Showing posts with label Gold investment. Show all posts
Showing posts with label Gold investment. Show all posts

Wednesday, June 24, 2015

Minera IRL Reports Year-End 2014 Financial Results and Announces Notice of Annual General Meeting


LIMA, PERU--(Marketwired - Jun 23, 2015) - Minera IRL Limited ("Minera IRL", or the "Company") (IRL.TO)(MIRL.L)(MIRL.L), has reported its financial results for the year ended 31 December 2014. The Company has also provided an update on its outlook for 2015 and announces the filing of its notice of annual general meeting.

2014 Highlights:


  • Gold sales of 23,654 ounces for revenues of $29.9 million.
  • Gross profit of $6.8 million.
  • Loss before tax from continuing operations of $7.0 million, which excludes the impact of the investment in the Don Nicolás joint venture.
  • After tax loss from continuing operations of $8.9 million.
  • After tax loss including discontinued operation of $43.4 million, or $0.19 per share.
  • Includes loss of $32.1 million on the sale of the Company's remaining interest in the Don Nicolás joint venture.
  • Cash balance of $3.8 million as at 31 December 2014.
  • Subsequent to year-end, entered into a $70 million bridge loan agreement with a Peruvian state-owned development and promotion bank, Corporación Financiera de Desarrollo S.A. ("COFIDE").

Operational Performance

Corihuarmi, Peru

  • Gold production from the Corihuarmi Gold Mine of 23,321 ounces.
  • Site cash operating costs of $705 per ounce produced.
  • Total cash operating costs of $874 per ounce sold.

Ollachea, Peru

  • Completed a mining optimization of the 2012 Ollachea Definitive Feasibility Study that reduced the estimated initial capital cost to $164.7 million from $177.5 million.
  • Received the Construction Permit, the final major government approval required to commence construction.
  • In June 2015, secured a $70 million Bridge Loan with COFIDE, the proceeds of which were used to repay the Macquarie Bank debt facility, make the final property payment due to Rio Tinto and will be used to advance initial aspects of the development of Ollachea.
  • The Company also signed a Mandate Letter with COFIDE to structure up to $240 million in debt to be used to replace the Bridge Loan and finance construction of Ollachea.

Don Nicolás, Argentina

  • The Company sold its remaining interest in the Don Nicolás joint venture for $10 million.

A summary of the key operating and financial measures for the three and twelve-month periods ended 31 December 2014 and 2013 is provided in Table 1 near the end of this press release.

Commenting on the 2014 financial results, Daryl Hodges, Minera IRL Limited's Executive Chairman, stated: "2014 presented a number of challenges that required important strategic decisions. The Company is now in a stronger position, significantly with the backing of COFIDE through the Bridge Loan and $240 million mandate, and we will work on advancing Minera IRL's key projects in an effort to create future shareholder value."

This press release should be read in conjunction with the Company's full Report & Accounts, including the Management's Discussion and Analysis ("MD&A") for the year ended 31 December 2014, which are available from the Company's website ( and on SEDAR (


During 2014, the Company completed 2,816m of exploration drilling in 45 drill holes at the Corihuarmi mine. The exploration program has defined additional material at the Laura and Cayhua zones. As a result of the exploration activities and evaluation, the Corihuarmi life of mine has been extended until early 2017 (from late 2015 at the beginning of 2014, prior to the exploration drilling). In 2015, the Company is forecasting gold production of 22,000 ounces (up from 20,000 ounces). Production is expected to come from the Laura and Cayhua zones, along with continued production from Susan, Diana, the Diana extension, plus nearby Scree Slope material, or claims acquired in January of 2015.

The 2015 Corihuarmi capital budget is $3.8 million, including $3.5 million for a heap leach pad and waste dump expansion that has already commenced. This expansion is to accommodate all of the material that is scheduled to be mined and stacked from late-2015 until early 2017 when mining operations are currently scheduled to cease. Exploration activities at Corihuarmi are expected to continue in 2015 to further extend the Corihuarmi mine life.

At 31 December 2014, the Company had a negative working capital balance of $26,919,000. Working capital being defined as current assets less current liabilities. Subsequent to 31 December 2014, the Company announced that it had secured a $70 million Bridge Loan with COFIDE. The Bridge Loan is expected to be the first component of a senior debt facility of up to $240 million to be led by COFIDE to develop the Company's Ollachea Gold Project.

