Ormonde Mining PLC Potential Divestment of the La Zarza Project (4416Y)
February 22 2013 - 2:00AM
UK Regulatory
TIDMORM
RNS Number : 4416Y
Ormonde Mining PLC
22 February 2013
22 February 2013
Ormonde Mining plc
("Ormonde" or "the Company")
Potential Divestment of the La Zarza Project
The Board of Ormonde Mining ("Ormonde" or "the Company") is
pleased to announce that it has entered into a binding Option
Agreement ("the Agreement") with Spanish company Nueva Tharsis SA
("Nueva Tharsis") that could, subject to the successful completion
of due diligence by 15 May 2013, lead to the divestment of the
Company's interest in the La Zarza Copper Project ("La Zarza").
Ormonde, through its wholly owned Spanish subsidiary Ormonde España
SL ("Ormonde España"), acquired a 100% interest in La Zarza from
Nueva Tharsis in 2007 subject to staged payments by OrmondeEspaña,
of which EUR1.3 million from a total of EUR2 million remains
outstanding.
Under the terms of the Agreement entered into between the
parties, Ormonde España will collaborate with Nueva Tharsis in the
planned disposal of the entire mining assets and interests of Nueva
Tharsis to a third party. In this regard, Ormonde has agreed to
contribute the entire share capital of Ormonde España to this
package for a total cash consideration of EUR5 million. Ormonde
does not expect any material transaction costs in relation to this
sale and on successful completion Ormonde would have no further
obligations in respect of the EUR1.3 million owed by Ormonde España
to Nueva Tharsis.
Four investigation permits held by Ormonde España along strike
from La Zarza, which were explored in 2011 and 2012 under an option
agreement with Antofagasta Minerals SA ("Antofagasta"), will be
transferred out of Ormonde España to another Ormonde subsidiary and
are not included in the Agreement with Nueva Tharsis. Ormonde
intends to seek another joint venture partner to further explore
this retained area.
Kerr Anderson, Ormonde's Managing Director, said:
"The potential sale of Ormonde España for EUR5 million, as part
of a larger package of mining assets being disposed of by Nueva
Tharsis, presents an opportunity for us. A successful due diligence
process and completion of the divestment would enable Ormonde to be
in a position to focus our management time and resources on the
development of our flagship Barruecopardo Tungsten Project and on
advancing our emerging gold projects."
Background
In 2004, Ormonde's wholly-owned Spanish subsidiary Ormonde
España entered into a joint venture agreement with Nueva Tharsis,
whereby Ormonde España could earn a 70% interest in La Zarza
through the expenditure of EUR1.8 million on investigation works at
La Zarza over a three year period. In 2007, following the
completion of the earn-in expenditure, Ormonde España and Nueva
Tharsis entered into a subsequent agreement whereby Nueva Tharsis
assigned a 100% interest in La Zarza to Ormonde España, and Ormonde
España acquired a 2.25% royalty interest held by Nueva Tharsis for
staged payments totalling EUR2 million, of which EUR1.3 million
remains outstanding.
A feasibility study was completed in 2008 on a potential
underground mining project at La Zarza, and recommended that the
possibility for further copper resources be investigated. Ormonde
España entered into an option agreement with Antofagasta in 2009,
whereby Antofagasta funded exploration activities with the aim of
identifying sufficient additional copper resources at La Zarza to
support a mining operation meeting their investment criteria.
Following exploration programmes carried out on La Zarza and
surrounding permit areas, Antofagasta withdrew from the agreement
in November 2012.
Activities funded by Antofagasta included the drilling of
several targets in 2012 on investigation permits granted to Ormonde
España in 2011 by the provincial authorities. Drill hole UC002 on
one of these targets intersected altered and brecciated volcanics
over an interval of 147 metres, with pyrite mineralisation
throughout but most intensely developed in the upper 40 metres. The
style and vertical extent of the mineralisation is that of a
stockwork. These permits will be transferred out of Ormonde España
to another subsidiary of Ormonde's and are not included in the
Agreement with Nueva Tharsis, and the Company intends to seek a
joint venture partner to further explore this new area.
In September 2011 Ormonde España jointly with Nueva Tharsis
presented a request to the Andalucia Regional authorities for the
reactivation of the Mining Concessions at La Zarza. This request
has been archived pending further information requested by the
Administration, with Ormonde España continuing to work through this
process to effect said reactivation, which is not a condition of
the transaction detailed above.
Ormonde will issue a further announcement in due course in the
event that this transaction proceeds and the disposal of its
interests in La Zarza is effected.
Enquiries to:
Ormonde Mining plc
Kerr Anderson, Managing Director Tel: +353 (0)1 8253570
Bankside Consultants
Simon Rothschild Tel: +44 (0)20 7367 8888 Mob: +44 (0)7703 167065
Murray Consultants
Ed Micheau Tel: +353 (0)1 4980300 Mob: +353 (0)86 803 7155
Davy (Nomad / ESM Adviser)
Eugenée Mulhern / Roland French Tel: +353 (0)1 6796363
ENDS
About Ormonde
Ormonde Mining Plc is admitted to trading on the AIM market in
London & the ESM market in Dublin. Ormonde is a mineral
development and exploration company focused on Spain (Ticker:
ORM).
Ormonde's key activities include:
Barruecopardo Tungsten - Ormonde is developing a low cost mining
operation at Barruecopardo to become a major, secure European
supply of tungsten.
La Zarza Copper- polymetallic massive sulphide deposit in the
prolific Iberian Pyrite Belt of southern Spain.
Gold Explorationin several highly prospective areas of western
Spain which includes its joint venture agreement with Aurum Mining
plc (AIM: AUR), where Ormonde currently has a 40% interest in the
Pino de Oro project in the Zamora Province and a 46% interest in
the Peralonso and Cabeza projects in Salamanca Province of western
Spain. Ormonde is Manager of the Joint Venture.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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