TIDMMIRL
RNS Number : 4868A
Minera IRL Limited
30 March 2012
Minera IRL Announces 2011 Year-End Results
London and Toronto, 30 March 2012: Minera IRL Limited ("Minera
IRL" or the "Company"), (TSX:IRL) (AIM:MIRL) (BVL:MIRL) the Latin
America gold mining company, is pleased to announce today its
audited results for the year ended 31 December 2011 and outlined
Company developments during the same year.
2011 Highlights (all $ denominates US$ unless otherwise
stated):
Financial
-- Record sales revenue in 2011 of $53.0 million, up 29.0% (2010: $41.1 million)
-- 2011 gold sales of 33,718 ounces, up 1.4% (2010: 33,240 oz)
with realised gold price of $1,570/oz, up 27.5% (2010:
$1,232/oz)
-- EBITDA up 79% to $24.8 million (2010: $13.8 million)
-- Profit before tax up 146% to $16.1 million (2010: $6.5 million)
-- Total income after tax up 237% to $9.6 million (2010: $2.8 million)
-- Cash balance of $11.1 million as at 31 December 2011 (December 2010: $34.6 million)
Operations and Development
-- Corihuarmi, Peru
o Gold production up 2.2% to 33,255oz (2010: 32,533oz) the
highest annual gold production since the first year of operation in
2008
o Site operating costs up 7% to $410/oz (2010: $383/oz) due to
an increase in ore mined
-- Don Nicolas, Argentina
o August 2011 - an upgraded resource statement of 382,000oz in
the Measured and Indicated category (5.6 Mt at 2.1g/t gold) plus
145,000oz in the Inferred category (3.1 Mt at 1.5g/t gold), with a
Measured and Indicated high grade component of 1.5 Mt at 6.0g/t
containing 280,000oz which forms the basis for the Don Nicolas
Feasibility Study
o Subsequent to the year end, February 2012 - completion of a
positive Don Nicolas Feasibility Study in Patagonia. Based on a
gold price of US$1,250/oz, NPV (7% real) of US$40 million (pre-tax)
and US$22 million (post tax); an IRR (real) of 34.6% (pre tax) and
22.8% (post tax) and a payback period of 2.0 years (post tax)
-- Ollachea, Peru
o July 2011 - Pre-feasibility Study completed and indicated a
robust project that is expected to produce over 1 Moz during a 9
year mine life. Using a gold price assumption of $1,100/oz, the
project generates a NPV (7% real) of $226 million (pre tax) and
$133 million (post tax), an IRR (real) of 28.1% (pre tax) and 20.5%
(post tax) and a payback period of 3.8 years (post tax)
o September 2011 - maiden Inferred Mineral Resource announced
for the Ollachea Project's Concurayoc Zone of 10.4 Mt at 2.8g/t for
0.9 Moz of gold
o In the third quarter 2011, the Company committed to the
development of the 1.2km Ollachea exploration tunnel, with the
first cutting of the tunnel occurring in February 2012. The
exploration tunnel is expected to be completed by early 2013
Other
-- Subsequent to the year end, the Company completed an equity
raising for gross proceeds of approximately CAD33.1 million by
issuing 29,260,000 ordinary shares at CAD1.13 per share (equivalent
to GBP72p based on exchange rate at pricing)
"2011 was another excellent year for the Company with a
substantial increase in profit, compared to 2010, underpinned by
record gold sales revenue," said Courtney Chamberlain, Executive
Chairman of Minera IRL. "The recently completed equity offering
places the Company in a strong position to advance the development
of its Ollachea and Don Nicolas Projects, and to fund substantial
exploration programs in 2012."
Financial Results
Production from the Corihuarmi Gold Mine was slightly higher
than 2010 and yielded a record sales revenue of $53.0 million
(2010: $41.1 million). The increase in revenue compared to 2010 was
due to the average gold price from spot sales increasing from
$1,232 per ounce to $1,570 per ounce. Mining and treatment of 37.5%
more ore in 2011 contributed to an increase in the cost of sale to
$28.0 million (2010: $23.3 million). The combined effect was an
increased gross profit to $25.0 million (2010: $17.8 million).