The net proceeds from the Bridge Loan have been applied towards the repayment of the $30 million Macquarie Bank debt facility and the payment of $12 million of the $14.2 million outstanding to Rio Tinto under the Ollachea Mining Rights Transfer Contract, along with the $744,000 Share Hold Incentive Payment and accrued interest. The remaining $2.2 million outstanding has been converted into an unsecured promissory note payable by 31 December 2015, accruing interest at a rate of 7% per annum. The Company has the option of settling the $2.2 million promissory note with the issuance of Minera IRL ordinary shares or with cash. The issuance of ordinary shares to Rio Tinto for the settlement of some or all of the promissory note will require shareholder approval at the annual general meeting scheduled to be held on 27 August 2015.

The net proceeds from the Bridge Loan, after the payment of existing debt and financing fees, totalled $22.3 million, and will be used to advance many of the initial aspects of project development needed to commence major site construction on the Ollachea Gold Project once the senior debt facility is in place. This includes commencing the detailed engineering and design, recommencement of underground drilling at the Minapampa East zone, maintaining social and environmental programs and for general working capital purposes.

The Company has signed a letter of mandate with COFIDE to structure a senior debt facility for up to $240 million, under which the Bridge Loan is expected to be refinanced. The senior debt facility is expected to be in place by the end of 2015; however, the availability of the senior debt facility is not guaranteed and its terms, including the facility's size, are still to be negotiated. If the Company is not able to secure the senior debt facility it will not have the funds available to develop the Ollachea Gold Project and will be required to delay, scale back or eliminate various programs related to the Project. Additionally, an equity offering is expected to be required to supplement the senior debt facility in funding the development of the Ollachea Gold Project and for corporate and working capital purposes.

Additional information on the COFIDE Bridge Loan and mandate and other commitments and contingent liabilities that the Company has can be found in note 20, "Capital Commitments and Contingent Liabilities" and note 22, "Subsequent Events" in the Company financial statements for the year ended 31 December 2014.

Notice of Annual General Meeting

The Annual Meeting will commence at 11 am BST at Ordnance House, 31 Pier Road, St Helier, Jersey on Thursday, 27 August 2015. The Company had previously filed a Form 9A - Request for Extension for Financial Reporting/Annual Meeting with the Toronto Stock Exchange (the "TSX"), which has been approved by the TSX.

The record date for determining the holders of the Company's ordinary shares whom are entitled to notice of, and to vote at, the Annual Meeting will be 15 July 2015. The Notice of Meeting, Information Circular and Form of Proxy (the "AGM Materials") will be posted to shareholders by 22 July 2015. The AGM Materials are also available on SEDAR and the Company's website at

About Minera IRL Limited

Minera IRL Limited is an AIM, TSX and BVL listed precious metals mining and exploration company with operations in Latin America. Minera IRL is led by a management team with extensive operating experience in South America. In Peru, the Company operates the Corihuarmi Gold Mine, which continues to add cash flow and has untested potential, and with the financings described in this press release, is now poised to advance its flagship Ollachea Gold Project towards production.

For more information please visit

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained in this news release.

Cautionary Statement on Forward-Looking Information

Certain information in this news release, including information about the Company's financial or operating performance and other statements expressing management's expectations or estimates of future events, performance and exploration and development programs or plans constitute "forward-looking statements". Forward-looking statements often, but not always, are identified by words such as "seek", "believe", "expect", "do not expect", "will", "will not", "intend", "estimate", "anticipate", "plan", "schedule" and similar expressions of a conditional or future oriented nature identify forward-looking statements. Forward-looking statements are, necessarily, based upon a number of estimates and assumptions. While considered by management to be reasonable in the context in which they are made, forward-looking statements are inherently subject to political, legal, regulatory, business and economic risks and competitive uncertainties and contingencies.

The Company cautions readers that forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Minera IRL's actual financial results, future performance and results of exploration and development programs and plans to be materially different than those expected or estimated future results, performance or achievements and that forward-looking statements are not guarantees of future performance, results or achievements.

Forward-looking statements are made as of the date of this news release and Minera IRL assumes no obligation, except as may be required by law, to update or revise them to reflect new events or circumstances. Risks, uncertainties and contingencies and other factors that might cause actual performance to differ from forward-looking statements include, but are not limited to, any failure to obtain or complete project financing for the Ollachea Gold Project (including the Senior Debt Facility), changes in the price of precious metals and commodities, changes in the relative exchange rates of the US dollar against the Peruvian nuevo sol, interest rates, legislative, political, social or economic developments both within the countries in which the Company operates and in general, contests over title to property, the speculative nature of mineral exploration and development, operating or technical difficulties in connection with the Company's development or exploration programs, increasing costs as a result of inflation or scarcity of human resources and input materials or equipment. Known and unknown risks inherent in the mining business include potential uncertainties related to the title of mineral claims, the accuracy of mineral reserve and resource estimates, metallurgical recoveries, capital and operating costs and the future demand for minerals. For additional information, please consult the Company's most recently filed MD&A and Annual Information Form.

