Ormonde Mining plc (LON:ORM) has agreed to sell its 30% stake in Barruecopardo, a tungsten mining project in Spain.
In February, Ormonde held a shareholder vote where the disposal was agreed.
Oaktree Capital, owner of Barruecopardo, will pay €6mln (£5mln) to Ormonde.
Prior to the sale, Mike Donoghue, chairman and interim managing director of the AIM-listed miner, said the mine had encountered significant setbacks during ramp-up operations which had left it seeking further funding.
Ormonde also said that low initial ore grades and delays in accessing the main orebody of the mine had resulted in overall production and related revenues being “substantially lower than the 2012 feasibility study forecasts for the current stage of ramp-up”, necessitating the need for the additional funds.
“Having assessed the options open to Ormonde to address this funding requirement, in light of the performance of the mine to date, the current tungsten market, difficulties or risks in raising capital and the potential consequences for Ormonde were its share of funding not to be provided, the board has determined that a sale of its interest in the Barruecopardo Mine is in the best interests of shareholders”, Donoghue said.
Gold and copper
Ormonde's remaining interests are in gold and copper.
Salamanca and Zamora Gold are held through a joint venture (48%/44% respectively) with Shearwater Group PLC. The area is one of the most prospective gold terrains in Spain, Ormonde believes.
Ormond also holds gold exploration permit applications elsewhere in Spain.
Ormonde is looking to sell La Zarza copper-gold project in the Iberian pyrite belt of southern Spain, having taken an impairment charge of €600,000 for the former working mine in its 2018 figures.
Half-year results to June 2019 showed a loss of €1.18mln, with cash at €312,000.
Inflexion points
- Completion of disposal of La Zarza interests
- New look at the gold exploration opportunities