25 May 2012

Ormonde poised for mining plan

10/09/2010 Robert Tyerman

Tungsten hopeful Ormonde Mining should shortly have a production plan for its 40,000-tonne Barruecopardo project in Spain's Salamanca province. The AIM-quoted company, which last ugraded its estimated resource in May, is waiting for a plan for optimising open-pit production there from independent consultant Scott Wilson. 

Based in Navan, Co Meath, and steered by managing director Kerr Anderson, Ormonde has the ambition of upgrading the Barruecopardo resource furher and to start producing 8 per cent of the world's tungsten mined outside China by 2012. The company will follow the Scott Wilson report with a bankable feasibility study, for which it expects to need some £2 million.

The tungsten market has traditionally been dominated by China, with unsteadying effects on its price, but Anderson points out China's burgeoning demand for the material, used to strengthen steel, is changing all that. Market watchers expect China to become a net importer before too long, with a significant world supply deficit emerging in three to four years, and Anderson argues the contract price is set to surge from $25,000 to $30,000 a tonne.

Clearly Barruecopardo will need hefty funding to go into production. But, if the project sums stack up, that should be available. Ormonde also has a copper venture with major group Antofagasta at La Zarza in Andalucia.

Floated five years ago at 22p, Ormonde shares now languish at 4p, valuing the company at almost £10 million. If progress can be maintained at Barruecopardo, they could well repay a strong-nerved punt.

Tags: AIM, Commodities, Deals & contracts, Emerging markets

Sector: Mining

Companies: Ormonde Mining

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