Administration expenses of $8.2 million were slightly higher than
the prior year (2010: $7.8 million). This, combined with the
stronger gold price, resulted in an increased operating profit of
$16.4 million (2010: $7.2 million). The income tax expense, which
arises solely in Peru, increased to $6.3 million (2010: $4.3
million) with the increase in profit before tax in Peru. The
Company's profit after tax increased to $9.8 million (2010: $2.2
million).
The group spent a total of $35.7 million on development &
exploration during the year (2010: $22.3 million) of which $34.7
million was added to the intangible assets of the group ($18.4
million for the Ollachea project) and $1.0 million was recognised
as a cost in the profit or loss.
At the end of 2011 the group had a cash balance of $11 million.
In March 2011, the Company raised gross proceeds of CAD33.1 million
in equity leaving the Company in a strong position to continue with
its exploration and development programmes.
Projects
Corihuarmi Gold Mine
The Corihuarmi Gold Mine, located in the Peruvian high Andes,
continued to perform well throughout the year, generating record
sales from a gold price which averaged $1,570 per ounce, $338 per
ounce higher than the previous year. A total of 33,255 ounces was
produced, which was 16% above budget and the highest annual gold
production since the first year of operation in 2008. Cash
operating cost averaged $410 per ounce. The Company made a seamless
conversion from contractor mining to owner mining at the beginning
of the year and mining of scree (broken rock below the cliff faces)
began supplementing ore mined from the pits.
Corihuarmi has now produced over 150,000 ounces of gold in less
than four years of production at an average cash operating cost of
$300 per ounce. This is well in excess of the estimate in the
feasibility study to produce 112,000 ounces over a four year mine
life. Corihuarmi has produced much of the cash requirements needed
to grow the Company, and has also cemented Minera IRL's reputation
as an efficient mine developer and operator even under arduous
conditions. Although production at Corihuarmi is expected to
decrease and costs rise in 2012, the mine will continue to generate
strong cash flow over the remaining life, which has been extended
until at least mid-2015.
Ollachea
Several milestones were reached at Ollachea, Minera IRL's
flagship project in southern Peru.
Exploration and in-fill drilling has been continuous with two
diamond rigs on the project since October 2008 with, at the time of
writing, more than 75,000 meters drilled from more than 194 holes.
This orogenic type gold discovery was recognized as a deposit of
international standard by NewGenGold, a group that researches and
identifies the top new gold discoveries in the world. The result
was an opportunity for the Company to present a paper on the
deposit at the NewGenGold biannual international conference in
November 2011.
The drill defined resource at Ollachea increased substantially
in size and quality in 2011. The Indicated Resource, all in the
Minapampa zone, now stands at 10.4 million tonnes grading 4.0g/t
containing 1.4 million ounces of gold. The Inferred Resource,
boosted by a maiden resource of over 0.9 million ounces at
Concurayoc only 400 meters to the west of Minapampa, increased to
13.7 million tonnes grading 2.8g/t containing 1.2 million ounces of
gold. The deposit remains open and untested along strike in both
directions as well as down-dip.
The Ollachea Pre-feasibility study was completed in mid-2011 and
produced very encouraging results. This study indicated a viable
mine that will produce over 1 million ounces during a nine year
mine life at an average cash operating cost of $436 per ounce. The
base case financial model assumed a gold price of $1,100 per ounce;
on that basis the life-of-mine post tax cash flow was estimated at
$280 million, the NPV (at 7% discount) was $133 million, an IRR of
20.5% and a pay-back period of 3.8 years. With these positive
results, the Company embarked on a full feasibility study which is
expected to be completed during the second half of 2012. Permitting
will then ensue, followed by the commencement of mine development
with the objective of bringing Ollachea into production in late
2014.
