REG - Ormonde Mining PLC - Final Results 2013 <Origin Href="QuoteRef">ORM.I</Origin>
06/09/2014 02:10
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RNS Number : 3056J
Ormonde Mining PLC
11 June 2014
11 June 2014
Ormonde Mining plc
("Ormonde" or "the Company")
Final Results for the year ended 31 December 2013
DUBLIN & LONDON: 11 June 2014 - Ormonde Mining plc announces its final results
for the year ended 31 December 2013.
HIGHLIGHTS FOR THE YEAR AND POST YEAR END
· Significant advances in permitting for Barruecopardo, resulting in the
receipt of the Project's Environmental permit.
· Off-take agreement signed with Noble Group for 100% of the tungsten
concentrate produced from the Barruecopardo open pit mine during its initial
five years of operation.
· Appointment of Swedbank as advisor in relation to a E50 million senior
bond financing for Barruecopardo.
· Award of the Barruecopardo Engineering Design Contract to Fairport
Engineering.
· Tungsten prices forecast to remain strong over the coming years.
· Further positive results from drilling on our gold projects in
Salamanca.
Mike Donoghue, Chairman, commented:
"We have made considerable progress at our flagship Barruecopardo Tungsten
Project over the last year and into 2014, including the achievements on
permitting with the receipt of the Environmental Permit, the appointment of
Swedbank as advisor in relation to a E50M senior bond financing, and the
signing of an offtake agreement with Noble Group, expected to generate net
revenues, if the current tungsten price (APT) of around US$375 per metric
tonne unit were to be applied, in excess of US$350 million over the Project's
initial five years of production.
In addition, Ormonde engaged Fairport Engineering to provide Engineering &
Design services for the Project, positioning us ready to order key equipment
items and advance development upon receipt of the Mining Concession and a
successful conclusion to project financing activities."
Enquiries to:
Ormonde Mining plc
Kerr Anderson, Managing Director Tel: +353 (0)1 8253570
Bankside Consultants
Simon Rothschild Mob: +44 (0)7703 167065
Murray Consultants
Mark Brennock Tel: +353 (0)1 4980300 Mob: +353 (0)87 2335923
Davy (Nomad / ESM Adviser)
Eugenée Mulhern / Roland French Tel: +353 (0)1 6796363
SP Angel Corporate Finance LLP (Joint Broker)
Ewan Leggat / Katy Birkin Tel: +44 (0)20 3463 2260
CHAIRMAN'S REVIEW
2013 was an eventful year for your Company with very considerable initiatives
taken and ongoing progress made at our flagship Barruecopardo Tungsten
Project. These have to date resulted in the receipt of the Environmental
Permit; the appointment of Swedbank as advisor in relation to a E50M senior
bond financing; the signing of an offtake agreement with Noble Group for the
tungsten concentrates produced over the Project's initial five years of
production; and the advancement of engineering and design work required to
enable the ordering of priority one equipment orders; all achieved despite an
unsolicited preliminary approach from a tungsten producer seeking to acquire
Ormonde in a share for share exchange. This approach caused the Company to
enter an 'offer period' under the Irish Takeover Rules, causing the activity
of the Company to be curtailed to an extent during this period.
Barruecopardo
Our permitting and environmental submissions to the Salamanca Provincial
Authorities of the Region of Castilla y Leon were presented in Q3 2012 and
following successful completion of the public consultation process and
internal reviews by the Provincial Authorities, our submission was forwarded,
with a positive recommendation, to the Regional Environment Department in July
2013. A review of the submission was then completed by that Department,
leading to a favourable recommendation in the "Report on the Nature Network"
("IRNA). This was followed shortly thereafter by the issuing of the
Environmental Impact Declaration ("EID") for the Project. The receipt of the
EID represents a major milestone, in effect being the Project's environmental
permit, and one of the final steps required to enable the Mining
(Exploitation) Concession to be granted by the Director General for Energy and
Mines. It is understood that a review of the historic mining concessions
(Barruecopardo was last operated in the 1980's) is now being completed as part
of the finalisation of the documentation for the Mining Concession. We now
await the issuance of the Mining Concession, anticipated shortly.
While the permitting process has been proceeding, and indeed prior to this
during the feasibility study stage, Ormonde has developed appropriate contacts
in the capital markets, particularly with lenders who have capability and
experience in arranging or providing debt to resource projects. In this
regard, as progress was made in the permitting process, the Company decided to
appoint Swedbank Norway (a subsidiary of Swedbank) as advisor in relation to a
E50 million senior bond financing. Swedbank has considerable experience and
distribution capability in the bond market, working as lead or sole broker in
a number of such issues each year, a significant portion of which are in the
resource sector.
