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LONDON, UNITED KINGDOM and TORONTO, ONTARIO--(Marketwire - April 1, 2011) - Minera
IRL Limited ("Minera IRL" or the
"Company"), (TSX:IRL)(AIM:MIRL)(BVLAC:MIRL) Latin America
focused gold mining, development and exploration company, today
announced its audited results for the year ended 31 December, 2010 and
outlined Company developments during the same year.
2010 Highlights: (all $ denominates US$ unless
otherwise stated)
Financial
-- Gold sales of 33,240 ounces with a realised gold price of $1,232 per ounce, up 24.7% from $988 per ounce in 2009 -- Sales revenue of $41.1 million in 2010, up 29.0% from $31.9 million in 2009 -- EBITDA of $13.8 million in 2010, which included the write-off of the exploration expenditure for the La Falda and Killincho exploration projects of approximately $2.7 million, up 22.0% from $11.3 million in 2009 -- Profit before tax of $6.5 million, up 20.4% from $5.4 million in 2009 -- Total income after tax of $2.8 million in 2010, in line with 2009 -- Cash held of $34.6 million as at 31 December 2010
Operations and Development
-- Corihuarmi 2010 gold production of 32,533 ounces, 15.2% above budget and in line with 2009 production -- Corihuarmi site cash operating cost of $383 per ounce -- The Company's NI43-101 compliant gold resource increased to 1.5 million ounces in the Indicated category plus an additional 0.7 million ounces in the Inferred category -- The Pre-feasibility Study at Ollachea progressed toward a mid-2011 completion including a new resource estimate containing 1.2 million ounces in the Indicated category and 0.5 million ounces in the Inferred category -- In May 2010, a new discovery was announced at Concurayoc, located west of the Ollachea Minapampa Zone, where ongoing drilling has the immediate objective of defining an Inferred Resource -- The Feasibility Study on the Don Nicolas Project in Patagonia progressed with in-fill drilling being substantially completed during the 2010 year -- Also in Patagonia, scout drilling at Escondido has identified a new discovery with gold mineralization immediately adjacent to the Las Calandrias discovery announced by Mariana Resources Ltd
Other
-- In April 2010, the Company enhanced its shareholder liquidity and global market exposure by obtaining a listing on the TSX Exchange in Toronto under the trading symbol "IRL" -- In July 2010, the Company completed a new $20 million finance facility with Macquarie Bank Limited, of which $10 million was drawn as at 31 December 2010 -- In November 2010, the Company completed a successful equity raising for gross proceeds of approximately C$37.5 million, or net proceeds of approximately C$35 million, by issuing 32,641,600 ordinary shares at C$1.15 per share
"Minera IRL
made good progress on all fronts during 2010 which is reflected in
improvements in the annual financial results," said Courtney
Chamberlain, Executive Chairman of Minera
IRL. "We are now well positioned going into 2011 with a strong
cash balance managed by an excellent team to advance the Ollachea pre-feasibility study and Don Nicolas
feasibility study and unlock further value through focused gold
exploration"
Financial Results
Production from the Corihuarmi
Gold Mine remained steady compared to 2009 and yielded sales revenue of
$41.1 million (2009: $31.9 million). The increase in revenue compared
to 2009 was due the gold price from spot sales increasing from $988 per
ounce to $1,232 per ounce. Mining and treatment of 20% more ore in 2010
contributed to an increase in the cost of sale to $23.3 million (2009:
$18.8 million). The combined effect was an increased gross profit of
$17.8 million (2009: $13.1 million). Administration expenses of $7.8
million were higher than the prior year (2009: $6.6 million), with the
inclusion of the administration costs relating to the Hidefield Gold Plc acquisition. Exploration expense
increased to $3.3 million (2009: $1.7 million), largely arising from
the write-offs of the La Falda Project in
Chile and the Killincho Project in Peru totalling $2.7 million. The overall result was an
increased operating profit of $7.2 million (2009: $5.8 million). The
income tax expense, which arises solely in Peru, increased to $4.3
million (2009: $2.5 million) with the increase in profit before tax in
Peru. The Company's total income after tax decreased to $2.8 million
(2009: $3.0 million).
The group spent a total of $22.9 million on
exploration and development during the year (2009: $16.4 million) of
which $22.3 million of the exploration and development expenditure was capitalised to the intangible assets of the group
($14.5 million for the Ollachea project) and
$0.6 million was recognised as a cost in the
income statement.
At the end of 2010 the group had a cash
balance of $34.6 million, leaving the company in a strong position to
continue with the program to develop the company.
Projects
Corihuarmi Gold Mine
The Corihuarmi Gold
Mine continued to perform well throughout the year generating strong
cash flow for the Group. A total of 32,533 ounces was produced, which
was above expectations and in line with 2009 production, at a cash cost
of $383 per ounce. Gold sales, in line with Company policy of not
hedging, averaged $1,232 per ounce for 2010, which was $244 per ounce
higher than the previous year. At the end of 2010 the three year open
pit mining contract expired. The Company then took over mining
operations which will optimize operating cost going forward. Mine life
expectations now extend to 2015.