Qualified Persons

The preparation of the technical information contained herein was supervised by A.E. Olson, Consultant, FAusIMM, who is 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.

The preparation of the technical resource information contained herein was supervised by Donald McIver, VP Exploration of the Company, MSc Exploration and Economic Geology, a Fellow of the Australian Institute of Mining and Metallurgy (FAusIMM), as well as the Society of Economic Geologists (FSEG), who is recognized as a Qualified Person for the purposes of National Instrument 43-101, and who has reviewed and approved the resource information in this press release.

Non-IFRS Measures

"Site operating cash costs" and "total cash costs" are non-IFRS measures that do not have a standardized meaning prescribed by GAAP or IFRS and may not be comparable to other similarly titled measures of other gold mining companies.

"Site operating cash costs" include costs such as mining, processing and administration, but are exclusive of royalties, workers' profit participation cost, depreciation, amortization, reclamation, capital, development, exploration and other non-site costs (transport and refining of metals, and community and environmental).These costs are then divided by ounces produced to arrive at "site cash operating costs per ounce".

"Total cash costs" includes "site operating cash costs" and reflects the cash operating costs allocated from in-process and doré inventory associated with ounce of gold in the period, plus applicable royalties, workers' profit participation cost, and other non-site costs (transport and refining of metals, and community and environmental). These costs are then divided by the ounces sold to arrive at "total cash costs per ounce sold".

These measures may vary from one period to another due to operating efficiencies, waste-to-ore ratios, grade of ore processed and gold recovery rates in the period.

Management believes this information is useful to investors because these measures are considered to be key indicators of a company's ability to generate operating earnings and cash flow from its mining operations. These measures are furnished to provide additional information and are non-GAAP and non-IFRS measures that do not have any standardized meaning prescribed by GAAP or IFRS. They should not be considered in isolation as a substitute for measures of performance prepared in accordance with IFRS, and are not necessarily indicative of operating costs presented under IFRS.

Table 1: Summary of Key Operational and Financial Measures

Data Three Month Period
Ended 31 December
  Twelve Month Period
Ended 31 December
2014   2013   2014   2013  
  Waste (tonnes) 77,228   76,034   291,609   286,588  
  Ore mined & stacked on heaps (tonnes) 656,387   633,495   2,660,039   2,375,630  
  Ore grade, mined and stacked (g/t gold) 0.34   0.39   0.32   0.45  
  Gold produced (ounces) 6,114   6,446   23,321   25,223  
  Gold sold (ounces) 6,166   6,184   23,654   25,220  
  Realized gold price ($ per ounce) 1,194   1,266   1,260   1,412  
  Site operating cash costs ($ per ounce) 1 638   684   705   677  
  Total cash costs ($ per ounce) 1 831   951   874   904  
  Revenue ($'000) 7,390   7,862   29,866   35,706  
  Gross profit ($'000) 1,688   612   6,765   7,402  
  Loss from continuing operations ($'000) (3,439 ) (16,058 ) (8,925 ) (18,114 )
  Loss after-tax ($'000) (4,844 ) (18,590 ) (43,363 ) (33,834 )
  Comprehensive loss ($'000) (4,844 ) (18,590 ) (43,363 ) (34,085 )
  Loss per share                
    Continuing operations (cents) (1.5 ) (8.8 ) (3.9 ) (10.4 )
    Discontinued operations (cents) (0.6 ) (1.4 ) (15.2 ) (9.1 )
1 - Refer to the Cautionary Non-GAAP and Non-IFRS Statements earlier in this release.

Table 2: Reconciliation of Non-IFRS Measures

    Three Month Period Ended
31 December
    Year Ended
31 December
  2014   2013     2014   2013
Cost of sales $ 5,702 $ 7,250   $ 23,101 $ 28,304
  Depreciation   576   1,369     2,418   5,496
Total cash costs $ 5,126 $ 5,881   $ 20,683 $ 22,808
Ounces of gold sold   6,166   6,184     23,654   25,220
Total cash costs per ounce sold $ 831/oz $ 951/oz   $ 874/oz $ 904/oz
Total cash costs $ 5,126 $ 5,881   $ 20,683 $ 22,808
  Workers' profit participation   83   (243 )   125   102
  Royalties and Special Mining Tax   294   313     1,192   1,573
  Community and environmental costs   708   1,279     2,602   3,513
  Other costs - Provisions, transport & refinery, inventory adjustment   142   120     322   534
Adjusted site cash operating costs $ 3,899 $ 4,412   $ 16,442 $ 17,086
Ounces of gold produced   6,114   6,446     23,321   25,223
Site cash operating costs per ounce $ 638/oz $ 684/oz   $ 705/oz $ 677/oz

