TIDMMIRL
RNS Number : 0314D
Minera IRL Limited
10 May 2012
MINERA IRL LIMITED
Interim Financial Accounts
For the First Quarter ended 31 March 2012
HIGHLIGHTS
Financial
-- Revenue up 1.3% to $11.1 million (Q1 2011: $10.9 million)
-- EBITDA down 8.5% to $4.4 million (Q1 2011: $4.7 million)
-- Profit after tax $1.7 million, up 35% million from $1.3 million in Q1 2011
-- Gold sales down 17% to 6,515 ounces (Q1 2011: 7,883 ounces).
Average realised gold price up 22% to $1,699 per ounce (Q1: $1,389
per ounce)
-- Strong cash balance of $30.3 million at end of quarter (Q1 2011: $30.7 million)
Operational
-- Gold production from the Corihuarmi Gold Mine ahead of
management expectations at 6,747 ounces compared with 7,952 ounces
in the same period in 2011 ("Q1 2011"). Corihuarmi site cash
operating costs US$502 per ounce, (Q1 2011: $401 per ounce)
-- Completion of a positive feasibility study on the Don Nicolas
Project in Patagonia. Based on a gold price of US$1,250/oz, the
study indicates a NPV (7% real) of US$40 million (pre-tax) and
US$22 million (post tax); an IRR (real) of 34.6% (pretax) and 22.8%
(post tax) and a payback period of 2.0 years (post tax). Permitting
about to commence
-- Excavation of the exploration tunnel at the Ollachea Project
commenced following the establishment of access to the portal site.
Feasibility study on track for second half 2012 completion
Other
-- Completed a successful 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)
Note: $ = United States dollars
Chairman's Statement
The financial results for the March 2012 quarter exceeded
management's expectations on the back of a solid performance from
our Corihuarmi Gold Mine in Peru. The feasibility study on the Don
Nicolas Project in Patagonia was completed and indicated that a
viable mining operation can be developed. Good progress was made on
the feasibility study at the Company's flagship project, Ollachea,
in southern Peru. An equity raising of CAD33.1 million was
completed and along with revenue from Corihuarmi, will provide
funds for this year's programs.
Gold sales were a solid US$11.1 million on the back of a strong
gold price, with spot sales averaging US$1,699 per ounce. Gross
profit was US$5.4 million and EBITDA US$4.3 million. Profit before
tax was US$3.1 million giving a profit after tax of US$1.7 million.
The cash balance at the end of the quarter was US$30.3 million.
Our Corihuarmi Gold Mine continues to perform very well with
gold production of 6,747 ounces, approximately 26% above the
Company's budget. However, this was 15% below production in the
first quarter of 2011, which is related to the expected falling
grade which averaged 0.61g/t gold compared to 0.85g/t gold in the
corresponding period of 2011. Mining continued to largely focus on
the Susan outcrop and the broken scree material. Site cash
operating costs averaged US$502 per ounce for the quarter.
We are very pleased with the results of the Feasibility Study
from our Don Nicolas Project in Argentina. This was predicated upon
open pittable Proven and Probable Mineral Reserves of 1.2 million
tonnes grading 5.1g/t gold and 10g/t silver containing 197,000
ounces gold and 401,000 ounces silver. From this, gold production
of 181,000 ounces and silver production of 190,000 ounces has been
scheduled over the 3.6 year mine life. Up-front capital cost has
been estimated at $55.5 million plus a sustaining capital of $7.3
million over the current estimated life of the project.
The project economics are compelling with a cash operation cost,
after silver credit, of $528/ounce gold. Using a base case gold
price of $1,250/ounce, the post tax net present value (NPV) using a
7% discount is $21.6 million with an internal rate of return (IRR)
of 22.8%. With a higher gold price of $1,500 per ounce, the NPV
increases to $41.4 million and the IRR to 38.1%. Whilst the mine
life is relatively short, the payback period is only 2 years, and
potentially less with a assumed higher gold price, and there exists
much upside potential to extend the mine life. A new in-fill and
extension drilling program commenced at the Martinetas area aimed
at increasing the open-pit resource.
Following the successful feasibility study, the Environmental
Impact Assessment has been completed and permitting was about to
commence at the time of writing. Consideration of engineering
companies is underway and financing options are being investigated.
