RNS Number : 5129C
Ormonde Mining PLC
17 April 2013
17 April 2013
Ormonde Mining plc
("Ormonde" or "the Company")
Final Results for the year ended 31 December 2012
DUBLIN & LONDON: 17 April 2013 - Ormonde Mining plc announces its final results for the year ended 31 December 2012.
HIGHLIGHTS
· Barruecopardo Tungsten Project's Definitive Feasibility Study reported in February 2012 demonstrating the Project's technical feasibility and exceptional economics
· Final permitting documentation for the Barruecopardo Tungsten Project submitted to the Provincial and Regional Governments in late July 2012
· Regional Department of Mines in Salamanca advised that documentation conforms to requirements following review of all information presented
· Formal Public Consultation process completed in February 2013, with only a single public submission received and fully responded to
· Discussions and negotiations progressed on capital funding; with banks in relation to debt facilities and with joint venture parties in relation to funding of equity or "non-debt" component
· Drilling on gold projects continues to deliver positive results indicating deposit scale potential and emerging opportunities at both Salamanca and Zamora
· Agreement signed with a third party which may lead to a divestment of the La Zarza asset for a cash consideration of €5 million, following Antofagasta Minerals SA's decision to withdraw from the option agreement
Mike Donoghue, Chairman, commented:
"It has been a year of steady progress for Ormonde Mining across a number of fronts in our operations in Spain. Plans for the development of our flagship Tungsten Project in Barruecopardo, one of the largest of its kind in Europe, have entered a key phase as we aim to deliver a low cost mining operation capable of guaranteeing a secure and strategic supply of this valuable metal. By adopting a careful and considered approach to permitting and financing of the project, we believe we are putting in place the essential building blocks that will enable the Company to deliver rewards for many years to come and we look forward to updating shareholders on further progress in due course."
Enquiries to:
Ormonde Mining plc
Kerr Anderson, Managing Director Tel: +353 (0)1 8253570
Bankside Consultants
Simon Rothschild Tel: +44 (0)20 7367 8888 Mob: +44 (0)7703 167065
Murray Consultants
Ed Micheau Tel: +353 (0)1 4980300 Mob: +353 (0)86 803 7155
Davy (Nomad / ESM Adviser)
Eugenée Mulhern / Roland French Tel: +353 (0)1 6796363
CHAIRMAN'S REVIEW
Barruecopardo Project
During 2012, our flagship Barruecopardo Project progressed through the completion of the definitive feasibility study and into the second and final stage of the permitting process. With the application for a mining concession filed with the provincial authorities, and the supporting mining and environmental documentation submitted, this in turn facilitated focus on the capital funding exercise later in 2012. Completion of the permitting and finalisation of the capital funding remain two overriding matters required to allow us to proceed to the mine development stage and lead us on to subsequent production and cashflow.
The Definitive Feasibility Study reported in February 2012, based upon an averaged 227,000 metric tonne units of tungsten trioxide (WO3) production per year from a nine year open pit operation, confirmed both the technical viability and very strong economics of this major tungsten project, delivering a pre-tax NPV (8% discount rate) of €120M, averaged annual pre-tax net operating cash flows of €29M and an IRR of 52.0% at an APT price of US$350/mtu.
Following the submission of permitting documentation to the Provincial and Regional Governments at the end of July 2012 by Ormonde's wholly-owned subsidiary Saloro SLU, an initial review was performed by the Regional Department of Mines in Salamanca during Q4 2012 and Q1 of 2013, following which Saloro was advised that the documentation conformed to requirements. In addition, a formal Public Consultation process was completed in February 2013. This process resulted in the receipt by the Company of only one public submission, which is indicative of the general level of acceptance and support for the Barruecopardo Project within the Salamanca Province. In the lead up to this formal public consultation, we held a series of public and private presentations and meetings with a range of community groups and competent authorities about all aspects of the Project as part of our strategy of providing on-going open discussions with all interested parties. It was most reassuring to note the high level of support for our proposals. The permit approval process appears to be progressing smoothly and we are pleased with the process and feedback to date. Land acquisition agreements are proceeding steadily on a lease with option to purchase basis.