For minor metals such as tungsten, debt providers need sufficient comfort that
there will be a buyer for the metal produced. To ensure that such comfort was
available, Ormonde developed contacts with most tungsten concentrate offtakers
and marketing agents over the last few years and the progress made during 2013
and early 2014 opened up the opportunity to finalise our tungsten offtake
arrangements prior to committing to the capital funding arrangements. This
led, in April this year, to the Company entering into a binding offtake
agreement with Noble Resources International Pte. Ltd a wholly-owned
subsidiary of the Noble Group, a global market-leading commodities
supply-chain manager of energy products, metals, minerals & ores and
agricultural products, with total revenues of US$98 billion in 2013. Under the
agreement, Noble will purchase 100% of the tungsten concentrate produced from
the Barruecopardo open pit mine during its initial five years of operation.
Thereafter, Noble and Ormonde will extend the offtake through negotiation or
enter into an arrangement whereby Noble will provide marketing agency services
to Ormonde for the tungsten concentrate produced.
With various aspects of the Project making significant advances, Ormonde was
in a position to move forward on other fronts, the most critical from a timing
perspective being engineering design works, essential to ensure that the
orders of key equipment for the mine processing plant can be placed without
further delay following completion of project financing. During 2013,
discussions were held with appropriate engineering firms, possessing the
relevant mineral processing experience, with a view to selection of a firm to
carry out the detailed engineering design work for the development of a mine
at Barruecopardo. This lead to the signing of a contract with Fairport
Engineering Limited, an experienced UK-based engineering firm involved in the
aggregates, cement, and minerals processing industries, from engineering
design to turnkey project delivery. Fairport has extensive design and
development experience within the UK and continental Europe, involving the
gravity separation and concentration of minerals. Stage-1 of this engineering
design work is presently in progress. In addition, the project team in Spain
has been busily preparing all matters onsite to ensure readiness when the
Mining Concession is received. This work includes the continuation of land
acquisition arrangements, via a lease with option to purchase agreements, with
contingency preparations in place to initiate compulsory acquisition of
outstanding lands, as necessary, upon receipt of the Mining Concession.
With permitting nearing completion, capital funding being progressed,
engineering design work underway, offtake arrangements secured and onsite
preparations well advanced, Ormonde has made considerable progress during the
past 12-15 months having regard to its available resources.
Looking briefly at the tungsten market, the tungsten price averaged around
US$375 per mtu of APT during 2013 and is currently trading at around that
price. The serious constraints on discovering and developing new tungsten
mining projects, the continuing increasing global demand, coupled with the
lack of substitution options, supports the view that the supply-demand dynamic
will remain supportive of a strong price into the future. Projections by
independent market research for annual global growth in demand range between
3% and 5%, and 3 to 5 year price forecasts are above US$400 for much of that
period, with one metals analyst, Tungsten Market Research, forecasting prices
in the range of US$475-510 over the period 2015-18.
Other Projects
Drilling results reported from both the Peralonso and Cabeza de Caballo
Prospects in the first half of the year in our gold joint venture with Aurum
Mining plc yielded encouraging results, including shallow high-grade drillhole
intersections of 2 metres grading 10.2 g/t gold and one metre grading 33.2 g/t
gold from Peralonso. At Cabeza de Caballo, low-grade gold mineralisation was
intersected in the first holes to be drilled on the prospect, within an
extensive vein system. Both prospects warrant further drilling.
At La Zarza, our efforts were concentrated on the conclusion of an arrangement
that would see a potential divestment of the Company's interest in the
Project. Discussions are on-going in this regard.
Corporate and Financials
I referred at the outset to the unsolicited approach made by another tungsten
company. That approach, in August 2013, by Almonty Industries, was rejected by
the Board as it was regarded as opportunistic and lacking in both strategic
and economic merit for Ormonde shareholders at a key time when the Company was
making significant progress towards the development of Barruecopardo. Although
the resultant offer period arising under the Irish Takeover Rules did
complicate certain activities, we remained focused throughout the offer period
and following its termination at the end of January when Almonty failed to
make an offer by the deadline imposed by the Irish Takeover Panel, we are now
embarked on the final activities to enable development of our planned mining
operation.
