Ormonde Mining Decided to Sell 30% Stake in the Barruecopardo Tungsten Mine

Ormonde Mining is considering all future options after opting to sell out of its chief asset. So the Meath-based prospector has decided to sell its 30% stake in the Barruecopardo tungsten mine, in western Spain, for €6m to its joint-venture partner US investment firm Oaktree Capital Management.

Ormonde’s reasoning surrounds the need for additional capital to access the main tungsten zone in the mine.

Barruecopardo has been blighted by a number of setbacks and needed an extra €10m in funding last year. An estimated €12m-€15m extra is needed now.

Even to cover a 30% share of that cost, Ormonde would be faced with raising more equity or diluting its interest in the mine, both of which would dilute existing shareholders’ interests.

Barruecopardo tungsten mine image

Finalisation of the sale is dependent on shareholder approval at an EGM on February 12. By that date, Ormonde’s management is expected to have come to some conclusion over the company’s future.

Chief financial officer Paul Carroll said management is talking to Ormonde’s main shareholders over its options. London-based M&G Investment Management and veteran investor Tom Anderson are Ormonde’s chief shareholders.

Ormonde is also talking to London’s AIM market in a bid to keep its share listing for the foreseeable future. Under AIM rules, Ormonde would be classed as a cash shell — and in line for a suspension in share trading — should the sale of its main asset proceed.

The Irish mining firm still has two assets - a gold prospect and a copper prospect - in Spain which could be sold or developed. Barruecopardo debt is expected to reach €70m by next year.

 

 

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