annual general meeting - ormonde...

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Annual General Meeting27 September 2018

Turnkey crush and screen plant - Barruecopardo Tungsten Project, Spain

ORMONDE MINING

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Disclaimer

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▪ Ormonde’s primary activity is through its 30% interest in the Barruecopardo Tungsten Project, Spain

o Mine construction well advanced and commissioning commenced

o Projected construction costs remain within €53.6M budget

o Initial production scheduled for Feb-19, followed by ramp-up phase to become a leading European supplier of primary tungsten, a critical industrial metal

▪ Other interests include:

o ~45% JV interest in Salamanca & Zamora Gold Projects

o Assets in the Pyrite Belt

o Gold exploration permit applications elsewhere in Spain

Summary

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Tungsten price - past 12 months

4Source: Metal Bulletin

Correction / consolidation following steep rise in Q3-17 (up from 2016 low of $160

Current range $275-290

Chinese production returns, weak trading

demand during summer, general fall in metal prices

Chinese environmental clampdowns – APT operating

rates ~50% Jan-Mar

Chinese New Year (mid-Feb)Ntl People’s Congress (5-Mar)

APT closures / reductions related to environmental

inspections in Jiangxi Province

Tungsten Outlook

▪ Generally positive supply-demand outlook:

o “Pricing momentum is forecast to accelerate in Q1 2019 on the back of potential Chinese government-enforced environmental inspections reducing tungsten supply during the period, as well as restocking activity early in the year and further improvement in demand from steelmakers.” Metal Bulletin, 21/9/18

o Restrictions on new mining permits, small-scale mines in China due to environmental issues, safety

o Global primary supply declining since 2015; development of new projects slower than expected, although some APT stocks held in China may enter the market at higher prices

o Tungsten demand correlates to global GDP growth, estimated at 3.9% for 2018 and 2019 (IMF)

▪ Cautious around macroeconomic developments including trade war tensions:

o APT not included in latest US tariff list, but impact of US / retaliatory tariffs on global growth unclear

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Project Outline Timeline

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September 2017 – Site overview and status

Workshop

Dam earthworks

Contractor area

• Ramp up of construction and implementation

• Advancing detailed engineering, procurement, major contract tenders

• Early construction works such as dams construction and site facilities (workshop)


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September 2018 – site overview and status

Main Water Dam

Dam A

HT Substation

Offices

ROM PadCrush & Screen

PlantProcess

Plant

Workshop

Water TreatmentPlant

✓ Crush & Screen Plant: Construction completed, in commissioning

✓ Process Plant: 80% complete, commissioning to commence Dec-18

✓ Water Management System: Dams complete; Treatment Plant in commissioning; pit dewatering underway

✓ Site Infrastructure & Services: Offices, workshop, laboratory, change rooms all operational; HT electrical line and substation complete and connected to grid


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Site Fly-Over Video


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Construction: Crush & screen plant complete

Secondary, tertiary & quaternary crushers

ROM (“Run of Mine”) stockpile

Primary crusher

Crushed ore stockpile & reclaim tunnel

Primary screen

Secondary screens

1.1 million tonnes per year of ore, blocks up to 80cm

Fine ore (up to 5mm) to process plant


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Construction: Process plant well advanced


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▪ High quality equipment suppliers including Metso, FL Smidth, Weir Minerals, IHC, Holman Wilfley, etc.

▪ Process pipework and electrical installations commenced

▪ Erection of preconcentration screen structure also underway

Preconcentration circuit – gravity separation using jigs & spirals:

▪ Crushed feed is screened, with material over 1mm size going to jigs, and below 1mm size going to spirals

▪ Both methods use the simple properties of water, gravity and the high density of scheelite to separate and concentrate the tungsten mineral – efficient, low maintenance, low cost

▪ Around 98% of the feed material rejected to produce a pre-concentrate of around 35% WO3 from a feed grade of 0.3% WO3


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Process plant installed equipment

Jigs: +1mm material Spirals: -1mm material


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Process plant installed equipment

Concentrate dryer & cooler

Shaking table

Upgrade circuit:

▪ Shaking tables to remove silicates

▪ Small flotation circuit to remove sulphides

▪ Tungsten concentrate then thickened, dried and cooled to produce a saleable product

▪ (saleable product 65% WO3, Barruecopardoconcentrates expected to be higher grade)

▪ Overall expected recovery rate at 0.3% WO3 ROM grade: >78%


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Commissioning in progress

✓ Crush & Screen Plant: Commissioning in progress

✓ Water Treatment Plant: Initial commissioning complete

✓ Water Pipeline: Commissioned, pit dewatering underway

✓ Process Plant: Early Dec-18 to Feb-19

ROM pad

Primary crusher

Crushed ore stockpile

Stockpile feed conveyor

ITEMEGM Circular

(Grouped)

Saloro Forecast

(31 Aug 18)Variance

€M €M €M

Capex (plus related VAT) 56.5 54.7 1.8-

Holding Costs, inc. Management & Monitoring Fees 8.1 11.8 3.7

Transaction Costs & Interest During Construction 7.5 7.9 0.4

Other Costs 6.0 7.0 1.0

Operating Working Capital 3.5 3.0 0.5-

Total Excluded Cost Overun Funding 81.6 84.3 2.7

Total Funding Package (US$99.7M) 90.4 90.4

Project Headroom 8.8 6.1 2.7-


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Funding status

▪ Capex inline with budget

o VAT refunds have been received ahead of forecast

▪ Higher mine group holding costs (including management fees) due to project stretch period

▪ Project headroom at end 31 August 2018 of €6.1 million


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Looking ahead: next 12 months

▪ Q4’18 – Q1’19:

o Process plant completion by Dec-18• Capex expected to remain on budget

o Commissioning of crush and screen plant, water management system, site services to be completed

o Production readiness activities, including:

• grade control drilling & modelling to facilitate detailed scheduling of first year of production

• updated cashflow forecasts for year one to take account of this schedule and other factors (mining contract, etc.)

• pit dewatering

• commencement of open pit mining

o Complete commissioning; initial production by early Feb-19

o Saloro’s first tungsten concentrates shipped

▪ Q2-Q4 2019:

o Production ramp-up period; Steady state production reached from early 2020 Preconcentration screen structure

being installed, Sep-18

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Annual General Meeting27 September 2018

Turnkey crush and screen plant - Barruecopardo Tungsten Project, Spain

annual general meeting - ormonde...

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