The Company has reported a loss for the year of E1.81m, compared with a loss
of E4.48m for 2012. The Company raised approximately £1.07 million (before
expenses) through a share placing in September 2013, and subsequent to the
year end, the Company raised £2.0 million (before expenses) through a share
placing in April 2014 to progress engineering works, permitting and funding
activities relating to Barruecopardo and for general working capital
purposes.
In conclusion, I would like to thank shareholders for their patient support
during the last year. I believe it has been worthwhile, with the substantial
progress made, and I look forward to the period ahead as we take our
Barruecopardo project into the development stage.
Michael J. Donoghue
Chairman
10 June 2014
Consolidated Statement of Comprehensive Income
Year ended 31 December 2013
2013 2012
E000's E000's
Administrative expenses (1,397) (1,169)
Exploration costs written off (418) (3,335)
OPERATING LOSS (1,815) (4,504)
Interest receivable and similar income 7 23
LOSS FOR THE YEAR BEFORE TAXATION (1,808) (4,481)
Taxation (1) (5)
LOSS FOR THE YEAR (1,809) (4,486)
Minority Interest - -
RETAINED LOSS FOR THE YEAR (1,809) (4,486)
EARNINGS PER SHARE
Basic loss per ordinary share (E0.0045) (E0.0122)
Diluted loss per ordinary share (E0.0044) (E0.0121)
Consolidated Statement of Financial Position
As at 31 December 2013
2013 2012
E000's E000's
ASSETS
NON-CURRENT ASSETS
Intangible assets 17,127 16,406
Property, plant and equipment 1 3
17,128 16,409
CURRENT ASSETS
Trade and other receivables 394 559
Cash and cash equivalents 1,050 2,282
Total Current Assets 1,444 2,841
TOTAL ASSETS 18,572 19,250
EQUITY AND LIABILITIES
EQUITY
Issued share capital 12,197 11,636
Share premium account 28,837 28,192
Share based payment reserve 837 777
Capital conversion reserve fund 29 29
Capital redemption reserve fund 7 7
Foreign currency translation reserve 1 1
Retained loss (23,608) (21,799)
Equity attributable to Owners of the Company 18,300 18,843
CURRENT LIABILITIES
Trade and Other Payables 272 407
Total Current Liabilities 272 407
Total Liabilities 272 407
TOTAL EQUITY AND LIABILITIES 18,572 19,250
Consolidated Statement of Cash Flows
Year ended 31 December 2013
2013 2012
E000's E000's
CASHFLOWS FROM OPERATING ACTIVITIES
Loss for the year before taxation (1,808) (4,481)
Adjustments for:
Depreciation 2 2
Exploration costs written off 418 3,335
Movement on share-based payment reserve 60 -
Investment revenue recognized in profit or loss (7) (23)
(1,335) (1,167)
MOVEMENT IN WORKING CAPITAL
(Increase) in debtors 165 (132)
Increase /(Decrease)in creditors (136) (951)
Income taxes paid - -
NET CASH (USED IN) OPERATING ACTIVITIES (1,306) (2,250)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds of issue of share capital 1,206 5,503
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditure on exploration activities (1,138) (2,977)
Movement in property, plant and equipment - (2)
Interest received 7 23
Taxation (1) (5)
NET CASH (USED IN) INVESTING ACTIVITIES (1,132) (2,961)
NET INCREASE /(DECREASE) IN CASH AND CASH EQUIVALENTS (1,232) 292
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 2,282 1,990
CASH AND CASH EQUIVALENTS AT END OF YEAR 1,050 2,282
Consolidated Statement of Changes in Equity
Year ended 31 December 2013
Share
Based
Share Share Payment Others Retained s s
Capital Premium Reserve Reserves Losses Total
E000's E000's E000's E000's E000's E000's
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
Balance at 1 January 2013 11,636 28,192 777 37 (21,799) 18,843
Loss for the year - - - - (1,809) (1,809)
Recognition of share based payments - - 60 - - 60
Proceeds of share issue 561 645 - - - 1,206
Balance at 31 December 2013 12,197 28,837 837 37 (23,608) 18,300
1. The basic loss per share and the diluted loss per share have been
calculated on a loss after taxation of E1,809,000 (2012: loss of E4,486,000)
and a weighted average number of Ordinary Shares in issue for the year of
404,950,441(2012: 368,307,907) for the basic loss per share and 406,705,542
(2012: 372,209,018) for the diluted loss per share.
This information is provided by RNS
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