TIDMORM
RNS Number : 7825R
Ormonde Mining PLC
19 June 2018
19 June 2018
Ormonde Mining plc
("Ormonde" or "the Company")
Final Results for the year ended 31 December 2017
DUBLIN & LONDON: 19 June 2018 - Ormonde Mining plc announces
its final results for the year ended 31 December 2017.
HIGHLIGHTS FOR THE YEAR AND POST YEAR
-- The accelerated construction and implementation phase of the
Barruecopardo Tungsten Project (the "Project") in Spain has been
ongoing since June 2017, and progress to-date remains in line with
the capital budget and development schedule;
-- Key Project developments include:
o Turnkey crush and screen plant - primary crusher and discharge
conveyor to coarse ore stockpile, installation completed; erection
of secondary, tertiary and quaternary crushers and screening
circuit all well advanced; ROM pad built up from waste rock
mining;
o Process plant - civil works mostly completed and equipment
installation in progress: jigs installed, spirals assembled,
tailings thickener installed and installation of large tailings
filter press underway; and
o Water dams' construction and lining completed and other site
infrastructure either completed or in advanced stages of
development, including water treatment plant, high-tension
substation and powerline, and site offices and workshop.
-- Initial commissioning of certain installations to commence
during Jul-Aug 2018, with commissioning of the process plant
expected to commence around end September 2018;
-- Initial production expected to commence towards the end of
2018, followed by a gradual build-up of production levels over the
early months of 2019;
-- APT prices have risen during 2017 and strengthened further in
2018 to a current level of US$350-354 per metric tonne unit (mtu),
with demand likely to remain as the Project comes on stream;
-- The Project's development has benefitted from the support of
the surrounding communities and local staff and contractors make up
a significant portion of the site workforce;
-- The Company reports a loss for the year of EUR0.1 million
compared with a loss of EUR2.29 million in 2016.
Michael Donoghue, Ormonde's Chairman and Interim Managing
Director, commented:
"It is pleasing to be in a position to report a very successful
year, with the decision taken in mid-2017 to advance the Project
into an accelerated construction and implementation phase validated
by the significant increases in tungsten prices seen since that
time.
"Progress on the development of a new tungsten mine at
Barruecopardo is advancing in accordance with the Project schedule
and its capital budget, with plant commissioning expected to
commence around the end of the third quarter of 2018, followed by
initial production by the end of the year, providing a new
European-based, secure supply to global markets."
Enquiries to:
Ormonde Mining plc Tel: +353 (0)1 8014184
Paul Carroll, Chief Financial Officer
Fraser Gardiner, Chief Operating Officer
Capital M 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 and Joint Broker)
John Frain Tel: +353 (0)1 679 6363
SP Angel Corporate Finance LLP (Joint Broker)
Ewan Leggat Tel: +44 (0)20 3 470 0470
CHAIRMAN'S REVIEW
It is pleasing to be in a position to report that we had a
successful year, with progress at the Barruecopardo Tungsten
Project in Spain proceeding along planned lines against a backdrop
of very positive tungsten market sentiment, such that we can look
forward to bringing the Barruecopardo Mine on stream towards the
end of 2018.
Barruecopardo
Early in 2017, Saloro SLU, the Barruecopardo Project operating
company in which Ormonde holds a 30% interest, successfully
completed the process of land acquisition over the remaining lands
required to develop the Project. The last steps in this process
consisted of the compulsory acquisition of certain land blocks and,
in order to avoid a lengthy court acquisition process for these
remaining blocks, the Regional Government of Castilla y León
decided to avail of the "urgent" occupation regulations,
fast-tracking Saloro's access to and use of this remaining land.
This process required a vote by the Regional Government and it was
satisfying to see the Government deliver on this, demonstrating the
strong goodwill and support for the Barruecopardo Project locally.
Following a few subsequent procedural steps, by early 2017 Saloro
had access to and rights over all of the land required for the
development of a mine at Barruecopardo.
Construction work on site during 2017 can be divided into two
half year periods. During the first half of 2017, when tungsten APT
prices were hovering around the US$200/mtu mark, showing a
tentative recovery from the US$160-180/mtu range of 2016,
construction activity at Barruecopardo was reduced to a steady,
measured rate. The logic of this approach was to ensure that Saloro
did not commence production at a time of low metal prices, when its
debt would be at a maximum and revenue constrained. As the first
half of the year progressed, our assessment as to the market
fundamentals required to support increasing tungsten prices
improved significantly, with Saloro responding in June 2017 by
accelerating the development and implementation of the
Barruecopardo Project through a new fast-track schedule.
This strategy has worked well, with APT prices rising from
around US$230/mtu in June 2017 to just under US$300/mtu at the end
of the year. Subsequently, over the past six months, the APT price
has been rising steadily from around US$300/mtu in January to
US$352/mtu in mid-June. As a result, we can now look forward to
delivering our initial tungsten production into a strong market,
where there is a shortage of concentrate supply to feed APT
plants.
Activity on site during the earlier part of 2017 was largely
centred around construction of access roads and the various water
dams which will be used to store water from the existing open-pit
and to provide process water for the new plant. Activity during the
second half of the year moved onto general civils works,
construction of offices, workshops and process plant concrete
footings. During this period most of the priority 1 and 2
fixed-plant was manufactured.
Since the year-end, activities have ramped up further, and are
now at the stage where this fixed-plant is being assembled and in
the process of being erected in position. Installation of the
primary crusher has been completed and installation of the
secondary, tertiary and quaternary crusher and screening circuits
and crushed ore stockpile feed/outlet, is well advanced. The
ore-feed conveyors are being assembled and erected. Work on the
concentrate circuits and water treatment plant is progressing and
the high-tension sub-station and power-line are being advanced.
