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Irish mining firm Ormonde circled in takeover bid

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Martin Hughes’ Toscafund will own a 41.5pc stake in San Leon Energy should a €22m investment be finalised

Martin Hughes’ Toscafund will own a 41.5pc stake in San Leon Energy should a €22m investment be finalised

Martin Hughes’ Toscafund will own a 41.5pc stake in San Leon Energy should a €22m investment be finalised

Irish firm Ormonde Mining is again being targeted in a takeover bid by Canadian rival Almonty Industries.

Ormonde, which is developing a tungsten mine in Spain, previously rejected a €23m approach by the suitor.

Declaring its interest in buying Ormonde again yesterday, Almonty insisted a deal would make sense.

"Almonty believes that the strategic fit between Almonty and Ormonde is excellent and that there are significant advantages to combining the companies," said Almonty chairman and chief executive Lewis Black.

Almonty is interested in Ormonde's Barruecopardo tungsten project in Salamanca.

Last month, Ormonde announced that it had finalised an agreement that would see funds managed US investment firm Oaktree Capital stump up funding for the mine's development.

Oaktree would become a majority shareholder in the mine, which could become operational by the second half of 2016. Ormonde said the latest takeover approach from Almonty "does not include any material detail as to how the necessary project financing for the Barruecopardo project would be secured".

"We believe the combined entity will be ideally positioned as an attractive platform for further accretive growth and consolidation in global tungsten sector," Mr Black countered.

He added that we "believe it will be ideally positioned to finance the build-out of Barruecopardo thus mitigating the implied dilution from the proposed transaction with Oaktree Capital Management".

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, whose managing director is Kerry Anderson, rejected the Almonty approach.

It said that the approach was "speculative, opportunistic and lacking in both strategic and economic merit for Ormonde shareholders".

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