Business Irish

Saturday 20 January 2018

Ormonde close to a deal to fund tungsten mine project in Spain

Ormonde Mining- close to finalising a funding agreement.
Ormonde Mining- close to finalising a funding agreement.
John Mulligan

John Mulligan

Irish resources firm Ormonde Mining said it is close to finalising a funding agreement with US private equity giant Oaktree that will enable it to develop its tungsten mine in Spain - one of the world's biggest such undeveloped projects.

The pair have been locked in discussions since February, when Oaktree Capital Management and Ormonde entered exclusive talks on the proposed financing. That period of exclusivity ended last Friday.

But Ormonde insisted yesterday that the two firms are close to finalising a deal for the Barruecopardo tungsten project in Salamanca, Spain.

"The exclusivity period was to enable the advancement of the project financing arrangements including drafting of long form documentation and signing of binding agreements," said the Irish mining firm.

"Very significant progress has been made during the exclusivity period, and the parties are expected to be in a position to finalise agreements shortly," it added.

Last month, Ormonde, which is headed by managing director Kerr Anderson, was targeted in a fresh takeover bid by Canadian rival Almonty Industries. It's the second time the Canadian firm has launched a takeover attempt for the Irish company.

Almonty, which owns the Los Santos tungsten mine in Salamanca, made its first approach to buy Ormonde in 2013. At the time, the board of Ormonde rejected the overture.

It said that the approach was "speculative, opportunistic and lacking in both strategic and economic merit for Ormonde shareholders". But Almonty has insisted a tie-up between the pair makes sense.

Ormonde is hoping that if it seals a financing deal with Oaktree that the Barruecopardo project can be operational by the second half of 2016. Under a financing agreement, Oaktree would become a majority shareholder in Ormonde.

Tunsgten has a number of applications, including its use as tungsten carbide in the mining and petroleum sectors for drilling tools.

Irish Independent

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