Ormonde Mining PLC Final Results (7825R)

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: [phone]

Paul Carroll, Chief Financial Officer

Fraser Gardiner, Chief Operating Officer

Capital M Consultants

Simon Rothschild Mob: [phone]

Murray Consultants

Mark Brennock Tel: [phone] Mob: [phone]

Davy (Nomad, ESM Adviser and Joint Broker)

John Frain Tel: [phone]

SP Angel Corporate Finance LLP (Joint Broker)

Ewan Leggat Tel: [phone]

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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June 19, 2018 02:00 ET (06:00 GMT)