Ormonde Mining receives $25m cash injection
Published 23/06/2015 | 02:30
Irish resources firm Ormonde Mining has just received its tranche of cash from US private equity giant Oaktree Capital, worth $25m, to develop its flagship asset, a Spanish tungsten mine.
US fund Oaktree Capital recently took a majority stake in the Barruecopardo mine after shareholders in Ormonde voted overwhelmingly in favour of a deal last month.
The move saw the fund and the company split ownership of the tungsten mine 70pc-30pc in return for almost $100m (€88m) in debt and equity. The $25m was the first tranche of the agreed funds.
An environmental permit was granted for the project early last year, and the full mining permit was granted in November 2014.
Barruecopardo is now due to start production in late 2016 and Ormonde said it was positioned to develop it into a significant, low-cost mine and a major European supplier of tungsten, with expansion potential.
Ormonde says that it has now completed all conditions relating to the Oaktree financing.
The Meath-based company also raised £2m (€2.7m) through a placing in April of last year to progress engineering works, permitting and funding activities relating to Barruecopardo and for general working capital purposes.
Ormonde's managing director Kerr Anderson, said: "I am extremely pleased to report the closing of the $99.7m Oaktree financing, and the receipt by the project company of the initial $25m in equity funding.
"Activities that commence the project's development timeline have now been initiated, with commissioning targeted by the end of 2016."
The deal with Oaktree saw off a challenge from Canadian resources firm Almonty, which had tabled an indicative offer to buy the Irish company for €27m in cash and stock.
The Canadian company had been circling Ormonde for almost two years. Ormonde previously rejected a €23m approach by the suitor. Almonty, which owns the Los Santos tungsten mine in Salamanca in Spain, made its first approach to buy Ormonde in 2013. At the time, the board of Ormonde rejected the Almonty approach.
Last week Ormonde announced that losses at the firm fell from €1.8m to €1.6m in the 12 months to the end of 2014.