ORMONDE Mining is near to securing a permit for the development of its Spanish tungsten mine.
The drilling company has got approval from the Spanish provincial government for the Barruecopardo mine, which is located in Salamanca. This is the last hurdle to be cleared before getting approval from Spain's federal government.
Currently, China supplies about four-fifths of all the world's tungsten but Ormonde says the mine will be a major and secure European source for the metal. It says the site will be able to supply 8pc of all tunsgsten sourced outside of China.
Tungsten is the second-hardest metal in the world, after diamond, and is used in aerospace and drilling.
Ormonde expects to be able to sell tungsten produced from Barruecopardo at about $350. This would pay back the cost of developing the well in about two and a half years.
Its feasibility study on the mine said that over a nine-year span, the mine would generate cash flows of €29m per year.
Following the news, London brokers RFC Ambrian said Ormonde was undervalued by the market. It believes the project would get full permission before the end of this year and is confident of local support in the area, as it is very much in need of employment.
"Local infrastructure is excellent, as one would expect within the EU. The area is a historical mining area and well linked by road and power. There is a local supply of water for processing and a local supply of labour. Tungsten is viewed as a strategic metal with no substitute available," said the broker.
Ormonde is currently trying to secure funding for the development. Chairman Michael Donoghue said discussions with a range of banks for loans as well as with parties who might provide finance in return for equity have advanced.
As well as its tungsten operation, Ormonde mines copper and gold in Spain.