Ormonde Mining Finalizes Financing Agreement for Barruecopardo Project in Spain

Ormonde Mining Plc. (LSE:ORM) announced it has finalized the financing arrangements with OCM Luxembourg Tungsten Holdings S.À R.L. for the development of its flagship Barruecopardo tungsten project in Salamanca, Spain, with funds being managed by Oaktree Capital Management.

As quoted in the press release:

• Under the Financing Oaktree has committed to provide a total of USD 99.7 million (€90.4 million), which secures the full funding for the development of Barruecopardo, together with a significant budget to conduct the early evaluation of a potential underground mining Stage 2 expansion of the Project.
• The Financing is split favourably between a large component of project equity of USD 44.2 million (€40.1 million) and project debt of USD 55.5 million (€50.3 million).
• For the provision of the equity component, Oaktree shall be entitled to a 65% interest in the Project, with an additional 5% interest being consideration in relation to the provision of the debt facility, to result in a 70% Oaktree interest, to be held through a new company, Barruecopardo Joint Venture B.V. (“Barruecopardo JV”), with Ormonde holding a 30% interest.
• The debt facility includes flexible repayment terms which would allow for: o cash to be retained within the business and applied towards the fast track development of an eventual underground mining Stage 2 expansion. o the option of dividends to be distributed to Oaktree and Ormonde during the term of the facility.
• A shareholder agreement, which governs Barruecopardo JV, details a number of important decisions requiring the consent of both parties, providing a number of minority protections for Ormonde.
• Ormonde will receive an annual management fee of €1.0 million for services to be provided to the Barruecopardo Project under a management services agreement. This fee will cover Ormonde’s current working capital requirements.
• The Financing also provides funds to allow Ormonde repay the USD 1.5 million working capital loan facility provided by Oaktree under a loan agreement entered into in February 2015.

Kerr Anderson, managing director of Ormonde Mining, commented:

The USD 99.7 million project financing, committed by Oaktree, provides funding certainty and enables the development of Barruecopardo in the short term. The substantial USD 44.2 million of equity being provided by Oaktree, and flexible USD 55.5 million debt facility, together with the provision of an annual management fee which funds Ormonde Mining plc’s working capital requirements, preserves for Ormonde Shareholders both value and significant upside exposure to the Barruecopardo Project and the broader tungsten market. We would recommend that Shareholders vote in favour of the transaction at the upcoming EGM, enabling Ormonde to progress as part of a well-capitalised, industry significant, and long-life European tungsten mining operation.

Click here to read the full Ormonde Mining Plc. (LSE:ORM) press release.