Ormonde Mining plc has signed a conditional framework agreement for the €2.3 million sale of its interests in the La Zarza copper-gold project in Spain.
TRANSACTION
The transaction is with La Zarza Mineria Metalica S.L.U, a subsidiary of Spanish company Tharsis Mining S.L, which controls the mining rights to La Zarza.
The sale comprises Ormonde’s landholding, drill core and data assets associated with La Zarza.
The company added it had valued its La Zarza interests at €2m as at 31 December 2021.
There were no profits or losses attributable to the La Zarza assets for the year ended 31 December 2021.
SALE TERMS
Under the terms of the sale agreement, Ormonde will receive €800,000 on completion of the sale, with the balance to be paid in three equal payments of €500,000 on the first, second and third anniversaries of completion.
Ormonde will hold security over the deferred cash payments.
Shareholders will attend an extraordinary meeting on 28 September 2022 to vote on the sale.
OUTCOME
Chief executive Brendan McMorrow said that the sale would allow the company to look for new opportunities.
“Ormonde prepared a feasibility study for an underground mining operation at La Zarza in 2008 which highlighted the need for a larger resource to justify development.
“Progress thereafter has been impeded by the company owning the land but not the prospecting rights.
“To reach a sale agreement to release value from these assets at a premium to the book value is an excellent outcome for the company and its shareholders.
“It places the company on a stronger financial footing to acquire new projects in line with Ormonde’s strategy to generate shareholder value by leveraging its balance sheet and resources.”