Barruecopardo
Barruecopardo Tungsten Project

Ormonde’s 100% owned Barruecopardo Tungsten Project in western Spain is one of the premier undeveloped tungsten projects in the world outside of China:

  • Large & good grade - 27.39 Mt grading 0.26% WO3 (tungsten trioxide). 17.8 Mt Measured & Indicated and 9.59 Mt Inferred Mineral Resource categories (JORC-compliant)
  • Open pit mining to be based on a pit design containing Measured and Indicated Resources of 8.71Mt grading 0.32%WO3
  • Definitive Feasibility Study completed in 2012
  • Production rate of 1.1m tonnes per year, to produce an averaged 227,000 metric tonne units (mtus) WO3 per year for nine years (deposit open along strike and at depth – likely long life mine)
  • Forecasted annual net pre-tax operating cash flows of €29M at APT price of US$350/mtu
  • Low capital cost of €48.5M and cash operating costs of €99/mtu
  • Capital payback period of approx. 2 years at an APT price of US$350/mtu
  • 78% recovery to a 74.6% WO3 scheelite concentrate (industry standard: 65%) using simple gravity processing
  • Mining Concession received (Nov'14)
  • Offtake signed with Noble for 100% of the tungsten concentrate produced during the Projects initial five years (Apr'14)
  • Swedbank Norway appointed as Advisors in relation to a contemplated senior bond financing of approximately 50M euro
  • Find out more About Tungsten.


Location & Mineralisation

Barruecopardo is located in the Salamanca Province of the Castilla y León Region in North West Spain. The Project is a brownfield site, the deposit having previously being worked to shallow depths by a series of small open pit workings (30m depth) and one larger open pit (80m depth), from the early 1900s until 1982.

Barruecopardo is a steeply dipping, multiple zone mineralised system with a strike length of over 1.6km. The deposit is open at depth, with drilling to date having tested only the top 150-250m. Previous operations at Barruecopardo produced a clean, high grade, tungsten concentrate which was sold to tungsten metal processors.  Tungsten mineralisation occurs in quartz veins dominantly as coarse grained scheelite, with minor to trace wolframite which form part of a major granite-hosted sheeted vein system.


Mineral Resources

The current JORC mineral resource estimate (prepared by CSA Global, Dec'11) presently stands at 27.39 Mt grading 0.26% WO3 equating to 7.1 million metric tonne units (mtus) or 71,000 tonnes of contained WO3. Of this total, 17.8 Mt grading 0.29% WO3 (equating to 5.06 million mtus or 50,600 tonnes of contained WO3) is in the Measured & Indicated Resource categories, with an additional Inferred Resource of 9.59 million tonnes grading 0.23% WO3(equating to a further 2.2 million mtus or 2,200 tonnes of contained WO3).

The resource is presently drilled to an average depth of 200m and is open at depth along its presently defined 1.6km strike length, drilling to date yielding more than 10Mt per 100m of vertical depth. As such it is expected that the resource will expand considerably with deeper drilling and a long life mining operation is anticipated.  


Mining

Largely mechanised; initial production by open pit (9 year open pit life; Definitive Feasibility Study Feb'12) & subsequently by underground mining. Mining is facilitated by the::

  • steeply dipping nature of the deposit
  • regular geometry
  • competent ground conditions.

Initial open pit production rate of 1.1 million tonnes per annum (mpta), to produce 227,000 mtu WO3 per year over a nine year period (Definitive Feasibility Study).


Mineral Processing

Mineralisation is very coarse and is amenable to low cost gravity concentration.
Testwork has shown that crushing of feed to 5mm was sufficient to achieve effective liberation of the tungsten minerals for gravity pre-concentration.  Further testwork on the pre-concentrate has shown that upgrading by gravity, followed by flotation to remove any sulphides, produced a final tungsten concentrate assaying 74.6% WO3 (industry standard = 65%) with an open-circuit tungsten recovery of 71.8%.  A process plant recovery of at least 78% can be expected when treating a plant feed of 0.30% WO3.

 Processing will be via:

  • four stage crushing to -5mm
  • gravity concentration of heavy tungsten minerals by jigs and spirals
  • a very small clean-up and tabling circuit 

No primary grinding circuit and no tailings dam will be required and this will result in low capital and low operating costs. 


