Exploration group Ormonde Mining, which yesterday reported a near doubling of its first-half loss, said its gold mine in Spain was on track to start production within the next two to three years.

Fraser Gardiner, a director at the Navan-based group said the company was pleased with its progress in the first half of the year and very positive about the outlook for metal prices.

"Over the last couple of weeks, gold has been strong and analysts in the industry see this continuing, with some expecting prices to reach as much as $500 an ounce," he said. "It shows great potential for our business."

Releasing its interim figures yesterday, Ormonde reported a loss of €201,000 in the six months to June, compared with a loss of €108,000 in the year-earlier period. Capital expenditure was just over €1 million, as the company continued to invest in La Zarza, its main mining project in Spain.

Ormonde is testing the quality of the minerals at La Zarza, which is located between Seville and the Portuguese border. The company has said the site has the potential to produce at least one million ounces of gold.

Mr Gardiner said its admission to London's AIM market and a capital raising of £3 million in April placed Ormonde in a good position. He said the group, which has six other Spanish sites, would consider any suitable acquisitions in Spain but had no plans to move into another country.