Ormonde Mining’s Tungsten Project Is Shaping Up Nicely For Scheduled First Production In 2011
By Alastair Ford
minesite.com
A quick visit to Ormonde Mining’s website leaves no doubt as to what the principal business of the company is these days. A section right at the top of the home page labeled “About Tungsten” offers a drop down menu containing information on tungsten mineralization, the uses of tungsten, information on pricing, the structure of the industry, and plenty more besides. Another drop down menu also reveals the interesting information that the company’s name, literally a transliteration of the gaelic for “East Munster”, ultimately derives from a pagan goddess named Muma. Quite what Muma was the goddess of, a limited amount of research from Minesite was unable to ascertain, but it would be nice to imagine that like Aphrodite’s association with copper, Muma has a relationship with tungsten. That’s perhaps a bit of a stretch, though, since tungsten wasn’t isolated fully from its any of its ores until late in the 18th century. So perhaps instead we might conjecture that Muma is the pagan patron saint of rebirth and reinvention, like Aphrodite’s compatriot Persephone, and thereby invoke the spirit of Ormonde’s recent past as it’s moved from a developer of Spanish copper-gold assets into a near-term tungsten producer.
The latest news from Ormonde relates to the metallurgy on the company’s flagship asset, the Barruecopardo project in Spain. Work on Barruecopardo has been continuing apace this year, to the extent that according to Kerr Anderson, Ormonde’s managing director, it could be up and running by early 2011. That’s less than two years away, a schedule that reflects not only the latest favourable news on metallurgy, but also a decent outlook for the tungsten price, and crucially, a stated interest from several tungsten industry participants in funding development at Barruecopardo. At a projected €18 million the projected overall capital cost isn’t exorbitant, especially when compared to the costs on tungsten projects like Mactung in North America, which run into the hundreds of millions of dollars. But it’s still a stretch for Ormonde, capitalized as it is at just over £10 million.
Kerr’s quite clear that he’s had enough of diluting shareholders for the time being, and that the way forward is to talk to a tungsten end user that wants to secure supply. To that end, the latest Ormonde press release notes that Wolfram Bergbau, a major European secondary supplier of tungsten and primary miner, was recently acquired by Sandvik, a major manufacturer of cutting tools. And, as another great tungsten bull, Chris Anderson of Geodex, mentioned to Minesite this week, the thinking must be that with so much stimulus money earmarked for primary infrastructure spend, a fair amount of cash will also be earmarked to pay for the tungsten tools needed to cut all the steel and stone and other metals that will be used in such large scale building projects. So the stimulus ought to be good for the base metals, and good for tungsten too. Meanwhile the tungsten market itself remains tight, as the US runs down its stockpile in the face of reasonably robust demand. The tungsten price has come off since the credit crunch, but only by around 10 per cent or so, although hard data is difficult to come by as it’s not a terminal-traded metal.
It’s a good market for Ormonde to be addressing, though, especially as, in terms of London-listed companies, it has the field all to itself. The next news from the company will be the year end results, likely to be released in the second week of May. There may not be a great deal that’s new in there in terms of progress at Barruecopardo, although Kerr does mention that the company is investigating various options regarding a combined open pit and underground operation, so there may be a little more on that. In fact, much of what’s needed at Barruecopardo is already in place. There’s power, roads, and water. The metallurgy is, says Kerr, “fairly simple”. Funding hasn’t yet been forthcoming, but the noises coming out of the Ormonde camp sound fairly optimistic on that score. A current cash balance of approximately £500,000 will keep the wolf from the door for the time being. And in the mean time, with copper and gold prices still strong, Ormonde’s previous flagship project La Zarza, a copper-gold asset still lies dormant, uneconomic according to an earlier study, and still not looking attractive enough to reactivate ahead of the potential cash cow that is Barruecopardo. But nonetheless it’s not over for La Zarza. A third party has looked it over, and there’s no doubt that the Spanish government, hampered as it is by a collapsing government, would love to be able to talk up the good news of another mine development in the country. A few prayers to the goddess Muma mightn’t go amiss. |
