Business
Proposed Disposal
Proposed Disposal.
About this update from Ormonde Mining Plc
[{"type":"text","content":"\n \nRNS Number : 1837Z Ormonde Mining PLC 08 January 2020 \n\nThis announcement contains inside information\n \n8th January 2020\n \nOrmonde Mining plc\n \n(\"Ormonde\" or the \"Company\")\n \nProposed disposal of Ormonde's 30% interest in the Barruecopardo Tungsten Mine\n \nOrmonde announces that it has entered into a conditional Sale and Purchase Agreement (\"SPA\") for the disposal of the Company's 30% interest in Barruecopardo Joint Venture BV (\"Barr BV\"), the joint venture holding company for the Barruecopardo Tungsten Mine (the \"Mine\") in Salamanca, Spain, to Oaktree Capital Management (\"Oaktree\") for a total net cash consideration of €6 million (the \"Disposal\"). \n \n \nSummary of the reasons for and terms of the proposed Disposal\n \n· Low initial ore grades and delays to accessing the main orebody, reported by the Mine's management team and disclosed by Ormonde in recent announcements, have resulted in overall mine production and related revenues being substantially lower than the 2012 feasibility study forecasts for the current stage of ramp-up, which, when coupled with accelerated waste mining and the related increase in mining costs, have led to additional funding requirements for the Mine;\n· An additional debt financing of €10 million was announced on 17th October 2019, with initial draws on this facility increasing debt levels in the Barr BV group to €58.8 million, as at 30th November 2019;\n· As announced by Ormonde on 25th November 2019, the Mine's plans were being updated by the Mine's management team taking account of ore depletion from old mine workings within the southern starter pit. A proposed 2020 budget for the Mine's continued operations, based on these updated plans, foresees a further cash shortfall by the end of February or during March 2020, and an additional funding requirement, which is currently estimated by the Company to be in the region of €12-15 million;\n· This new funding requirement is set against a backdrop of weak tungsten prices, with benchmark prices of ammonium paratungstate (\"APT\") currently quoted at US$235-245 per metric tonne unit (\"mtu\") versus the US$350 per mtu price used in the 2012 feasibility study;...