Ollachea
Following completion of a positive Scoping
Study predicated upon an Inferred Resource containing 1.3 million
ounces in late 2009, a Pre-feasibility Study was commenced and
continued throughout the year. A major component of this was an in-fill
diamond drilling program on the central Minapampa
Zone bringing the total number of holes to 88 giving a drill spacing
grid of approximately 30 meters in the mineralized zone. Drilling was
also extended another 200 meters to the east (Minapampa
East) at which point further drilling advance from surface was
precluded by the very steep mountain slope. This information allowed
our consultants to upgrade the resource to 9.3 million tonnes grading 3.9g/t containing 1.2 million ounces
in the Indicated category plus an additional 4.8 million tonnes grading 3.2g/t containing 0.5 million ounces
in the Inferred category.
International engineering company AMEC was
appointed to carry out the Pre-feasibility Study. The detailed design
of the underground mine was commenced by Coffey Mining Pty Ltd and
underpinned by a comprehensive geotechnical program. The proposal for a
1.3 kilometre production size exploration
tunnel to access the mineralized zone was submitted to the authorities
for permitting. Metallurgical testing was transferred to AMMTEC in
Perth, Western Australia, where further detailed work continues to
demonstrate that over 90% gold extraction can be expected using conventional
processing methods. Data gathering for the environmental baseline study
continued throughout the year. The Pre-feasibility Study is expected to
be completed mid-2011.
A new discovery was announced at Concurayoc where a new mineralized zone to the west
of Minapampa has identified mineralization
over a 600 meter strike length. Drilling at Concurayoc
continues with the objective of estimating a maiden Inferred resource
during mid-2011. Mineralization at Ollachea
remains open ended and untested along strike both to the east and west
as well as down dip.
Community relations at Ollachea
remained excellent throughout the year with extensive programs 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 has put a great deal of
effort into the 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. This acquisition included the Don Nicolas
Project with a resource base of 201,000 ounces in the Indicated
category plus 158,400 ounces in the Inferred category. A very large exploration
concession totalling some 2,700 square
kilometers was also acquired. Early in the year the management team was
bolstered and reorganized into two groups, one dedicated to the
advancement of a Feasibility Study at Don Nicolas and the other focused
on regional exploration.
The Don Nicolas Feasibility Study comprises
two principal epithermal vein deposits, Sulphuro
and Martinetas. During the year some 17,000
meters of in-fill drilling was carried out to improve the confidence
level of the resource base. A final round of infill drilling at Martinetas was about to commence at the time of
writing which is expected to provide all the information required to
complete a resource re-estimation in mid-2011. Ingenieria
PENTA Sur SA, an Argentina based engineering company, was appointed to
produce the feasibility report. Work included additional metallurgical
testing and environmental studies. The Feasibility Study is expected to
be completed in late 2011. Assuming a successful outcome, permitting
will be completed and construction started in 2012 with the objective
of bringing a new mine on line by early 2013.
The Deseado Massif,
the 77,000 square kilometre
volcanic complex in which our leases are located, is proving an
outstanding, yet under explored, precious metals district. In addition
to some very good mines, a number of important discoveries have
recently been made. Minera IRL Patagonia's
lease holding is amongst the largest in the Deseado
Massif and hosts many high quality exploration prospects. During the
early part of the year, the extensive database was reviewed and this
was supplemented with highly sophisticated modern geophysical
technology including a 4,400 line kilometre,
high intensity, heliborne magnetic and
radiometric survey. The result was an outstanding image of the
underlying rock characteristics which provide indications of many
additional targets.
Exploration drilling commenced in August with
an immediate discovery at Escondido immediately south of Mariana
Resources Ltd's Las Calandrias discovery.
Follow-up exploration on this bulk tonnage deposit is continuing. In
addition, the first round of drilling at Pan de Azucar
within the Chispas vein field proved
encouraging but some 8 kilometres of known
outcropping veins containing elevated gold values remain to be drill
tested. Other high grade epithermal vein prospects to be explored in
2011 include Microndas, Paula Andrea and
Michelle, along strike from Anglo American's Cerro Vanguardia
Mine, the largest gold mine in southern Argentina.
Other Projects
First round of drilling at the Bethania gold-copper porphyry, located only 10
kilometers from the Corihuarmi Gold Mine, was
encouraging with long intersections of low grade gold-copper-molybdenum
mineralization. Bethania is a very large
system with the alteration zone extending some 3.5 kilometres
by 1.5 kilometres underlain by encouraging
magnetic and chargeability geophysical anomalies. The second round of
drilling is scheduled to commence during the second quarter of 2011.
The Quilavira gold
prospect in Southern Peru was purchased from Newcrest and surface
rights agreements are being negotiated with the local communities. The Huaquirca Joint Venture was successfully
renegotiated on favourable terms with JV
partner Minera Alturas Corporation. The Frontera Project in Chile continues to be managed
by Teck Cominco.
Drilling at the La Falda
gold porphyry system in Chile failed to meet expectations and was
written off. Likewise, the Company terminated the Killincho
exploration project in southern Peru.
The full Report & Accounts, including the
notes, and Management Discussion and Analysis for the year ended
December 31, 2010 will be posted to shareholders no later than the week
commencing 4 April 2011 and are available from the Company's website www.minera-irl.com and from SEDAR.
Minera IRL Limited is the AIM traded and 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 in operating in South America. The
Group operates the Corihuarmi Gold Mine and
the emerging Ollachea Gold Project in Peru as
well as the advanced Don Nicolas Project in Argentina. For more
information, please visit www.minera-irl.com.
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 a Qualified
Person for the purposes of National Instrument 43-101, and who has
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.
The Toronto Stock Exchange neither approves
nor disapproves the information contained in this News Release.
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