Ormonde shares surge as Spanish tungsten mine gets the go-ahead
ORMONDE Mining's share price has jumped after the company got the orange light from Spain's environmental authorities to develop its flagship tungsten mine.
Regional environmental authorities have given their long-awaited written approval of the project, seen as the last major obstacle facing the mine. Ormonde's plans will not affect nearby areas of wildlife and flora/fauna. As tungsten is a hard mineral, its extraction should not risk leaking any dangerous gases.
The Meath-headquartered company must still be granted an Environmental Impact Declaration for the project, but that is more of a formality.
Ormonde's share price rose 7.7pc to 5.25 pence (6.35 cents) in London yesterday following the announcement. The company's share price has slumped this year as delays on the mine grew to more than a year.
Ormonde is not currently in production anywhere else and its gold and copper assets in Spain are at a much earlier stage of development, so a lot hinges on this project.
Known as the Barruecopardo mine, it is located in Salamanca. Ormonde predicts, once operational, it will supply 8pc of the world's tungsten needs.
The next step is to look for funding for the project, which it had to wait for environmental approval to do. It will most likely seek debt rather than equity funding, to meet some of the €48m start-up costs. These are relatively small because much of the tungsten deposits are near the surface and there is an existing mining facility vacant at the site which is available for use.
Ormonde estimates, based on a sale price of $350 per tonne of tungsten (current market price is $380 per tonne), that the project will produce a pre-tax profit of €29m a year. That means its start-up costs should be recouped in two years once the mine is operational.