16th May 2007 07:01
Ormonde Mining PLC16 May 2007 16 May 2007 Ormonde Mining plc Final Results for the year ended 31 December 2006 DUBLIN & LONDON: 16 May 2007 - Ormonde Mining plc ("Ormonde" or "the Company")announces its final results for the year ended 31 December 2006. MAIN POINTS • La Zarza advanced to Feasibility Study with the engagement ofwell-established engineering firms on the evaluation and design of anunderground mining operation which would produce copper, gold, zinc and silverin concentrates. • Significant progress made on Salamanca gold and tungsten properties, inparticular where high-grade tungsten has been intersected in drilling of thenorthern extension to the previously-mined Barruecopardo vein system, with anaggressive follow-up drilling programme in progress. • Reported loss of €597,267 - an increase on last year principallythrough the write-off of exploration expenditure. Mike Donoghue, Chairman of Ormonde commented: "The year 2006 was one of consolidation for Ormonde as the Company focussed onadvancing the La Zarza Project. The Feasibility Study currently in progress isbuilding upon the Scoping Study completed last September which demonstratedpositive economics for La Zarza. We have also taken significant steps forwardwith our tungsten and gold projects in Salamanca, where, whilst still in earlydays, recent drilling results should be seen as extremely encouraging". In addition to today's results, Ormonde announces the appointment of Bell Lawrie(part of Brewin Dolphin Securities) as its UK broker and financial advisor.Brewin Dolphin advises 154 corporate clients and manages £19 billion of funds onbehalf of over 100,000 private clients. They have extensive experience inproviding corporate advisory and broking services to smaller companies,operating from offices throughout the UK. Enquiries to: Kerr Anderson, Managing Director,Ormonde Mining plc Tel: +353 (0)46 9073623 Fraser Gardiner, DirectorOrmonde Mining plc Mobile: +353 (0)86 3931178 Simon Rothschild,Bankside Consultants Tel: +44 (0)20 7367 8871 CHAIRMAN'S STATEMENT OVERVIEW The year 2006 was a period of consolidation for Ormonde as the Company focussedon advancing its La Zarza Copper-Gold Deposit in Spain through Scoping Study andonwards into Feasibility Study and commenced the detailed evaluation of the goldand tungsten occurrences in the extensive ground holdings the Company has puttogether in the Salamanca Province of Spain. OPERATIONAL HIGHLIGHTS La Zarza The Scoping Study completed in September demonstrated positive economics for aproposed underground mining operation at La Zarza, producing copper, gold, zincand silver in concentrates. This exercise led on into the Feasibility Studystage, a period when progress takes the form of detailed internal work andmarket newsflow is invariably slow. Four well-established engineering firms arepresently progressing with the Feasibility Study, which encompasses theevaluation of the La Zarza resource, detailed underground mine design, follow-updefinitive metallurgical testwork, processing plant design and infrastructureand tailings management design. The Silicatado resource infill drilling programme was completed towards the endof the year and a further drilling programme on the Zinc Massive Sulphide(Zn-MS) is presently underway. This latter resource has emerged as a result ofnew drillhole intersections in the massive sulphide and a reinterpretation ofthe zinc-dominant mineralisation within this very extensive unit. Metallurgicaltestwork on this Zn-MS unit is also in progress. While we must await the resultsof the evaluation of this zinc resource, the potential when combined with theadjacent Silicatado unit has favourable implications for the project. Work on La Zarza during the remainder of 2007 will focus on enhancing the globalresource, finalising designs and capital and operating costs, and completing theFeasibility Study for a mining operation at La Zarza. Preliminary permittingsubmissions and discussions with the regional and provincial authoritiescontinue in tandem with the evaluation work. Salamanca The Salamanca Project, where the Company is exploring a considerable area oflicences, has over the last year become the second focus of Ormonde's work inSpain. While first stage exploration of both gold and tungsten targets and oldworkings is likely to continue for quite some time, two prospects of particularinterest, Barruecopardo and Pino de Oro, have already emerged. The northern extension to the previously-mined Barruecopardo tungsten veinsystem was investigated by widely spaced drilling in 2006. The results of thisdrilling were most encouraging, with high-grade tungsten intersected within amain vein structure. Initial assay results from an ongoing follow-up drillingprogramme suggest that there is continuity in the high-grade tungsten withinthis main vein structure. The controlling structure appears to have a strike length of approximately 1400mwithin competent granite rocks. To date, drilling has indicated a steeplydipping mineralised zone of veining some 1 to 5 metres wide, over at least a500m strike length, yielding intersection grades which include 2.1% and 1.5%tungsten (WO3) over 2m widths. In assessing these grades it should be notedthat the Panasqueira Tungsten Mine in Portugal operates profitably at a grade of0.23% tungsten. These new drilling results are deemed most encouraging, although