Lossses at Ormonde Mining up seven fold after disposal of mine
Company ran into difficulties at a tungsten mine in Spain where it had an interest of 30%
The Ormonde Group reported a loss after tax of €11.3 million compared with a loss of €1.65 million for 2018.
Losses at Irish-listed mineral resource company Ormonde Mining swelled almost seven fold last year as it forced to dispose of its interest in a tungsten mine in Barruecopardo, Spain.
In its annual report for the year ended December 31st, 2019, published on Monday, the Ormonde Group reported a loss after tax for the year of €11.3 million compared with a loss of €1.65 million for 2018.
Loss from continuing operations totalled €900,000 compared with €1.62 million the year before, whereas a loss from discontinued operations came to €10.4 million, which was up from €26,000 in 2018.
This loss related to the disposal of Ormonde’s interest in the tungsten mine. The group’s executive chairman Jonathan Henry said 2019 “proved to be a difficult year” for the mine. The company had held a 30 per cent interest in it with Oaktree Capital Management.
Mr Henry said the mine’s ramp-up hit “a number of operational issues”. The related financial impact was initially addressed through an additional €10 million debt facility provided by Oaktree.
However, this proved to be inadequate, and when an additional and significant capital requirement was tabled by the Spanish operating company Saloro in late 2019, Ormonde decided shareholder value would be best preserved by disposing of its interest.
This was agreed in January and Ormonde received a net cash consideration of €6 million.
Mr Henry said the company was now focused on identifying and assessing potential investment opportunities in the resource sector.
“As at the time of writing, the company has reviewed over sixty projects across a wide spectrum of commodities and jurisdictions, with most having been ruled out under objective criteria,” he said.
“However, a small number of these opportunities remain promising, being of an appropriate scale whereby our cash would be meaningful, and when brought together with the asset could have a high impact over the short to medium term with the potential to add materially to shareholder value.”
Total remuneration to the three directors during the year was €145,000. They did not recommend the payment of a dividend.