Ormonde Mining (LON:ORM) believes the long term outlook for tungsten remains good despite the recent weakness in the metal’s price.
Tungsten has fallen to about US$230mtu from over US$350 a year ago, but Ormonde expects an improvement both on the demand and supply side in the next couple of years.
Demand should follow the economic cycle, strengthening as economic conditions improve worldwide, it said.
Metal analysts predict an upturn in tungsten prices in the next couple of years which is when Ormonde’s new mine at Barruecopardo is scheduled to come on stream, it added.
Ormonde has moved to the development stage at the mine in Spain, having agreed a US$100mln finance package with US investor Oaktree earlier this year.
It sought to combine an acceptable level of debt with sufficient equity to ensure a robust funding package, thus reducing the risk of late stage dilution issues arising, it added.
Oaktree will take a 70% equity stake in return for US99.7mln of funding, of which US$44.2mln was equity.
Mike Donoghue, Ormonde’s chairman, said added to the mining permit issued at the end of 2014, it had been a landmark year that had transformed the group.
“These two major milestones transform Ormonde from an exploration to a mining company, as we now move into the development stage at Barruecopardo."
The loss for the year was €1.63mln, compared with a loss of €1.81mln.