23 May 2019
This announcement contains inside information
Ormonde Mining plc
("Ormonde" or "the Company")
The Board of Ormonde ("the Board") provides an update on the Barruecopardo Tungsten Project in Salamanca, Spain ("Barruecopardo" or "the Project"), where the Company holds a 30% interest.
· Process plant commissioning is effectively complete with the plant operating well. Throughput rates up to 190 tonnes per hour ("tph") are now being achieved on fresh ore, sufficient to meet the Project's steady state processing target of 1.1 million tonnes per annum ("Mtpa");
· Processing of low-grade ore feed from the northern starter pit has produced concentrates exceeding 74% WO3 (compared to the industry standard of 65% WO3) and close to targeted specification; operational refinements are now focused on achieving targeted specification in the near term;
· The initial ore feed from the northern starter pit, a small pit representing only the first few months of mine production, has returned lower grade than forecast due to localised complexity within this peripheral remnant zone;
· Plans are therefore being developed to target mining of higher grade ore sources in the near term, including:
o bringing forward mining in the higher grade southern starter pit, where mining has recently commenced; and
o accelerating the waste stripping of the east wall of the historic pit, from surface to around 80 metres depth ("the east wall cutback"), to bring forward access to the main orebody situated below the historic open pit.
Michael Donoghue, Ormonde's Chairman and Interim Managing Director, commented:
"The commissioning of the new process plant at Barruecopardo has essentially been completed, with the plant throughput achieving rates sufficient to meet the Project's steady state processing target of 1.1 million tonnes per annum. The concentrates produced during commissioning are close to targeted specification, so with feed grade being the critical issue the focus on the Project has now turned to developing mining procedures and revised mining schedules to target higher grade, more representative ore sources earlier in the Year-1 ramp-up schedule. This includes accelerating waste stripping to allow access to the main orebody to be brought forward."
Open pit mining currently planned for the Year-1 ramp-up period includes:
· initial ore production from two starter pits situated on the northern and southern fringes of the main ore-zone, respectively, based on more irregular, remnant mineralised zones peripheral to the main orebody and not mined by the previous operation; and
· mining out waste above the east side of the historic pit, to allow access to the main orebody located at an average depth of around 80 metres.
Open pit mining commenced at the northern starter pit, a small pit representing only the first few months of production, situated in an area where the Project's mineral resource model showed the tungsten mineralised zones to spread out from the main orebody in widely spaced and less continuous zones. This localised complexity has resulted in lower mined grades than forecast in the initial ore feed from this pit.
As the main orebody is a broad and more continuous high-grade zone situated below the historic open pit, the mineralisation in the northern starter pit is not representative of the deposit, but is present at surface, making it the most readily available ore for initial mining operations while dewatering and waste stripping of the open pit are carried out.
The following plans are currently being developed to target higher grade ore sources in the near term:
1) bringing forward mining in the southern starter pit, where recent drilling has shown higher grades and mining in this area has recently commenced;
2) accelerating the east wall cutback so that mining of the main orebody can be brought forward in the Year-1 ramp-up schedule; and
3) optimising drill-and-blast and grade control procedures to minimise dilution and optimise feed grades from the starter pits.
Once these plans are finalised, the effect of their implementation on Year 1 cashflows projections will be incorporated into an updated schedule.
Commissioning of the process plant is effectively complete. Plant throughput rates of up to 190 tph are being achieved, sufficient to meet the post ramp-up production target of 1.1 Mtpa. Plant performance has been steadily improving as experience is gained and the operation moves from manual to automated control.
A high concentrate grade of +74% WO3 (tungsten trioxide) has been achieved using low-grade ore feed, compared to the industry standard of 65% WO3. Barruecopardo historically produced a high-grade concentrate, however it is notable that this is currently being achieved from a low-grade ore source in the northern starter pit. As a result of the low feed grade, however, the initial concentrates are reporting slightly outside targeted product specification. It is anticipated that this issue will be resolved in the near term by feeding the plant with material at more representative grades following the mining revisions described above.
The Project is now transitioning into the one-year ramp-up phase of production, during which time access to the southern starter pit and the main orebody will allow processing performance to be further optimised.
Operation of the process plant has been handed over from Fairport Engineering to Saloro, with Saloro already having control of all other minesite facilities.
Ormonde Mining plc
Paul Carroll, Chief Financial Officer
Fraser Gardiner, Chief Operating Officer
Tel: +353 (0)1 8014184
Davy (Nomad, Euronext Growth Advisor and Joint Broker)
John Frain / Barry Murphy
Tel: +353 (0)1 6796363
SP Angel Corporate Finance LLP (Joint Broker)
Tel: +44 (0)20 3 470 0470
Capital M Consultants
Mob: +44 (0)77 03167065
Tel: +353 (0)1 4980300
This announcement includes certain statements that may be deemed "forward-looking statements". Although the Company believes the forward-looking statements are based on reasonable assumptions, such statements should not be in any way construed as guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements.
Risk factors are typical of a mining project during development, commissioning and operation, and include (but are not limited to): the availability and / or delivery of equipment and contractor services to complete mine construction on schedule and on budget; plant performance during and after commissioning; rates of metal recovery in the process plant; mined ore tonnages and grade in comparison to estimated ore reserves; cost overruns and the potential for future additional funding requirements; and tungsten concentrate sales prices.
Barruecopardo is a fully permitted and funded mining project currently being developed through a US$99.7 million funding package agreed with Oaktree Capital Management (70% interest). Ormonde's participation in the Project is held through its 30 per cent minority interest in Barruecopardo Joint Venture BV, a company which is governed by a Shareholder Agreement which provides for certain rights and obligations for each party.
For more information, visit www.ormondemining.com
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