Ormonde Mining (LON:ORM) reported this morning that a significant resource upgrade at its Barruecopardo tungsten project in western Spain suggests that the project is capable of “substantially larger” annual tungsten production.
The firm said that work on a feasibility study has led to a “a very material increase” in indicated resources and, consequently, a 60-per cent increase in projected annual tungsten production that, in turn, would lead to a substantial revision upwards in cash flow forecasts.
A JORC-compliant interim mineral resource estimate from CSA Global incorporated results to date from the firm’s infill drilling programme, while also reflecting a reduction in the cut-off grade and revised mining strategy from a selective mining method to what Ormonde described as “a more bulk mining approach”. This estimate shows a total resource of 25.3 million tonnes grading at 0.27 per cent tungsten trioxide.
Of this amount, 0.29 per cent tungsten oxide is classified as an indicated resource for a total of 4.83 million metric tonne units (mtus), which compares with just three million mtus in the previous resource estimate.
Another study has identified an optimum plant throughput of 1.1 million tonnes per annum, which yield an average of 230,000mtus of tungsten trioxide per annum over a nine-year period – a substantial increase on the 130,000mtus production rate estimate in a Scott Wilson ‘base case’ study that was reported in September 2010.
Ormonde added that indicated capital costs will be approximately €40 million, which is within the range of previous capital estimates outlined by Scott Wilson.
“We are delighted with the upgrade in mineral resources and the interim results of the feasibility study at Barruecopardo,” said Kerr Anderson, Ormonde’s managing director. “We now move forward with a project which will produce substantially more tungsten than previously envisaged.”