of the El Facho structure, which was completed in March 2012.  Results from the first holes of this programme support the initial drilling and we await the remaining results.

 

The Company expended a total of ?4,320,818 on its activities during 2011, as detailed in the Accounts.  The Company has reported a loss of ?966,369 for the year which has narrowed from a loss of ?1,088,451 in 2010.  The Company is well-funded for its current activities ahead of capital funding for Barruecopardo having successfully raised ?3.39 million in a placing announced in March 2012.

 

I would like to thank our shareholders, staff and advisers for their continued support during 2011.

 

 

 

Michael J. Donoghue

Chairman

 

6 June 2012

 

 



 

Consolidated Statement of Comprehensive Income

Year ended 31 December 2011

 

 



2011

 


2010



?000's


?000's






Administrative expenses


(982)


(1,061)

Exploration costs written off


-


(32)

OPERATING LOSS


(982)


(1,093)

Interest receivable and similar income


15


6

LOSS FOR THE YEAR BEFORE TAXATION


(967)


(1,087)

Taxation


1


(1)

LOSS FOR THE YEAR


(966)


(1,088)

Minority Interest


-


-

RETAINED LOSS FOR THE YEAR


(966)


(1,088)






EARNINGS PER SHARE





Basic loss per ordinary share


(?0.0030)


(?0.0043)

Diluted loss per ordinary share


(?0.0029)


(?0.0043)

 



 

Consolidated Statement of Financial Position

As at 31 December 2011

 

 



31/12/11


31/12/10

 



?000's


?000's






ASSETS










NON-CURRENT ASSETS





Intangible assets


16,764


12,443

Tangible assets


4


21



16,768


12,464






CURRENT ASSETS





Trade and other receivables


427


150

Cash and cash equivalents


1,990


1,944



2,417


2,094

TOTAL ASSETS


19,185


14,558






EQUITY AND LIABILITIES










EQUITY





Called-up share capital


10,151


9,042

Share premium account


24,174


20,889

Capital conversion reserve fund


29


29

Capital redemption reserve fund


7


7

Share based payment reserve


778


664

Foreign currency translation reserve


1


1

Profit and loss account


(17,313)


(16,347)

Attributable to equity holders


17,827


14,285

Minority interest


-


-



17,827


14,285

NON-CURRENT LIABILITIES





Trade and Other Payables


21


-



-


-

CURRENT LIABILITIES





Trade and Other Payables


1,337


273



1,358


273






Total Liabilities


1,358


273

TOTAL EQUITY AND LIABILITIES


19,185


14,558

 



 

Consolidated Statement of Cash Flows

Year ended 31 December 2011

 

 



2011


2010

 



?000's


?000's






 

CASH FLOWS FROM OPERATING ACTIVITIES










 

Loss for the year before taxation


(967)


(1,087)

 

Adjustments for:





Foreign exchange (loss)/gain


-


-

Depreciation


3


6

 

Exploration costs written off


0


32

 

Movement on share-based payment reserve


114


432

 

Investment revenue recognized in profit or loss


(14)


(6)

 



(864)


(623)

 

MOVEMENT IN WORKING CAPITAL





 

(Increase) in debtors


(277)


(41)

 

Increase /(Decrease)in creditors


1,084


(501)

Income taxes paid


1


(1)

NET CASH (USED IN) OPERATING ACTIVITIES


(56)


(1,166)






 

CASH FLOWS FROM FINANCING ACTIVITIES





 

Proceeds of issue of share capital


4,394


3,468

 






 

CASH FLOWS FROM INVESTING ACTIVITIES





 

Expenditure on exploration activities


(4,321)


(842)

 

Movement in property, plant and equipment


15


(19)

Interest received


14


5

 






 

NET CASH (USED IN) INVESTING ACTIVITIES


(4,292)


(856)

 






 

NET INCREASE /(DECREASE) IN CASH AND CASH EQUIVALENTS


46


1,446

 

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR


1,944


498

 

CASH AND CASH EQUIVALENTS AT END OF YEAR


1,990


1,944

 



 

Consolidated Statement of Changes in Equity

Year ended 31 December 2011

 

 




Share







Based





Share

Share

Payment

Other

Retained


Capital

Premium

Reserve

Reserves

Losses

Total









?000's

?000's

?000's

?000's

?000's

?000's








Balance at 1 January 2010

7,447

19,016

232

37

(15,258)

11,474

Loss for the year

-

-

-

-

(1,089)

(1,089)

Recognition of share based payments

-

-

432

-

-

432

Proceeds of share issue

1,595

1,873

-

-

-

3,468

Balance at 31 December 2010

9,042

20,889

664

37

(16,347)

14,285








Balance at 1 January 2011

9,042

20,889

664

37

(16,347)

14,285

Loss for the year

-

-

-

-

(966)

(966)

Recognition of share based payments

-

-

114

-

-

114

Proceeds of share issue

1,109

3,285

-

-

-

4,394

Balance at 31 December 2011

10,151

24,174

778

37

(17,313)

17,827

 

 

 

1.   The basic loss per share and the diluted loss per share have been calculated on a loss after taxation of ?966,369 (2010: loss of ?1,088,451) and a weighted average number of Ordinary Shares in issue for the year of 324,000,975 (2010: 250,388,186) for the basic loss per share and 325,921,230 (2010: 253,686,797) for the diluted loss per share.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Ormonde Mining PLC

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CODE : ORM.L
ISIN : IE0006627891
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Ormonde Mining is a zinc and lead exploration company based in Ireland.

Ormonde Mining develops zinc, lead, copper, gold, silver and tungsten in Spain, and holds various exploration projects in Spain.

Its main assets in development are LA ZARZA and BARRUECOPARDO in Spain and its main exploration property is SALAMANCA & ZAMORA in Spain.

Ormonde Mining is listed in United Kingdom. Its market capitalisation is GBX 359.1 millions as of today (US$ 429.6 millions, € 376.3 millions).

Its stock quote reached its highest recent level on September 10, 2004 at GBX 9.97, and its lowest recent point on March 13, 2020 at GBX 0.42.

Ormonde Mining has 472 507 482 shares outstanding.

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