Ormonde Mining said today that test drilling for tungsten in western Spain had produced better-than-expected results, boosting shares in the Irish company by as much as 12 per cent.
Ormonde said that 12 of 15 holes drilled had uncovered good to high-grade tungsten along a 600 metre stretch below three shallow open pits, while another larger pit indicated deposits of the hard metal continued for another 700 to 800 metres.
"The results of the second stage drilling programme at Barruecopardo have exceeded expectations and confirm the presence of a high-grade continuous tungsten vein system," Ormonde Managing Director Kerr Anderson said.
The test data comes after the company said in May that early results from a follow-up drilling programme showed high-grade tungsten in two drill holes.
"A preliminary assessment suggests that the deposit has the potential to become a relatively simple, high-margin, underground mining operation utilising low cost gravity concentration processing," Anderson added in a statement.
Shares in the company were 12 per cent higher at 16.8 cents in Dublin by 10.54am while in London the stock gained more than 7 per cent to stand at 11.25 pence.
"These results give us comfort in our valuation and suggest further upside to our valuation range," Davy analyst James McCullough, who has a target price of 35 cents on the shares, wrote in a research note.
Tungsten trioxide levels as high as 2.4 per cent in samples taken compared "very favourably to those at other tungsten mining projects globally", he added.
The company said it had upgraded exploration to advanced project status and that a second drill rig would be brought in to fast-track evaluation of deposits of a metal used in making tools, weapons, light bulbs and the balls in ball-point pens.
Ormonde also said it would report results "shortly" from a mining feasibility study at its La Zarza project in southern Spain where the company said in February that tests had shown high-grade gold as well as silver, copper and zinc.