RNS Number:3798N
Ormonde Mining PLC
06 February 2008
06 February 2008
Ormonde Mining plc
Ormonde Reports La Zarza Feasibility Study
DUBLIN & LONDON: 06 February 2008 - Ormonde Mining plc ("Ormonde" or the "
Company") reports results received from the feasibility study (the "Study") on
its La Zarza Project in the Huelva Province, southern Spain. The Study was
carried out by internationally recognised consultants under the management of
Aker Kvaerner Engineering Services Ltd, and evaluated an underground mining
project at a 600,000 tonne per year ("tpy") production rate.
The Study provides a mining plan and process plant design to access the
considerable revenue potential of the metals in the La Zarza deposit, and
outlines a route designed to deliver saleable concentrates at good recovery
levels of contained metal. The capital cost estimate in the case of the 600,000
tpy production rate is higher than anticipated, and in particular, this includes
a higher than normal proportion of fixed capital costs. However the Study also
makes key recommendations, which the Company is following with a view to
maximising the returns from La Zarza. Consequently, using the considerable
design data now available, Ormonde is evaluating two alternative development
strategies as follows:
* An increase in the production rate through an enlargement of the mineral
resource, based upon extensions to the thick zinc mineralised intersections
identified in last year's drilling (reported November 2007);
* A reduction in capital costs; this may include an option for a more
focussed initial development resulting in staging of capital investment.
Kerr Anderson, Managing Director, said:
"The current Study has shown that we have further work to do to maximise the
return from La Zarza. We will therefore be following up on the Study's
recommendations, aiming to improve the Project's debt capacity and economics and
to identify the best development path to deliver optimum value from the Project.
These studies will continue in tandem with our work to rapidly progress the
Barruecopardo Tungsten Project."
The salient points from the current Study are:
* Independent estimate of Indicated Resources totalling 9.9 million
tonnes as follows:
Copper Silicatado Mineralisation
2.6Mt grading 2.1% Cu, 0.5% Pb, 1.5% Zn, 30 g/t Ag and 0.9 g/t Au
Gold Silicatado Mineralisation
2.6Mt grading 0.6% Cu, 1.5% Pb, 2.1% Zn, 53 g/t Ag and 3.7 g/t Au
Massive Sulphide Mineralisation
4.7Mt grading 0.6% Cu, 1.0% Pb, 4.3% Zn, 36 g/t Ag and 0.9 g/t Au
* The 600,000 tpy production case calls for an underground mining operation
with a flexible process plant capable of treating four mineralisation
feeds and producing copper, gold, silver, zinc, and lead in four saleable
concentrates.
* The majority of the paste tailings would be placed underground as backfill
material to limit surface disposal requirements and the balance sent to
a surface storage facility.
* Capital costs estimated at Euro86 million, with details being:
- Euro73 million for the processing plant, tailings management
facility and infrastructure
- An additional Euro13 million for initial mining development
and working capital
- the full extent of a contingent provision of Euro12 million for dewatering
of the old underground workings has also been allowed for, but further
work is required to assess the application of this contingency.
The main recommendations made in the Study Report are:
* "The Project has shown to be capital intensive, however a larger than
normal proportion of capital exists as a fixed capital component which would
not vary with increasing scale of operations. This fixed capital would
include the historic mine water treatment costs and certain infrastructure
costs. The Project would likely benefit from an increase in the scale of
production ....... recent exploration successes in the Lower Massive
Sulphide Zone, as reported by Ormonde in November 2007, may provide
opportunities for such an increase in project scale with an assessment of
this possibility being recommended."
* Reduced capital cost development options may exist for the Project and it
is recommended that these options be further explored.