it should bestressed that much further drilling needs to be completed to establish theaverage grade of the deposit, the continuity and extent of the mineralisation,investigate other adjacent vein structures in the area, and determine if aneconomic sized resource exists at Barruecopardo. However, it is encouraging tonote that the tungsten price continues to remain strong having increased almostfour-fold in the past two years. Looking at the larger picture within the overall Salamanca licence area, itshould be noted that there are a significant number of gold and tungstenoccurrences and old workings in the area and the potential exists to build up aneconomic resource from these smaller lode-vein deposits. As such, the Company'sstrategy is to continue exploration on a wide front with the objective ofdefining a number of these types of deposit which might be managed and processedthrough a central plant. In pursuing this latter strategy it is also encouraging to note that on-goingexploration work has already resulted in initial positive results from the Pinode Oro gold prospect, some 80km north of Barruecopardo. Previous drilling bythe Government at Pino intersected narrow but high-grade gold vein structures(e.g. 1.0m grading 65.8 g/t and 2.0m grading 11.1 g/t gold). Initial resultsfrom holes drilled by Ormonde have confirmed the presence of these high-gradestructures (1.0m grading 16.6 g/t gold), with results pending from severalholes. CORPORATE DEVELOPMENTS In order to strengthen our presence on the AIM Market, broaden our shareholderbase and improve trading liquidity, we are very pleased that Bell Lawrie, adivision of Brewin Dolphin Securities, has agreed to become the Company's UKbroker and financial advisor. The Board is most appreciative of Seymour Piercefor its endeavours since assisting with our listing on AIM in 2005, and we hopethat they will continue to follow our progress. Davy will continue to be ourIrish broker, IEX advisor and Nomad. Mr. Andrew Bell, as a consequence of his increasing commitments towards a numberof exploration companies he is now involved with, resigned from the Board ofOrmonde in January. I would like to take the opportunity to thank Andrew for hiscontribution towards the growth of the Company over the past 3 years. FINANCIAL REVIEW During 2006 the Company expended a total of €3.0 million, of which €1.4 millionwas on the La Zarza project and €1.0 million on exploration activities elsewherein Spain. We reported a loss of €597,267 for the year (2005: a loss of€420,850), €82,100 being a write-down of work where exploration efforts havebeen unsuccessful and no further work is warranted. In closing, I would like to thank the shareholders, staff and advisors for theircontinued support in pursuing our Company objectives. Michael J. DonoghueChairman16 May 2007 Consolidated Profit & Loss AccountYear ended 31 December 2006 2006 2005 €000's €000's Administrative expenses (601) (451)Exploration costs written off (82) -OPERATING (LOSS) (683) (451)Interest receivable 83 30(LOSS) ON ORDINARY ACTIVITIESBEFORE TAXATION (600) (421)Tax on (loss) on ordinary activities - -(LOSS) ON ORDINARY ACTIVITIESAFTER TAXATION (600) (421)Minority Interest 3 -Retained (loss) for year (597) (421)(Loss) per Share (€0.0037) (€0.0029) Consolidated Statement of Total Recognised Gains and LossesYear ended 31 December 2006 2006 2005 €000's €000's (Loss) for the financial year (597) (421)Currency translation differences onforeign currency net investments (1) 3Total recognised gains and losses (598) (418) Consolidated Balance SheetAs at 31 December 2006 2006 2005 €000's €000's FIXED ASSETSTangible assets 10 19Goodwill 231 112Intangible assets 5,783 3,555 6,024 3,686 CURRENT ASSETSDebtors 593 571Cash at bank and on hand 3,391 1,891 3,984 2,462CREDITORS: (amounts falling duewithin one year) (310) (236)NET CURRENT ASSETS 3,674 2,226 TOTAL ASSETS LESS CURRENT LIABILITIES 9,698 5,912 CREDITORS: (amounts falling dueafter more than one year) - -NET ASSETS 9,698 5,912 CAPITAL AND RESERVESCalled-up share capital 5,885 5,483Share premium account 14,347 10,360Capital conversion reserve fund 29 29Capital reserve 7 7Foreign currency reserve 3 3Profit and loss account (10,570) (9,972)SHAREHOLDERS' FUNDS 9,701 5,910 Minority interest (3) 2 9,698 5,912 Consolidated Cash Flow StatementYear ended 31 December 2006 2006 2005 €000's €000's NET CASH (OUTFLOW) FROMOPERATING ACTIVITIES (537) (821) RETURNS ON INVESTMENTS ANDSERVICING OF FINANCE Interest received 83 30 NET CASH INFLOW FROM RETURNS ONINVESTMENTS AND SERVICING OF FINANCE 83 30 CAPITAL EXPENDITURE ANDFINANCIAL INVESTMENTSale of tangible asset - 18Expenditure on intangible assets (2,431) (1,759)Payments to acquire tangible assets (3) (25) NET CASH (OUTFLOW) FROM CAPITALEXPENDITURE AND FINANCIAL INVESTMENT (2,434) (1,766) NET CASH (OUTFLOW) BEFORE FINANCING (2,888) (2,557) FINANCING Issue of shares net of expenses 4,388 4,004NET CASH INFLOW FROM FINANCING 4,388 4,004INCREASE IN CASH 1,500 1,447 1. The loss per share was calculated from the loss for the periodattributable to ordinary shareholders of €597,267 (December 2005 = €420,850)divided by the time-weighted average number of shares in issue during the periodof 162,488,775 (December 2005 = 143,204,927). There is no dilutive effect ofshare options on the basic loss per share. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
ORM.L