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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (31379)	1/19/2009 3:33:18 PM
From: LoneClone	Read Replies (1) \| Respond to of 196083

Ormonde's Barruecopardo Tungsten Project Now Looks As Though It Could Be Producing Next Year By Alastair Ford minesite.com The latest drilling results from Ormonde Mining’s Barruecopardo tungsten project in Spain do more than just fill in a few blanks, though they do that well enough. They also allow the company to double the tonnage it will use in mine modeling studies from 200,000 tonnes per year to 400,000 tonnes, as there is now much greater certainty about the continuity of the orebody, especially around the southern end where all the latest drilling took place. At this stage there won’t be an upgrade to the resource, reported last July at five million tonnes, although the greater certainty generated by the latest round of infill drilling has allowed the company to notch the cut-off down to 0.25%, thereby adding tonnage, although at a small cost to the average grade, which drops from 0.6% to 0.48%. The market certainly appreciated the news, driving Ormonde’s shares in an upward direction for a change. The shares have risen by around 25 per cent to 4.75p since the latest drilling news came out. That’s some way off the company’s highs of course, but then you’d expect that in this market, and in any case, Ormonde’s shareholders have learned to become a patient bunch over the years. For the record, the 12 month share price high was last summer, when the tungsten resource numbers were first announced, the tungsten price was stronger, and the world’s economic and financial system looked as though it was still reasonably functional and effective. Back then the market didn’t seem to mind much that the company’s former flagship project at La Zarza was taking a back seat and bid the shares up to over 13p. It still doesn’t, up to a point, though it’s worth noting that the company hit its all-time share price high of over 22p in the summer of 2006, when La Zarza was still alive, and when the market was adding value not only for La Zarza’s gold content but also for its base metals content too. But, though it’s not that long ago, it was a different world back then - Tony Blair was still prime minister here in the UK, would you credit it. You can’t fault that man on his timing. So though Ormonde may be off its 2006 highs, though it may be down, it’s certainly not out. Because, not to put too fine a point on it, every man and his dog hit a share price high of some sort at around the same time, and the fact that Ormonde’s shares are off since those heady days shouldn’t be a surprise to anyone. In fact, although in percentage terms the drop in share price is quite frightening, as things stand the company is not a member of the 90 per cent club – that exclusive gathering of companies that have lost 90 per cent of their value since the height of the boom – and with the momentum on Barruecopardo now building, looks unlikely ever to join. It’s worth noting that in comparison to the share price performances of most of the North American tungsten companies Ormonde has actually out-performed. Without Barruecopardo, and given the failure of La Zarza to move forward, Ormonde Mining might not have made it through this credit crunch. With Barruecopardo it looks almost certain to survive it. In its own way Barruecopardo is proving to be something of a small company maker. The next big news will be on metallurgy, and it’s not far away. By the end of the first six months of 2009, according to Ormonde managing director Kerr Anderson, all the necessary studies on Barruecopardo will be complete and the company will then be in a position to ask the market for the requisite funding. Doom-mongers look away now, but there are a couple of points running in Ormonde’s favour. The first is that funding deals are getting done. January has seen a couple of deals already, among them new funding for Metals Exploration’s gold-molybdenum project in the Philippines. As broker Fairfax commented earlier in the week, the lending banks must be making record margins, but so be it. The new message seems to be that the money’s there if you want it badly enough. There was a time during the most miserable period at the end of last year when all bets were off and no money was to be had on any terms. The second point in Ormonde’s favour is that actually, the company won’t be looking for a huge amount. With the proviso of a plus or minus 25 per cent margin for error, current Ormonde estimates are that Barruecopardo will cost between €15 million and €20 million to get into production. “It’s not an easy time for anybody in terms of capital raisings”, says Kerr Anderson, but Ormonde won’t necessarily have to go the traditional debt-equity route in any case. A funding deal based around an off-take agreement looks more than likely at this stage. And Barruecopardo could then, with a fair wind and a few more of the blanks filled in, go into production by 2010.