Ormonde Mining has secured funding for its Barruecopardo tungsten prospect in Salamanca.

US investment group Oaktree has agreed to provide $99.7 million (€90.4 million) which the Irish listed mining group says will cover the development of the Spanish site and part-fund a second stage evaluation of potential underground expansion of the mine.

Oaktree will pay $44.2 million for a 65 per cent stake in the project as well as providing $55.5 million in debt financing. It will receive a further 5 per cent stake in the project in return for the debt facility.

Ormonde will retain a 30 per cent interest in the mine through a new joint venture entity. The company will also receive a €1 million annual management fee which, it says, will cover current working capital requirements.

Kerr Anderson, managing director of the group which is listed in Dublin and London, said: “The $99.7 million project financing, committed by Oaktree, provides funding certainty and enables the development of Barruecopardo in the short term.”

In light of the Oaktree agreement, the company also announced that it was rejecting a takeover approach from Canadian tungsten mining group Almonty Industries.

Almonty had proposed the equivalent of 4.25p sterling in cash and shares.

Ormonde said it had a number of concerns in respect of the reported reserves, projected mine life, negative net cashflows from operations, and existing debt profile of Almonty and its operations. The board said it was not confident that Almonty is capable of executing its proposal, even were it to make a proposal at a level which was capable of recommendation.

In a statement , the board also noted that Almonty approached the company in 2013 but ultimately failed to make an offer.

Ormonde has spent the past two years trying to put in place the funding needed to develop the Salamanca prospect. In February, it entered exclusive negotiations with Oaktree.

Details of the funding plan require shareholder approval and the company announced yesterday that it will hold an extraordinary general meeting on May 19th.