While permitting progresses, we anticipate that the capital funding package will be agreed in parallel within a similar time period. In this regard, discussions with a range of banks in relation to debt facilities for the Project and with joint venture parties in relation to funding of the equity or "non-debt" component have advanced and we will update shareholders on a development schedule as soon as these next steps in the process are in place.
The tungsten price (European APT) traded between around US$340 and US$435 for most of the year despite the prevailing poor economic environment globally. The European APT price did briefly slip down to around US$300 at the end of 2012. However, this did seem anomalous relative to the much stronger Chinese APT price, and the European price has now rebounded and stabilised around US$350. We believe the outlook for tungsten remains firm.
La Zarza Project
In Andalucía, Antofagasta completed an eight-hole reconnaissance drilling programme on four new investigation permits covering the westwards strike extension of the La Zarza system. While this widely spaced exploratory programme did reveal the presence of favourable geology conducive to La Zarza style mineralisation, it did not appear to suggest the potential to host a copper deposit of sufficient scale likely to meet Antofagasta's mine development criteria and Antofagasta withdrew from the joint venture in November.
Following these developments, other parties have shown interest in evaluating the potential at La Zarza. Consequently, in February 2013, Ormonde entered into an option agreement with its former underlying joint venture partner on the main La Zarza concessions, whereby we may divest of our interest in La Zarza for a total consideration of €5 million. We await the outcome of this option which is subject to the successful completion of due diligence by 15 May 2013.
Gold Projects
Elsewhere in Spain, we have been active in advancing our gold opportunities during 2012 in conjunction with our joint venture partner Aurum Mining Plc. This exploration activity is reaping very encouraging results and the potential remains high. The Joint Venture carried out further drilling on our Pino de Oro ground in Zamora Province, 80km north of Barruecopardo, in the first half of 2012 and defined an initial (non JORC compliant) resource of some 120-140k ounces on the El Facho Prospect. There are a considerable number of well-defined, but largely untested, targets in this area and it remains very prospective, possibly more for several adjacent deposits than for a single larger deposit.
Some 40km to the east of Barruecopardo, drilling of the first exploration target on the Peralonso Prospect encountered near-surface economic grades and widths of gold mineralisation and this, in conjunction with prospecting carried out in the area, suggests that the structures identified to date at Peralonso may have significant scale.
On the Cabeza de Caballo Prospect, located 10km north of Barruecopardo, exploration to date has been limited to trenching, which has exposed wide intervals of economic grade gold mineralisation within a large vein system. Exploration drilling is now commencing at Cabeza, to test the main structure identified by soil geochemistry and trenching, over a strike length of some 600-700m.
Financial Review
The Company has reported a loss of €4.48 million for the year, an increase from a loss of €966k in 2011, principally due to a €3.34 million impairment made to the La Zarza Project asset, to reflect the value placed on that asset in the option agreement signed in February 2013, which may result in its disposal. The Company raised a total of £4.79 million in two placings announced in March and December 2012.
Although the financial and equity markets remain challenging, we are focussed on maintaining the momentum developed at Barruecopardo on both a local and corporate level, and I would like to thank our shareholders, staff and advisers for their continued support and commitment during 2012.