Monday, June 8, 2015

Minera IRL Announces US$70 Million Bridge Loan and Mandate Letter for Up to US$240 Million for Ollachea Project Financing

LIMA, PERU--(Marketwired - Jun 8, 2015) - Minera IRL Limited ("Minera IRL", or the "Company") (IRL.TO)(MIRL.L)(MIRL.L), announces that it has arranged a US$70 million secured finance facility (the "Bridge Loan") structured by the Peruvian state-owned development and promotion bank, Corporación Financiera de Desarrollo S.A. ("COFIDE") and syndicated through Goldman Sachs Bank USA. The Bridge Loan is expected to be the first step towards a senior project credit finance facility of up to US$240 million, described in a Mandate Letter signed by COFIDE and Minera IRL ("Senior Project Debt Facility"). The Senior Project Debt Facility will be structured by COFIDE, in conjunction with Minera IRL, to build the Company's Ollachea gold project in the Puno Region, southern Peru ("Ollachea", or the "Ollachea Gold Project"). The Company has agreed to COFIDE's participation on the Minera IRL board of directors, subject to the required approvals.


  • The key terms of the Bridge Loan:
    • Interest rate: LIBOR plus 6.17%, payable quarterly in arrears
    • Term: 24 months
    • Structuring and Disbursement Commission of 2.25% along with a US$300,000 upfront fee, paid on the disbursement of the Bridge Loan
    • The Bridge Loan is expected to be repaid from the follow-on Senior Project Debt Facility, but is repayable at any point, subject to a 0.75% fee
  • The Company is applying the Bridge Loan funds towards consolidating debt and will apply net proceeds towards advancing the development of Ollachea as well as funding a limited resource expansion drilling campaign. Use of proceeds are expected to include:
    • Repayment of the Macquarie Bank debt facility
    • Final property payment to Rio Tinto
    • Commencing the detailed engineering and design of the Ollachea plant
    • Pre-construction project development work
    • Resource expansion drilling at the Minapampa Far East Zone at Ollachea
    • Continue its commitment to social and environmental programs
    • Financing and advisory expenses
    • General corporate expenses and working capital
  • The Company has signed a Mandate Letter with COFIDE to structure a Senior Project Debt Facility for up to US$240 million which includes retirement of the Bridge Loan.
  • Minera IRL expects to seek equity participants to reduce the amount of debt and leverage on the project to what the Company determines to be an acceptable level, and will include input from COFIDE and potential debt and equity providers.
  • It is expected that one or more financial institutions will be invited to participate in the Senior Project Debt Facility.
  • Although there can be no guarantee on the timing and terms, it is the intent of COFIDE and Minera IRL to have the Senior Project Debt Facility in place prior to the end of 2015.
  • The Bridge Loan is secured by the Ollachea Gold Project's assets, mining reserves, mining concessions and rights, guarantees from Minera IRL S.A., and a pledge of the shares of the Company's subsidiary Compañía Minera Kuri Kullu S.A., which owns 100% of the Ollachea Gold Project.
  • Specifics of the Macquarie debt repayment and Rio Tinto property payment include:
    • Repayment of US$30 million Macquarie Bank debt facility (plus accrued interest) and release of associated security.
    • Payment of US$12.9 million of the US$15.1 million outstanding to Rio Tinto, under the Ollachea Mining Rights Transfer Contract, and release of associated security. The remaining US$2.2 million outstanding has been be converted into an unsecured promissory note, accruing interest at a rate of 7% per annum, payable by 31 December 2015, either in cash or ordinary shares of Minera IRL, at the discretion of the Company (the "Agreement Regarding Payment").

Transaction Considerations

In addition to the Structuring and Disbursement commissions outlined above, Minera IRL has committed payments totalling US$2.6 million for services relating to legal assessment, technical and financial advisory. Likewise, the Company has granted 11.6 million options (exercisable for a year following the commencement of commercial production from the Ollachea Gold Project at an exercise price of C$0.20) and a 0.9% net smelter return over the Ollachea Gold Project. The Company has a right of first refusal on the sale of the royalty and can repurchase the royalty, at its option, up until the date that Minera announces final commissioning of the project.