Costs

Capital Cost: €48.5M for a 1.1Mtpy operation
Cash Operating Cost (Open Pit): €99/mtu

Other Benefits

  • Excellent road infrastructure directly to site
  • Availability of local services and power supply
  • Strong local stakeholder support
  • Brownfields site


 


          Detailed Information top

          Location: Salamanca Province, Castilla y León Region, Western Spain, approximately 70km west of the city of Salamanca and 350 km west-north west of Madrid.  The central service town in the area is Vitigudino.

          Ownership: Ormonde has a 100% interest (10% of which is subject to staged payments) in six investigation permits in Salamanca Province, totalling some 272 square kilometres, with an application for further permits totalling 113 square kilometres. These permits are held by Saloro S.L.U, a wholly-owned Ormonde subsidiary. The permits are issued for an initial period of 3 years, renewable for further periods of 3 years upon submission of work programmes to the regional authority, the Junta de Castilla y León.

          Current Status: Environment Permit approved and awaiting granting of the Mining Concession by the Regional Mining Department.

          Mining History top

          The Salamanca Province is an area of substantial historic tungsten production and Barruecopardo was, until the early 1980s, the largest tungsten mine in Spain, producing a high quality tungsten concentrate from open-pit mining.  The original mining at Barruecopardo was via a series of small, up to 200m long, by typically 5m to 30m wide, very steep sided, largely non-mechanised, open pit workings. These mine workings were largely located on the Northern Western vein zone and on the southern portion of the main mineralised zone. Some workings also occurred on other zones including the Valdegallegos veins to the west of Barruecopardo. These surface operations were advanced downwards to depths of up to 30m, as depicted in the photo below (Fig-2).

          More recent mining, from the 1960s up until 1982, concentrated on developing the small open pit workings on the main southern portion of the mineralisation into a larger, 800m long by 100m wide, mechanised open pit operation (the Main Pit), which was accessed via a ramp and mined down to a maximum depth of 80m (Fig-3). The pit walls were semi-vertical and intermediate safety berms were not in general cut into these walls.  All material mined in the Main Pit was crushed in-pit (Fig-4), transported to surface by a conveyor located in an underground gallery and all material (both ore and waste) was processed through the gravity plant.  Figure-5 shows an oblique aerial view of the Main Pit, processing plant, mine offices and tailings dumps. The vertical pit walls, lack of safety berms, the unselective mining method and the material handling arrangements, all eventually created mining and economic issues which eventually forced a cessation of mining activities in 1982.  Figure-6 shows the presently flooded Main Pit.

          Geology & Mineralisation top

          The Barruecopardo deposit is contained within a major granite-hosted, sheeted vein system with a known length in excess of 1.6 kilometres, striking NNE and dipping steeply to the east.  Tungsten mineralisation occurs dominantly in narrow quartz veins, usually less than 10 centimetres in thickness, as coarse grained scheelite,with minor to trace wolframite and minor quantities of sulphides.  The zones of more intense veining can be up to 40 metres wide.

          Definitive Feasibility Study top

          A Definitive Feasibility Study has been completed for the Barruecopardo Tungsten Project (Feb’12) and was compiled with inputs from several international consulting engineering groups and contractors as set out in the table below.

          ComponentResponsible Consultant
          Mineral ResourcesCSA Global Ltd (CSA)
          Open Pit Optimisation & Mining ReservesCSA Global Ltd (CSA)
          Metallurgical TestworkWardell Armstrong International (WAI)
          Process Plant Design & Supporting InfrastructureJacobs
          Water ManagementATC Williams Pty Ltd (ATC)
          Environmental & SocialInternational Mining Consultants (IMC)
          Overall Project ManagementTJ Metallurgical Services (TJ Met)
          Financial ModelOrmonde Mining PLC (Ormonde)


          MINERAL RESOURCES

          The Mineral Resource Estimate was been prepared by CSA Global and reported according to the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code 2004 edition). The Mineral Resource Estimate includes all mineral resources at Barruecopardo, both within and outside of the optimised open pit shell.

          As disclosed in the Mineral Resource announcement by the Company on 13 December, 2011, CSA has classified the Mineral Resources in the Measured, Indicated and Inferred categories as follows:

          ClassificationTonnes (million)Grade (WO3%)Contained mtus (WO3)
          Measured5.470.341.86 million
          Indicated12.330.263.20 million
          Inferred9.590.232.20 million
          GLOBAL27.390.267.12 million


          A total of 77 holes totalling 15,241 metres of drilling have been used in the resource estimation. Grade compositing, used to define the mineralised volume, has been carried out using a minimum horizontal width of 4 metres at a minimum grade of >=0.06% WO3, allowing for internal dilution. This process defined areas of mineralisation that constitute potentially mineable widths at an economic grade. These resources are effectively diluted to mineable grade by this estimation procedure.


