Ormonde Mining is close to securing a deal with an unnamed company about exploration work at its La Zarza prospect in south-west Spain.
The project would seek to evaluate the potential copper mineralisation in the 3km-long sulphide deposits in La Zarza, in the Huelva province.
Ormonde said it was willing give the investor 51 per cent of revenues from La Zarza over a three-year period in return for a $7 million (€5 million) investment, with a minimum commitment of $1 million in the first year.
This stake can be increased to 75 per cent by the completion of a mining feasibility study if the exploration work is successful.
The deal is expected to be finalised in September subject to legal and environmental due diligence.
In a note to investors Davy’s said the potential to expand exploration and try to establish the presence of a much larger tonnage, lower-grade copper system had always existed but “limited financial resources meant that Ormonde has not been able to explore the licence fully”.
Davy’s added the proposed deal was an industry-validation of the quality of Ormonde's licence at La Zarza.
At 11.15am shares in Ormonde were up 12 per cent at 6.4 cent, giving the company a market capitalisation of €13.9 million.