New venture promise boosts mining minnows

Smaller mining companies Ormonde Mining (ORM) and Ariana Resources (AAU) were storming ahead on Tuesday as optimism over their new ventures with their larger partners gathered pace.
 
Junior exploration company Ormonde Mining's share price shot up 28% after it revealed that it was Antofagasta Minerals with whom it signed a joint venture covering Ormonde's La Zarza ground holdings in Southern Spain.
 
The company first made public its discussions with a "major mining company" in July but refrained from naming Antofagasta until today.
 
Work on the project is due to get underway immediately, with Antofagasta extending the previous exploration by Ormonde to span the entire 3km long La Zarza sulphide deposit in the Huelva Province.
 
Antofagasta, the wholly-owned subsidiary of FTSE 100 (UKX) Antofagasta plc (ANTO), will stump up $7 million on the exploration programmes, providing it with the right to earn a 51% interest in La Zarza over a three-year period. In its interim results, published just last month, the company hailed the investment as a highlight of the six month period.

Kerr Anderson, Ormonde's Managing Director, said: "We are very pleased that Antofagasta has chosen to become involved at La Zarza. Ormonde has previously concentrated its endeavours on the area of higher grade copper-gold mineralisation located within the eastern end of the much larger La Zarza massive sulphide deposit. 

"However, there are several exploration targets with significant potential for additional copper mineralisation within this massive sulphide body, and we very much look forward to seeing exploration drilling resuming at La Zarza."

John Meyer, analyst at Fairfax, added: "The deal with Antofagasta allows La Zarza to progress at no cost to Ormonde, whose value will be enhanced if work done by Antofagasta proves up an economic resource."

Fellow mining company Ariana Resources' share value gained almost 14% in morning trading before dipping slightly, after the company embarked on a joint venture agreement with Turkish construction firm Proccea Construction.

This will cover the Sindirgi and Tavsan projects with Proccea paying $8 million for its involvement.

Ariana, through its operating subsidiary Galata Madencilik, hopes the venture will "advance the company significantly towards its goal of becoming a long term gold partner."

The news buoyed spirits among Ariana traders on the Interactive Investor discussion board.

Captain Prozac remarked: "This is such good news. It shows a real commitment to progressing to the mining stage."

Fellow trader watcher2 echoed the sentiment: "Fantastic news! The markets should respond very quickly to this," while gazza950 summed up the feeling with: "This is great news for all and $8 million is twice the market cap of Ariana today."

Ormonde Mining's share price was pegged at 8.63p, while Ariana's share value rose to 4p.