During the year, a 1.2 kilometer long exploration tunnel from
the proposed plant site into the Minapampa orebody was permitted
and a well established Peruvian underground mining contractor
engaged. The initial cut on this tunnel was announced in February
2012 and is expected to take approximately 12 months to complete.
This tunnel will allow diamond drilling from underground to explore
the eastern strike extent of the Minapampa orebody where the
mountain side is too steep to explore by drilling from surface.
This exploration drilling will commence about midway through the
driving of the tunnel in H2 2012.
Community relations at Ollachea remained excellent throughout
the year with extensive programmes in health and welfare,
nutrition, education and sustainable development. The Company is
also providing considerable employment to members of the community
which, in turn, is making a significant contribution to the local
economy.
Patagonia
Minera IRL Patagonia SA continues to build our new business unit
in the mining friendly province of Santa Cruz, Argentina, following
the take-over of Hidefield Gold Plc at the end of 2009. Effort was
divided between the Don Nicolas Feasibility Study and a major
exploration program to test the many low sulphidization, epithermal
targets on the Company's large exploration concession totaling some
2,700 square kilometers.
The Don Nicolas Feasibility Study encompasses two principal
epithermal vein fields, La Paloma and Martinetas, approximately 50
kilometers apart. Following approximately 24,000 meters of in-fill
and extension drilling since acquiring Hidefield, the Company
completed its inaugural resource estimate in August 2011. The
Measured and Indicated Resource in the combined High and Low Grade
category is 5.6 million tonnes grading 2.1 g/t Au for 381,400
ounces gold representing an 89% increase in these categories
compared to the Hidefield resource published in 2009. An additional
3.1 million tonnes grading 1.5g/t gold (145,000 ounces) are in the
Inferred Resource category.
The results of the Don Nicolas Feasibility Study, completed in
February 2012, are highly encouraging. The basis for the project is
the high grade Measured and Indicated Resource of 1.5 million
tonnes above a lower cut-off of 1.6 g/t gold grading 6.0 g/t gold
and containing 281,000 ounces. All ore will be mined from open pits
and processed with a conventional carbon-in-leach (CIL) plant
producing an average of 52,000 ounces of gold and 56,000 ounces of
silver over a 3.6 year mine life at an average cash operating cost,
after silver credits, of $528 per ounce. Using a gold price of
$1,250 per ounce, the post tax cash flow is projected at $36
million, the NPV using a 7% discount is $22 million, the IRR is 23%
and the payback period is 2.0 years. At current spot gold prices
the project economics are outstanding. Moreover, a compelling
feature of Don Nicolas is the upside potential from brown-fields
and near-by green-fields exploration, open ended deeper ore shoots
which could become future underground mines and a substantial low
grade resource which, subject to metallurgical testing in 2012,
could form the basis for production from a parallel heap leach
plant.
With the completion of the feasibility study, the Environmental
Impact Assessment (EIA) is being completed and permitting will then
commence. All required permits should be in place during the second
half of 2012 and development will then commence with the objective
of bringing Minera IRL's next mine into production in late
2013.
The Deseado Massif, the 77,000 square kilometer volcanic complex
in which our leases are located, is proving an outstanding, yet
under explored, precious metals district. Minera IRL Patagonia has
one of the largest exploration tenement holdings in the Deseado
Massif and many outstanding targets. Exploration during the year
focused on three key areas;
-- Escondido where a bulk tonnage discovery was made in 2010;
-- Michelle to the south west and within the same vein field as
Anglo Gold's Cerro Vanguardia Mine; and
-- Chispas, to the south east.
Diamond drilling was carried out on each of these properties
during the year. Of particular interest was the discovery of two
separate high grade veins at Escondido which recorded 0.7 meters
grading 136g/t gold and 157g/t silver in one area and 4.2 meters
grading 1.6g/t gold and 663g/t silver in another structure. Based
upon the encouraging drill results from the 2011 field season, an
expanded exploration program is underway for 2012.