Michael J. Donoghue
Chairman
16 April 2013
Consolidated Statement of Comprehensive Income
Year ended 31 December 2012
2012
2011
€000's
€000's
Administrative expenses
(1,169)
(982)
Exploration costs written off
(3,335)
-
OPERATING LOSS
(4,504)
(982)
Interest receivable and similar income
23
15
LOSS FOR THE YEAR BEFORE TAXATION
(4,481)
(967)
Taxation
(5)
1
LOSS FOR THE YEAR
(4,486)
(966)
Minority Interest
-
-
RETAINED LOSS FOR THE YEAR
(4,486)
(966)
EARNINGS PER SHARE
Basic loss per ordinary share
(€0.0122)
(€0.0030)
Diluted loss per ordinary share
(€0.0121)
(€0.0029)
Consolidated Statement of Financial Position
As at 31 December 2012
31/12/12
31/12/11
€000's
€000's
ASSETS
NON-CURRENT ASSETS
Intangible assets
16,406
16,764
Property, plant and equipment
3
4
16,409
16,768
CURRENT ASSETS
Trade and other receivables
559
427
Cash and cash equivalents
2,282
1,990
Total Current Assets
2,841
2,417
TOTAL ASSETS
19,250
19,185
EQUITY AND LIABILITIES
EQUITY
Issued share capital
11,636
10,151
Share premium account
28,192
24,175
Capital conversion reserve fund
29
29
Capital redemption reserve fund
7
7
Share based payment reserve
777
777
Foreign currency translation reserve
1
1
Retained loss
(21,799)
(17,313)
Equity attributable to Owners of the Company
18,843
17,827
CURRENT LIABILITIES
Trade and Other Payables
407
1,358
Total Current Liabilities
407
1,358
Total Liabilities
407
1,358
TOTAL EQUITY AND LIABILITIES
19,250
19,185
Consolidated Statement of Cash Flows
Year ended 31 December 2012
2012
2011
€000's
€000's
CASHFLOWS FROM OPERATING ACTIVITIES
Loss for the year before taxation
(4,481)
(967)
Adjustments for:
Depreciation
2
3
Exploration costs written off
3,335
0
Movement on share-based payment reserve
-
114
Investment revenue recognized in profit or loss
(23)
(15)
(1,167)
(865)
MOVEMENT IN WORKING CAPITAL
(Increase) in debtors
(132)
(277)
Increase /(Decrease)in creditors
(951)
1,087
Income taxes paid
-
(1)
NET CASH (USED IN) OPERATING ACTIVITIES
(2,250)
(56)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds of issue of share capital
5,503
4,394
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditure on exploration activities
(2,977)
(4,321)
Movement in property, plant and equipment
(2)
14
Interest received
23
15
Taxation
(5)
-
NET CASH (USED IN) INVESTING ACTIVITIES
(2,961)
(4,292)
NET INCREASE /(DECREASE) IN CASH AND CASH EQUIVALENTS
292
46
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
1,990
1,944
CASH AND CASH EQUIVALENTS AT END OF YEAR
2,282
1,990
Consolidated Statement of Changes in Equity
Year ended 31 December 2012
Share
Based
Share
Share
Payment
Other s
Retained s
s
Capital
Premium
Reserve
Reserves
Losses
Total
€000's
€000's
€000's
€000's
€000's
€000's
Balance at 1 January 2011
9,042
20,890
663
37
(16,347)
14,285
Loss for the year
-
-
-
-
(966)
(966)
Recognition of share based payments
-
-
114
-
-
114
Proceeds of share issue
1,109
3,285
-
-
-
4,394
Balance at 31 December 2011
10,151
24,175
777
37
(17,313)
17,827
Balance at 1 January 2012
10,151
24,175
777
37
(17,313)
17,827
Loss for the year
-
-
-
-
(4,486)
(4,486)
Recognition of share based payments
-
-
-
-
-
-
Proceeds of share issue
1,485
4,017
-
-
-
5,502
Balance at 31 December 2012
11,636
28,192
777
37
(21,799)
18,843
1. The basic loss per share and the diluted loss per share have been calculated on a loss after taxation of €4,486,000 (2011: loss of €966,369) and a weighted average number of Ordinary Shares in issue for the year of 368,307,907(2011: 324,122,481) for the basic loss per share and 372,209,018 (2011: 331,079,945) for the diluted loss per share.
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