We are very pleased with the performance of the construction
programme to-date, with process plant commissioning due to commence
around the end of September 2018. We look forward, following the
completion of mine commissioning, and on commencement of
production, to Barruecopardo delivering global markets with a
secure and strategic supply of tungsten that is independent of
output from China.
Other Projects
We continue to seek the divestment of our La Zarza interests.
Against a background of overall renewed investment interest in
copper and the lack of available advanced projects, this process
has attracted interest from several parties and we continue to
advance discussions with potential investors.
At the Salamanca and Zamora gold properties, where Ormonde (in
joint venture with Shearwater Group plc) holds a 47% and 42%
interest, respectively, the investigation permits are presently
going through the process of being renewed for a further 3-year
period. No new work programmes have been carried out during the
renewal process.
Corporate and Financials
The Company has reported a loss for the year of EUR0.1 million,
compared with a loss of EUR2.29 million for 2016. This significant
reduction in annual losses was a result of a reduction in losses
from the Company's share in its associate investment (the group in
which the Barruecopardo Project is held) and there being no
impairment required to the holding value of Group assets in 2017
(impairment of EUR2 million in 2016).
Finally, I would like to thank shareholders, management, staff
and other stakeholders for their patience and support as we made
this journey from exploration to mine development. We believe
substantial progress has been made and we very much look forward to
commencing production later this year.
Michael J. Donoghue
Chairman
Consolidated Statement of Comprehensive Income
Year ended 31 December 2017
2017 2016
EUR000's EUR000's
Turnover - Continuing operations 750 1,000
Administration expenses (764) (855)
Amounts written off intangible assets - (2,000)
Finance costs (1)
----------- -----------
Loss for the year before taxation (15) (1,855)
Income tax expense - (1)
----------- -----------
Loss on ordinary activities after taxation (15) (1,856)
Group share of loss on associate investment (86) (431)
----------- -----------
Total comprehensive loss for the year (101) (2,287)
=========== ===========
EARNINGS PER SHARE
Basic loss per ordinary share (EUR0.0002) (EUR0.0048)
=========== ===========
Diluted loss per ordinary share (EUR0.0002) (EUR0.0048)
=========== ===========
Consolidated Statement of Financial Position
As at 31 December 2017
2017 2016
EUR000's EUR000's
ASSETS
NON-CURRENT ASSETS
Intangible assets 3,311 3,300
Investments 16,227 16,313
-------- --------
Total Non-Current Assets 19,538 19,613
CURRENT ASSETS
Trade and other receivables 32 37
Cash and cash equivalents 511 694
-------- --------
Total Current Assets 543 731
TOTAL ASSETS 20,081 20,344
======== ========
EQUITY AND LIABILITIES
CAPITAL AND RESERVES
Issued share capital 13,485 13,485
Share premium account 29,932 29,932
Share based payment reserve 837 837
Capital conversion reserve fund 29 29
Capital redemption reserve fund 7 7
Foreign currency translation reserve 1 1
Retained loss (24,312) (24,221)
-------- --------
Equity attributable to Owners of the Company 19,979 20,080
CURRENT LIABILITIES
Trade and other payables 102 264
-------- --------
Total Current Liabilities 102 264
-------- --------
Total Liabilities 102 264
-------- --------
TOTAL EQUITY AND LIABILITIES 20,081 20,344
======== ========
Consolidated Statement of Cashflows
Year ended 31 December 2017
2017 2016
EUR000's EUR000's
CASHFLOWS FROM OPERATING ACTIVITIES
Loss for the year before taxation (15) (1,856)
Adjustments for:
Depreciation - 1
Write down of intangible assets - 2,000
Cashflow from operating activities (15) 145
MOVEMENT IN WORKING CAPITAL
Movement in debtors 5 (1)
Movement in creditors (162) (82)
Net cash generated by /(used in) operating
activities (172) 62
CASHFLOWS FROM INVESTING ACTIVITIES
Net expenditure on intangible assets (11) (21)
Acquisitions and disposals 86 431
--------- ---------
Net cash generated by investing activities 75 410
Share of loss in associate (86) (431)
--------- ---------
Cashflow from investing activities (11) (21)
NET MOVEMENT IN CASH AND CASH EQUIVALENTS (183) 41
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 694 653
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR 511 694
========= =========
Consolidated Statement of Changes in Equity
Year ended 31 December 2017
Share
Based
Share Share Payment Other Retained
Capital Premium Reserve Reserves Losses Total
EUR000's EUR000's EUR000's EUR000's EUR000's EUR000's
Balance at 1 January
2016 (as previously
reported) 13,485 29,932 837 37 (22,089) 22,202
Prior year adjustment - - - - 165 165
-------- -------- -------- -------- -------- --------
Balance at 1 January
2016 (as restated) 13,485 29,932 837 37 (21,924) 22,367
Loss for the year - - - - (2,287) (2,287)
Balance at 31 December
2016 13,485 29,932 837 37 (24,211) 20,080
-------- -------- -------- -------- -------- --------
Balance at 1 January
2017 (as restated) 13,485 29,932 837 37 (24,211) 20,080
Loss for the year - - - - (101) (101)
Balance at 31 December
2017 13,485 29,932 837 37 (24,312) 19,979
-------- -------- -------- -------- -------- --------
1. The basic loss per share and the diluted loss per share have
been calculated on a loss after taxation of EUR101,000 (2016: loss
of EUR2,287,000) and a weighted average number of Ordinary Shares
in issue for the year of 472,507,482 (2016: 472,507,482) for the
basic loss per share and 472,507,482 (2016: 472,507,482) for the
diluted loss per share.
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END
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