Mineral Resource Statement
The Mineral Resource Estimate has been prepared by CSA Australia Pty Ltd and is
reported under the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (The JORC Code 2004 edition). The Mineral
Resources are as follows:
Indicated Resources
CATEGORY Cut-off Mt Cu % Pb % Zn % Au g/t Ag g/t
Copper Silicatado 1.5% Cu 2.64 2.1 0.5 1.5 0.9 30.2
Gold Silicatado 2.0g/t Au 2.55 0.6 1.5 2.1 3.7 52.6
Zinc Massive Sulphide 3.5% Zn 4.39 0.6 1.0 4.4 0.8 35.2
Copper, Zinc and Gold 0.28 0.9 1.0 2.9 2.1 53.0
Massive Sulphide
Total Indicated 9.88 1.0 1.0 3.0 1.6 38.9
Inferred Resources
CATEGORY Cut-off Mt Cu %
Copper Massive Sulphide 1.5% Cu 1.30 1.9
(West)
The La Zarza Mineral Resource estimate was completed under the overall
supervision and direction of Mr Gerry Fahey MAusIMM (CP), MAIG, who is a
Competent Person as defined by the JORC Code (2004 Edition) and who consents to
the inclusion in this report of the matters based on his information in the form
and context in which it appears.
Feasibility Study
Mineral Processing
The extensive metallurgical testwork carried out as part of the Feasibility
Study resulted in considerable advances in the ability to produce relatively
clean copper-gold, copper, lead and zinc concentrates at good recoveries from
the four mineralisation types at La Zarza included in the Study. This testwork
also indicated that a viable paste backfill may be produced from the finely
ground tailings. The process plant design arising from the testwork is for a
conventional comminution circuit comprising primary and secondary crushing
followed by a three stage primary grinding circuit. This 600,000 tpa capacity
circuit comprises rod and ball milling followed by stirred mill detritors.
Milling circuit discharge feeds into three sequential differential flotation
circuits, each of which has facilities for regrinding followed by concentrate
thickening and pressure filtration to yield four saleable concentrate types.
A paste tailings and backfill plant is incorporated into the processing plant
design.
Mining
While it is expected that the underground mine would have negligible
ground-water inflow during operations, the old workings are presently flooded
and dewatering is required prior to underground development. In estimating the
extent of this exercise, it was necessary to assume that the La Zarza workings
will have a direct hydraulic connection to the adjacent, flooded, Perunnal Mine.
Sampling to estimate the pH and metal content of the water in the old workings
yielded very variable results. It was necessary to assume the more adverse metal
concentrations in the water when designing the water treatment plant.
The underground mine is designed for surface decline access and ore
transportation by trucks at a rate of up to 600,000 tpy. Ground conditions in
the mine are known to be very good. Underground development would be by
mechanised diesel-hydraulic mobile plant. Ore would be mined using longhole and
bench open-stoping mining methods, with use of paste backfill to minimise
surface tailings and maximise ore recovery.
Capital Costs
Capital costs have been estimated at Euro86 million based upon a flexible process
plant design to accommodate four distinct feed types and the production of four
saleable concentrates. In addition allowance has been made for a contingent
provision of Euro12 million for mine dewatering and water treatment to neutralise
the water and remove the dissolved metals. The processing plant and site
infrastructure and tailings are estimated to cost Euro73 million.
Kerr Anderson PhD EurGeol PGeo, Managing Director of Ormonde Mining plc, and a
qualified person as defined in the Guidance Note for Mining, Oil and Gas
Companies, March 2006, of the London Stock Exchange, has reviewed and approved
the technical information contained in this announcement.
A glossary explaining technical terms contained in this announcement can be
found at www.ormondemining.com/projects/glossary.html.
Enquiries to:
Ormonde Mining plc
Kerr Anderson, Managing Director,
Fraser Gardiner, Director
Tel: +353 (0)46 9073623
Bankside Consultants
Simon Rothschild / Louise Mason Tel: +44 (0)20 7367 8888 Mob: +44 (0)7703 167065
Davy (Nomad / IEX Adviser)
Fergal Meegan Tel: +353 (0)1 6796363
Brewin Dolphin (UK Adviser)
Gordon Culfeather Tel: +44 (0) 141 314 8121
ENDS
About Ormonde
Ormonde Mining plc is quoted on the AIM in London and the IEX in Dublin.
Ormonde is a mineral development and exploration company focused on Spain, with
the objective of developing mining projects and taking them into production.
For more information please visit www.ormondemining.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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