          MINING & ORE RESERVES
          Open pit optimisation on the mineral resource utilising a tungsten APT price of US$275/mtu was carried out leading to the preparation of a practical open pit mine design based upon the optimum shell and subsequent development of a life-of-mine (LoM) plan. The resulting mine design is for an open pit some 1,100 metres long, 390 metres wide and 185 metres deep.

          The mineral resources captured within the open pit are as follows:

          ClassificationTonnes (million)Grade (WO3%)Contained mtus (WO3)
          Measured4.970.351.72 million
          Indicated3.740.281.03 million
          Inferred0.820.220.18 million

          From the Measured and Indicated Resources, a Proven and Probable Mining Reserve has been defined (allowing for 5% losses and 5% dilution) totalling 8.69Mt, grading 0.30% WO3, broken down as follows:

          ClassificationTonnes (million)Grade (WO3%)Contained mtus (WO3)
          Proven4.960.331.64 million
          Probable3.730.260.98 million
          TOTAL8.690.302.61 million


          These reserves have been scheduled over a nine year mine life and the averaged stripping ratio of waste to ore from the open pit is 6.3:1. This gives a total of 63.1M tonnes of material (ore and waste) to be extracted from the open pit.

          In addition to these mining reserves, the open pit design contains a further 0.82Mt of Inferred Resources at a grade of 0.22% WO3, totalling 184,000 mtus of WO3. Some or all of this Inferred Resource may convert to feed for the process plant during the course of mine production.

          Mining will be carried out by conventional open pit methods using local contractors, adopting traditional “drill and blast” mining with shovel and truck operations. The new pit will comprise extensions to the historic main pit excavation to the north and south and at depth. Full mine production of 1.1Mtpa will be achieved following a one year ramp up period (0.7Mt in Year-1).

          It is planned that mineral resources below the open pit will be further evaluated for subsequent exploitation by underground mining, with underground development planned to commence in the latter years of the open pit operation.


          METALLURGICAL TESTWORK
          Metallurgical testwork has been carried out using composited drill core intercepts. This showed that crushing of feed to 5mm was sufficient to achieve effective liberation of the tungsten minerals for gravity pre-concentration. Further testwork on the pre-concentrate showed that upgrading by gravity, followed by flotation to remove any sulphides, produced a final tungsten concentrate assaying 74.6% WO3 (industry standard = 65%) with an open-circuit tungsten recovery of 71.8%. Analysis of the results indicates that a process plant recovery of at least 78% can be expected when treating a plant feed of 0.30% WO3. Tungsten recovery will in practice vary depending on the concentrate specification and pricing as required by different offtakers.

          Additional confirmatory testwork has been completed for details of the crushing and de-watering circuits (to finalise equipment sizing and configuration) and on possible refinements to the concentrate circuit.

          All other testwork and environmental characterisation tests necessary for the Feasibility Study have been completed.


          PROCESSING PLANT
          The design of the gravity processing plant and associated infrastructure has been completed based upon the results of the metallurgical testwork programmes and a “trade-off study” which assessed the economics of various process plant capacities. The final process plant design allows for a throughput of 1.1 million tonnes per annum (“Mtpa”) operating five days per week, to produce an averaged 227,000 mtus of WO3 per annum over the nine year life of the open pit.

          The gravity processing plant comprises three main components or stages:

          1. A four-stage 1.1 Mtpa crushing circuit to yield a 5mm crush size which WAI determined will achieve liberation of the tungsten mineral (scheelite) – as such no grinding circuit is required
          2. Screening of the crushed product at 1mm ahead of a gravity pre-concentration circuit consisting of jigs and spirals which treat the -5 to +1mm and -1mm size fractions, respectively, to produce a nominal 8,400 tonnes per annum of pre-concentrate
          3. A very small clean-up and tabling circuit, principally to remove the sulphides

          Stages 1 and 2 in the processing are predicted to result in some 98% of the initial feed to the plant being discarded prior to Stage 3 and stored as a dry stockpile with the mixed waste rock, with no tailings dam required.