The Company's objective remains on track to bring Don Nicolas into
production before the end of 2013.
The feasibility study on the Ollachea Project progressed
throughout the quarter. Final in-fill drilling on the Minapampa
Zone has been completed, advanced metallurgical and geotechnical
testing continued, mining and process design advanced and
archaeological clearance of the required sites progressed. The
feasibility study remains on track for completion in the second
half of 2012. The portal on the 1.2 kilometre exploration tunnel
was established and the drive commenced.
The 2012 exploration field season commenced with mapping,
surface sampling and geophysics in Patagonia. Exploration drilling
is scheduled to commence during the second quarter at the high
quality Michelle Prospect close to AngloGold Ashanti Limited's
majority owned Cerro Vanguardia Mine.
We are well aware of the concern of the international investment
community about recent political developments in Argentina and the
resulting negative impact upon mining share prices including Minera
IRL. However, we are confident that private mining assets are
secure and that investment can proceed unimpeded. We are certainly
receiving outstanding support for our activities in Patagonia from
the officials in Santa Cruz Province.
In Peru, we are pleased with the management of the country by
the government of President Ollanta Humala who was elected in 2011.
The mining industry in Peru remains extremely vibrant with many
capital development projects in progress.
Supported by resolute operational progress, a solid balance
sheet and a strong resource base the management of Minera IRL
continue to press ahead with the building of a mid-tier Latin
American gold mining company.
In closing, I would like to extend my appreciation to our team
for their outstanding efforts. I also thank our loyal shareholders
for their ongoing patience and support as we build the Company.
Courtney Chamberlain
Executive Chairman
Minera IRL Limited 9 May 2012
Minera IRL Limited
Consolidated Statement of Comprehensive Income
3 months Year
3 months
ended ended ended
31 March 31 March 31 December
2012 2011 2011
(unaudited) (unaudited) (audited)
US$'000 US$'000 US$'000
Revenue 11,073 10,929 53,002
Cost of sales (5,710) (6,459) (27,955)
--------------------------------------- ------------- ------------- -------------
Gross profit 5,363 4,470 25,047
Other Income 200
Administration expenses (2,090) (2,071) (8,211)
Exploration costs (95) (222) (1,014)
Gain on disposal of available
for sale investments - 386 403
--------------------------------------- ------------- ------------- -------------
Operating profit 3,178 2,563 16,425
Finance income 13 19 56
Finance expenses (96) (94) (418)
--------------------------------------- ------------- ------------- -------------
Net finance expense (83) (75) (362)
Profit before tax 3,095 2,488 16,063
Income tax (1,399) (1,234) (6,304)
--------------------------------------- ------------- ------------- -------------
Profit for the period attributable
to the equity shareholders of
the parent 1,696 1,253 9,759
Retranslation of foreign operations 107 - 102
Gain (loss) on valuation of available
for sale investments (111) 119 18
Recycled on disposal of available
for sale investments - (260) (288)
Total Comprehensive Income 1,692 1,113 9,591
--------------------------------------- ------------- ------------- -------------
Earnings per ordinary share (US
cents)
Basic 1.3 1.0 8.2
Diluted 1.3 1.0 8.0
Minera IRL Limited
Consolidated Balance Sheet
As at As at As at
31 March 31 March 31 December
2012 2011 2011
(unaudited) (unaudited) (audited)
US$'000 US$'000 US$'000
Assets
Property, plant and equipment 19,239 23,303 19,989
Intangible assets 97,627 57,726 88,474
Available for sale investments 427 717 547
Deferred tax asset 574 - 574
Other receivables 7,505 5518 7,253
----------------------------------- -------------- -------------- -------------
Total non-current assets 125,372 87,264 116,837
----------------------------------- -------------- -------------- -------------
Inventory 2,667 2,263 2,809
Other receivables and prepayments 6,698 3,824 5,330
Cash and cash equivalents 30,285 30,734 11,134
----------------------------------- -------------- -------------- -------------
39,650 36,821 19,273
Non-current assets held for - - -
sale
----------------------------------- --------------
Total current assets 39,650 36,821 19,273
Total assets 165,022 124,085 136,110
----------------------------------- -------------- -------------- -------------
