News

February 06, 2008

La Zarza Alive And Well, Says Ormonde, But Markets Aren’t Convinced

By Alastair Ford

“The project is alive and well.” That was the emphatic response of Ormonde Mining director Fraser Gardiner after London and Dublin sliced more than 20 per cent off his company’s market capitalisation. The sell-off came after Ormonde’s long-awaited feasibility study on the La Zarza copper-gold project in Spain delivered results that can best be described as inconclusive.

All in all, with nearly 10m tonnes grading 1 per cent copper, 1 per cent lead, 3 per cent zinc, 1.6 grammes per tonne gold, and nearly 39 grammes per tonne silver, La Zarza looks like a decent, interesting, and well-mineralised structure. The trouble is that the likely cost of turning that interesting structure into hard cash is much too high. Some time ago a scoping study showed capital costs as likely to be of the order of €30m to get La Zarza into production. But in the newly released...