          It should be noted that this proposed processing circuit is essentially very similar to that which was employed at the old Barruecopardo mining operation in the 1960 to 1980s. At that time, the Barruecopardo Mine sold a premium tungsten concentrate to European offtakers.


          WATER MANAGEMENT
          The water management system involves a Main Water Dam with a capacity of 760 million litres and smaller collection dams, which will be progressively constructed during the early years of mine production. The historical pit excavation will be de-watered by pumping to a Water Treatment Plant, in this way the project would be making use of a resource which is currently of little practical value, and ensuring that the project is self-sufficient in its water requirements and it is not a burden on other water supply sources in the area. Treatment costs will be minimal as metal concentrations in this water are very low.

          INFRASTRUCTURE
          Having previously operated as a mine, the project benefits from significant infrastructure already being in place, including roads and power lines close to the site. Upgrades to several of these will be required and have been included in the capital costs.

          Access to provincial, regional and International infrastructure is excellent, with good road and rail links to mainland Europe and various ports on the northern coast for overseas shipments.


          ENVIRONMENTAL, SOCIAL, PERMITTING & COMMUNITY
          Environmental Baseline reports include: fauna, vegetation, archaeology, climate, socio-economic and site clean-up. The Feasibility Study also includes a detailed closure and restoration plan.

          Final permitting documentation including the Environmental Impact Assessment (conforming to the appropriate Spanish Laws) was submitted to the Provincial Government (Servicio de Industria, Comercio y Turismo del Delegado Territorial de Salamanca de la Junta de Castilla y León) on 26 July 2012.

          The Barruecopardo project is located in an area and community which has a history of tungsten mining. Ormonde is committed to ensuring that the local community benefits from the re-commencement of mining at Barruecopardo by direct employment in the operation and indirectly through the use of local suppliers and services.


          CAPITAL COSTS
          The capital cost for the proposed 1.1Mtpa operation is broken down as follows:

          ITEMCOST (Euro M)
          Mining3.9
          Process Plant, associated Infrastructure and EPCM26.8
          Water Management System8.2
          Owners Costs5.2
          Contingency4.4
          TOTAL48.5


          OPERATING COSTS
          Life of mine cash operating costs are €23.31/tonne of ore processed, broken down as follows:

          ITEMEuro/tonneEuro/mtu
          Mining (ore)4.0717.3
          Mining (waste)14.4761.6
          Processing3.5014.9
          General & Administration1.275.4
          TOTAL COST23.3199.2

          Note: Stripping ratio of waste to ore = 6.3:1 and ore mining costs include grade control and re-handling costs

          Over the life of the open pit operation these costs equate to €99 per mtu processed (=US$129/mtu at the feasibility exchange rate of 1.30).

           

          PROJECT ECONOMICS

           Tungsten APT Price
           US$250US$350
          Base Case
          US$450
          Euro/US$1.301.301.30
          Pre-tax ungeared NPV (8% discount rate)€28M€120M€212M
          Pre-tax IRR19.9%52.0%80.3%
          Average annual pre-tax net operating cash flow€13M€29M€45M
          Pre-tax net operating cash flows over life of open pit€120M€261M€403M
          Capital Payback Period (Years)3.92.01.5

          Taxation, tax allowances and any available grants have not been included in the above financials.

          Regional prospects and targets top

          Valdegallegos Prospect: A separate tungsten system is located one kilometre to the west of Barruecopardo, the Valdegallegos Prospect. There are a number of old mine workings on the various veins within this system. One of two holes drilled into Valdegallegos yielded a high-grade intersection of 0.9m @ 2.7% WO. The drilling to date has been focussed on the Barruecopardo System, but follow-up drilling is planned for the Valdegallegos Prospect.

          Other Prospects: Several smaller historic tungsten workings and prospects, located on a large permit area around Barruecopardo, demonstrate the extent of the Vitigudino tungsten province in Salamanca (Fig-8).  Of these workings the most significant is Saturno, which comprises a NW-SE zone of tungsten and gold-bearing quartz veining ranging from 3 -8 metres in thickness. This zone was mined historically for tungsten to shallow depths (< 40 metres) by an open pit some 300 metres long.  There are few historic records available for this operation; however the vein system was investigated for its gold potential in the early 1980s through detailed sampling from the base of the pit and also by widely spaced drilling to test depth extensions of the mineralisation below the base of the pit.  Better drill intersections include 2.0m grading 1.2% WO3 and 7.4 g/t gold and 6.0m grading 0.3% WO3 and 1.0 g/t gold.