Equity
Share capital 131,977 100,751 100,752
Foreign currency reserve 338 129 231
Share option reserve 1,917 1,918 1,917
Revaluation reserve 217 457 328
Accumulated profits (losses) 10,447 245 8,751
----------------------------------- -------------- -------------- -------------
Total equity attributable
to the equity shareholders
of the parent 144,896 103,500 111,979
----------------------------------- -------------- -------------- -------------
Liabilities
Interest bearing loans - 10,000 -
Provisions 2,464 2,391 2,443
Other long term liabilities - - -
----------------------------------- -------------- -------------- -------------
Total non-current liabilities 2,464 12,391 2,443
----------------------------------- -------------- -------------- -------------
Interest bearing loans 10,000 - 10,000
Current tax 1,883 1,250 2,290
Trade and other payables 5.779 6,944 9,398
----------------------------------- -------------- -------------- -------------
Total current liabilities 17,662 8,194 21,688
----------------------------------- -------------- -------------- -------------
Total liabilities 20,126 20,585 24,131
Total equity and liabilities 165,022 124,085 136,110
----------------------------------- -------------- -------------- -------------
Minera IRL Limited
Consolidated Statement of Changes in Equity
Foreign Share Reval-uation Profit
Share currency Option reserve and loss
capital reserve reserve US$'000 account Total
US$'000 US$'000 US$'000 US$'000 US$'000
Balance 1 January
2011 100,707 129 1,938 598 (1,029) 102,343
Profit for the
period to
31 March 2011 - - - - 1,254 1,254
Gain on available
for sale
investments - - - 119 - 119
Realised gain on
available
for sale
investments - - - (260) (260)
------------------- --------- ---------- --------- ------------- ------------- ---------- ---------
Total
Comprehensive
income (141) 1,254 1,113
New share capital
subscribed 44 - - - - 44
Exercise of share
options - - (20) - 20 -
------------------- --------- ---------- --------- ------------- ------------- ---------- ---------
Balance 31 March
2011 100,751 129 1,918 457 245 103,500
------------------- --------- ---------- --------- ------------- ------------- ---------- ---------
Balance 1 April
2011 100,751 129 1,918 457 245 103,500
Profit for the
period to
31 Dec.2011 - - - - 8,505 8,505
Retranslation of
foreign
operations - 102 - - - 102
Loss on available
for sale
financial assets - - - (101) - (101)
Recycled on
disposal of
available for
sale investments - - - (28) - (28)
------------------- --------- ---------- --------- ------------- ------------- ---------- ---------
Total
Comprehensive
Income - - - (129) 8,505 8,478
New share capital
subscribed 1 - - - - 1
Exercise of share
options - - (1) - 1 -
Balance 31
December 2011 100,752 231 1,917 328 8,751 111,979
------------------- --------- ---------- --------- ------------- ------------- ---------- ---------
Balance 1 January
2012 100,752 231 1,917 328 8,751 111,979
Profit for the
period to
31 March 2012 - - - - 1,696 1,696
Loss on available
for sale
financial assets - - - (111) - (111)
Retranslation of
foreign
operations - 107 - - - 107
------------------- --------- ---------- --------- ------------- ------------- ---------- ---------
Total
comprehensive
income - 107 - (111) 1,696 1,692
New share capital
subscribed 33,363 - - - - 33,363
Cost of raising
share capital (2,138) (2,138)
Balance 31 March
2012 131,977 338 1,917 217 10,447 144,896
------------------- --------- ---------- --------- ------------- ------------- ---------- ---------
Minera IRL Limited
Consolidated Cash Flow Statement
3 months 3 months Year
ended ended ended
31 March 31 March 31 December
2011
2012 2011 (audited)
(unaudited) (unaudited) US$'000
US$'000 US$'000
Cash flows from operating activities
Operating profit 3,179 2,563 16,425
Depreciation 1,155 2,145 8,349
Impairment of exploration assets - - -
Share option costs - - -
Provision for mine closure cost 21 752 652
Profit on disposal of available for
sale investments (386) (403)
Loss on disposal of assets - - 89
Available for sale investments impairment 10 - 80
Foreign exchange losses relating to (313) -
non-operating items
Decrease/(increase) in inventory 142 245 (301)
(Increase)/decrease in other receivables
and prepayments (1,621) (1,262) (4,999)
(Decrease)/increase in trade and other
payables (3,618) (1,853) (752)
Corporation tax paid (1,808) (1,644) (5,751)
----------------------------------------------- ------------------ ------------- -------------
Net cash flow from operations (2,540) 247 14,983
