Monday 22 May 2017

Ormonde secures $100m Oaktree deal

Ormonde's mine is now expected to start production in late 2016 or early 2017.
Ormonde's mine is now expected to start production in late 2016 or early 2017.
John Mulligan

John Mulligan

Shareholders at Ormonde Mining have backed plans by the Irish company that will see US private equity giant Oaktree Capital provide almost $100m (€87m) in financing to develop a Spanish tungsten mine.

The approval sees off a challenge from Canadian resources firm Almonty, which had had tabled an indicative offer to buy the Irish company for €27m in cash and stock. Almonty had been circling Ormonde for almost two years.

Almonty chief executive Lewis Black claimed that if combined, the two companies would be able to secured "tens of millions of dollars" in synergies via their mine operations in northern Spain.

Almonty owns an operating tungsten mine about 150km from the tungsten mine that Ormonde is planning to develop, which is called Barruecopardo.

Ormonde's mine is now expected to start production in late 2016 or early 2017.

Ormonde, headed by managing director Kerr Anderson, has insisted the deal with Oaktree, which will see the US firm acquire a 70pc interest in the Barruecopardo mine, is superior to the proposal from Almonty. Mr Lewis has been critical of Ormonde management, who have in turn defended their role in the company and the agreement secured with Oaktree.

Questions had been raised about the projected lifespan of Almonty's tungsten mine in Spain, and also about whether or not the company had the financial capacity to complete a takeover. All those concerns were dismissed by Mr Lewis.

At an extraordinary general meeting in Dublin yesterday, almost 94pc of the Ormonde shares voted were voted in favour of the deal with Oaktree. Just 42pc of the issued share capital in Ormonde was voted at the meeting.

Mike Donoghue, Ormonde's chairman, said he was pleased with the "significant support" from shareholders for the Oaktree financing deal. "We can now move forward with a comprehensive financing package into the development of Barruecopardo as an important tungsten mining operation," he said.

The Irish Independent also revealed last week that well-known resources and cinemas investor Tom Anderson had increased his stake in Ormonde to 6.5pc.

Irish Independent

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