Related Party Transaction

Under the AIM Rules, Rio Tinto is deemed to be a related party of Minera IRL due to its substantial shareholdings in the Company. As such, the Agreement Regarding Payment is deemed to be a related party transaction under the AIM Rules. The directors of Minera IRL consider, having consulted with the Company's Nominated Adviser, Canaccord Genuity Limited, that the terms of the Agreement Regarding Payment is fair and reasonable insofar as shareholders are concerned.

Commenting on the Ollachea financing package, Daryl Hodges, Minera IRL's Executive Chairman, stated, "This transaction is an important first step for Minera IRL and is the culmination of efforts of the Minera IRL team, working closely with COFIDE and its advisors. Minera IRL can now focus on taking final steps toward financing its flagship project to production. With support from COFIDE, the Company is in a much better position to arrange financing for Ollachea, build the project, deliver on its commitments to the local community to create jobs, wealth for the benefit of the region, and create new opportunity for its shareholders. We cannot neglect to mention that this was the dream of Courtney Chamberlain, whose untimely passing was felt by all."

Dr. Diego Benavides, Minera IRL's Interim CEO and Executive President of Minera IRL S.A., continued, "The financial backing from COFIDE is the result of over 18 months of discussions, comprehensive project evaluation, and due diligence by independent consultants. The support of COFIDE is an endorsement of the technical quality of our Ollachea Gold Project and its importance to the Ollachea Community and the Puno region. We now have the opportunity to focus on working with the Ollachea community, our true long-term partners, in developing an outstanding modern mining operation providing key economic benefits to the Puno region and, indeed, to Peru."

Mr. Jorge Ramos, General Manager of COFIDE, commented, "We are very pleased to be able to offer this financing package to Minera IRL. Ollachea represents an economically robust gold project and this is an excellent opportunity for COFIDE's first mine project financing. We have confidence that the Minera IRL team will ensure that the Ollachea Gold Project will be a great success, which will have important benefits for the Ollachea community and Peru."

Mr. Juan Luis Valeriano, President of the Community of Ollachea, stated, "After eight years of working in partnership with Minera IRL, indeed sharing a close friendship, we are glad that COFIDE, an institution of the Peruvian Government, is providing the financing for the development of the Ollachea mine. The new mine will provide long-term benefits to our local economy, especially towards job creation, social projects, and spin-off business opportunities for many of our citizens. Ollachea will also be Peru's first 'Partner Community' with a mining company with the community holding a 5% shareholding in the project."

Tuesday, May 26, 2015

Precious metals rally consolidates


Precious metals rally consolidates - gold and silver 2015 US


Gold and silver rallied strongly last Friday and into Monday’s overnight trading (UK time) before spending the rest of the week drifting lower from initial highs to consolidate above notional support at $1200 and $17 respectively. As of first thing this morning, UK time in US dollars gold is now up 2.2% and silver 10.2% on the year.

From observing price action, there appears to be continuing underlying physical demand, and on Wednesday the Russian Central Bank confirmed that it had taken the opportunity of sub-$1200 prices to add 300,000 ounces of gold to their official reserves last month. It is also reasonable to suggest that in times of increasing economic and systemic tensions in the Eurozone, some central banks will swap euros for gold to rebalance their reserves.

The Fed released April’s Open Market Committee minutes on Wednesday, which on balance was little more than another holding operation on interest rates, not bringing them forward to June or putting them off to next year. Apart from some minor volatility on their release there has been little effect on precious metal prices.

The next chart is of the gold price in the other three major currencies since 31 December 2014

Precious metals rally consolidates - gold price 31 Dec 2014

In terms of gold prices, the best performance has been in weakening euros with gold up 11.4% so far this year. The European central Bank announced it would look to accelerate its bond purchases in the short-term, leading currency markets to conclude that economic conditions in the Eurozone are weaker than expected, and with the deteriorating Greek situation euro weakness should come as no surprise.

Finally, it is worth drawing attention to developments on the Hong Kong Stock Exchange, where first Hanergy Thin Film fell 47% on Wednesday, wiping $18.6bn off its capitalisation before trading was suspended. This was followed yesterday by a similar collapse in share price for Goldin Financial (Hanergy’s broker) and Goldin Properties, together wiping out a further $16.6bn.

These events are typical ahead of a speculative blow-off in markets, and while Hong Kong’s Hang Seng Index appears to have risen broadly in line with major equity markets, other smaller markets in the region reflect excessive speculation. For example, on the Shenzen Market equities are trading at an average of 67 times earnings, having risen by 12% this week alone, and there are instances of new listings rising more than ten or twenty times in less than a month of trading.

Therefore, there is a growing risk that Hong Kong and Chinese equities could become a financially destabilising risk in the region and possibly further afield, adversely affecting other markets and potentially precious metal demand.

Source: GoldMoney