Interest received 13 19 56
Interest paid (96) (94) (418)
----------------------------------------------- ------------------ ------------- -------------
Net cash flow from operating activities (2,623) 172 14,531
----------------------------------------------- ------------------ ------------- -------------
Cash flows from investing activities
Sale of available for sale investments - 642 672
Acquisition of property, plant and
equipment (404) (1,005) (3,984)
Acquisition of available for sale
investments - (152)
Acquisition of intangible assets (exploration
expenditure) (9,154) (4,080) (34,728)
----------------------------------------------- ------------------ ------------- -------------
Net cash outflow from investing activities (9,558) (4,443) (38,192)
----------------------------------------------- ------------------ ------------- -------------
Cash flows from financing activities
Proceeds from the issue of ordinary
share capital 33,363 44 45
Cost of raising share capital (2,138) - -
Receipt of loans - - -
Repayment of loans - - -
----------------------------------------------- ------------------ ------------- -------------
Net cash inflow from financing activities 31,225 44 45
----------------------------------------------- ------------------ ------------- -------------
Net (decrease)/increase in cash and
cash equivalents 19,044 (4,227) (23,616)
Cash and cash equivalents at beginning
of the period 11,134 34,648 34,648
Exchange rate movements 107 313 102
----------------------------------------------- ------------------ ------------- -------------
Cash and cash equivalents at end of
the period 30,285 30,734 11,134
----------------------------------------------- ------------------ ------------- -------------
Minera IRL Limited
Notes to the Interim Report
The financial information contained in this Interim Report
does not constitute statutory accounts as defined by the Companies
(Jersey) Law 1991. No statutory accounts for the period have
been delivered to the Jersey Registrar of Companies. The financial
information contained in this Interim Report has neither been
audited nor reviewed by the auditors.
The statutory accounts for the year ended 31 December 2011
have been filed with the Jersey Registrar of Companies. The
auditors' report on these accounts was unqualified. The consolidated
financial information contained in this Interim Report has
been presented and prepared in accordance with interim reporting
standards, in a form consistent with the annual accounts and
in accordance with accounting policies and standards applicable
to those annual accounts. However, these interim accounts
do not include all the disclosures required for those annual
accounts. Both the annual accounts and these interim accounts
have been prepared in accordance with International Financial
Reporting Standards. There have been no changes in the company's
accounting policies since 31 December 2011.
This Interim Report has been approved for issue by the Board
of Directors on 9 May 2012.
Going Concern
Having taken into account the balance of cash at 31 March
2012 and the fact that the Corihuarmi mine has a positive
cash flow, the Directors of the Company consider that it will
have sufficient funds to continue as a going concern for the
foreseeable future.
Earnings per share
The earnings per share for the first quarter has been calculated
using the profit attributable to ordinary shareholders of
US$1,696,000 (first quarter 2011: US$1,253,000) and the weighted
average number of ordinary shares in issue during the three
months to 31 March 2012 of 128,448,240 (first quarter 2011:
119,571,273).
Issue of shares
On 5 March 2012 the Company issued 29,260,000 ordinary shares
at a price of CAD1.13 per share (equivalent to GBP72p based
on exchange rate at pricing) as a private placement of shares.
Transactions of an unusual nature
There were no transactions of an unusual nature during the
three months to 31 March 2012.
Seasonal Influences
The business of the Company is not generally subject to seasonal
influences.
Related parties
During the first quarter ended 31 March 2012 the Company had
no related party transactions.
Subsequent events
In April 2012, 3,060,000 options were exercised at a price
of GBP45p per share.
The Directors of Minera IRL are listed in the Group's Annual
report for the year ended 31 December 2011.
By order of the board
C Chamberlain
Executive Chairman
This information is provided by RNS
The company news service from the London Stock Exchange
END
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