The full Report & Accounts, including the notes, and
Management Discussion and Analysis for the year ended December 31,
2011 will be posted to shareholders during the week commencing 2
April 2012 and are available from the Company's website
www.minera-irl.com and from SEDAR.
Following the release, Minera IRL plans to host a conference
call at 9:00 am Lima time, 10:00 am Toronto time and 3:00 pm London
Time on April 2, 2012. To participate in the call please dial:
Toll Free (North America): 866-223-7781
Local Toronto and International: 416-340-8018
Global: 800-6578-9898
A live webcast and archive will be available at:
http://www.gowebcasting.com/3250
REPLAY: Toll Free Replay call (North America): 800-408-3053
International / Toronto Replay Call: 905-694-9451
The replay is available till April 9th, 2012
Passcode: 7786433
For more information please contact:
Minera IRL
Trish Kent, Vice President, Corporate Relations +511 418 1230
Canaccord Genuity Limited
(Nominated Adviser & Broker, London)
John Prior +44 (0)20 7523
Sebastian Jones 8350
FinnCap (Co-broker, London)
Geoff Nash (Corporate Finance)
Matthew Robinson (Corporate Finance) +44 (0)20 7600
Joanna Weaving (Corporate Broking) 1658
RBC Europe Ltd (Co-broker, London)
Stephen Foss +44 (0)20 7653
Martin Eales 4000
Buchanan (Financial PR, London)
Bobby Morse +44 (0)20 7466
James Strong 5000
Minera IRL Limited is the AIM traded, TSX and BVL listed holding
company of precious metals mining and exploration companies focused
in Latin America. Minera IRL is led by an experienced senior
management team with extensive industry experience, particularly
operating in South America. The Group operates the Corihuarmi Gold
Mine and the advanced gold projects Ollachea in Peru and Don
Nicolas in Argentina. For more information, please visit
www.minera-irl.com.
The Toronto Stock Exchange neither approves nor disapproves the
information contained in this News Release.
Some of the statements contained in this release are
forward-looking statements, such as estimates and statements that
describe the Company's future plans, objectives or goals, including
words to the effect that the Company or management expects a stated
condition or result to occur. Since forward-looking statements
address future events and conditions, by their very nature, they
involve inherent risks and uncertainties.
While these forward-looking statements, and any assumptions upon
which they are based, are made in good faith and reflect our
current judgment regarding the direction of our business, actual
results will almost always vary, sometimes materially, from any
estimates, predictions, projections, assumptions or other future
performance suggestions herein. Except as required by applicable
law or regulation, Minera IRL Limited does not intend to update any
forward-looking statements to conform these statements to actual
results.
Competent Persons Statement
The preparation of the technical information contained herein
was supervised and reviewed by Courtney Chamberlain, Executive
Chairman of the Company, BSc and MSc Metallurgical Engineering, a
Fellow of the Australian Institute of Mining and Metallurgy
(AUSIMM) and Donald McIver, VP Exploration of the Company, MSc
Exploration and Economic Geology, a Fellow of the Australian
Institute of Mining and Metallurgy (AUSIMM), who are recognized as
Qualified Persons for the purposes of National Instrument 43-101,
and who have reviewed and approved the technical information in
this press release.
Quality Assurance and Quality Control Procedures Disclosure
The Company has implemented and maintains a Minera IRL quality
assurance/quality control (QA/QC) protocol on its projects to
ensure best industry practice in sampling and analysis of
exploration and resource definition samples. The insertion of field
duplicates, certified standards and blank samples into the sample
stream form part of the MIRL procedure (these act as an independent
check on contamination, precision and accuracy in the analytical
laboratory).
Assay results are reported once rigorous QAQC procedures have
been approved.
Independent Audit Programs
Towards maintaining compliancy with international standards as
they pertain to the minerals industry resource evaluation and
estimation procedure, MIRL regularly contracts the services of
industry experts to conduct detailed audits of established QAQC
procedures.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAFDEDLPAEFF
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