Tungsten Project Option
Ormonde Mining PLC
28 February 2006
28 February 2006
Ormonde Mining plc
Option to Acquire Tungsten Project in Salamanca
DUBLIN & LONDON: 28 February 2006 - Ormonde Mining plc ("Ormonde" or "the
Company") announces that it has entered into an option agreement to acquire the
Barruecopardo Tungsten Tailings Project ("the Project"), located in the permit
area of the Company's Salamanca Gold Project in Western Spain.
During Ormonde's option period, which runs until September 2006, it will fully
assess the grade, volume, and rate of recovery of the tungsten contained in the
dumps and tailings ("tailings") material produced from the Barruecopardo
tungsten mine. Recent sampling by Ormonde of the vein material originally mined
to produce the tungsten has also confirmed the presence of gold with the
tungsten and this gold potential will also be evaluated. Upon exercising its
option, Ormonde would have 100 per cent of the mineral rights pertaining to
tungsten and gold for which it will pay an annual royalty and lease fee.
The Company envisages a simple, low-cost operation initially processing around
400,000 tonnes of material per annum through a small gravity separation plant,
to produce high-quality tungsten concentrates for direct sale. There would be
no mining cost and a low milling cost as the material is already partially
crushed. Production capacity could be increased following the start-up of an
operation.
The Barruecopardo Mine, which closed in the early 1980s, was one of Europe's
largest tungsten operations producing some of the highest quality tungsten
products in the market. Mining records suggest, however, that the rate of
tungsten recovery was only about 40 per cent, indicating that a majority of the
tungsten was discarded in the tailings. Ormonde estimates that there is between
5-10 million tonnes of tailings at grades of 0.08 to 0.10 per cent WO3, which
potentially represents a significant resource.
Ormonde's Chairman Mike Donoghue said today,
"The Tungsten Tailings Project has potential to become a near-term
profit-generating operation and gives Ormonde exposure to upside in the tungsten
price, being at its highest for over 20 years. We feel that the Project,
considering the low capital spend required, has distinct potential which can be
exploited at low cost and without detracting management resources from our core
assets."
Enquiries to:
Kerr Anderson, Managing Director,
Ormonde Mining plc Tel: +353 (0)46 9073623
Fraser Gardiner, Director,
Ormonde Mining plc Tel: +353 (0)86 3931178
Simon Rothschild,
Bankside Consultants Tel: +44 (0)20 7367 8871 Mobile: +44 (0)7703 167065
ENDS
BACKGROUND INFORMATION
Ormonde Mining is quoted on the AIM in London and the IEX in Dublin. The
Company's strategy is to enhance shareholder value by developing gold projects
in Spain and taking them into production. Ormonde has a strong local Spanish
management team, supported by a Board with extensive mine development and
exploration experience.
For more information and contact details including email, please visit
www.ormondemining.com.
ABOUT TUNGSTEN
Tungsten is most frequently used as tungsten monocarbide, which has a hardness
close to diamond, in cemented carbides. The most well-known use of tungsten is
in lighting filaments, and other important applications include improving steel
properties and use in tungsten alloys, electronics, and chemical products.
Annual world production is only 74,000 tonnes of tungsten metal, with the
largest producer being China. One of the world's largest producers of tungsten
concentrates outside China is the Panasqueira mine in Portugal.
Marketable ore concentrates of scheelite, the main tungsten mineral at
Barruecopardo, typically contain 65-70 per cent WO3 (tungsten trioxide).
Concentrates are generally priced per "metric tonne unit" (mtu), equivalent to
10 kilograms. Prices of tungsten concentrates, which are traded through private
contracts and not on an open market, have increased three-fold in the past year
in market conditions which are expected to remain buoyant for the long term.
Recent quotes for tungsten concentrates have been reported by the Metal Bulletin
in the range $190-$220/mtu, with some reporters commenting that the demand for
tungsten products is increasing much faster than the supply can be developed.
This information is provided by RNS
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