LONDON, UNITED KINGDOM -- (Marketwire) -- 08/16/10 -- Minera IRL Limited ("Minera IRL" or the "Company"), (TSX: IRL)(AIM: MIRL)(BVLAC: MIRL) the Latin American focused gold mining, development and exploration company, is pleased to announce its unaudited interim results for the 3-month period ended June 30, 2010 and its interim results for the six months ended June 30, 2010. All amounts are reported in US dollars.
Highlights for the quarter ended June 30, 2010 included:
-- Gold production above budget at 8,098 ounces (15,169 ounces for 6 months
to June 30, 2010)
-- Sales revenue of US$10.0 million (US$18.3 million for 6 months to June
30, 2010)
-- Average sales price US$1,201 per ounce in the second quarter
-- Corihuarmi cash operating cost of US$365 per ounce (US$396 for the 6
months to June 30, 2010)
-- EBITDA of US$3.9 million (Q2 2009 US$1.7 million)
-- Profit before tax of US$3.0 million (Q2 2009 US$557,000)
-- Profit after tax of US$1.6 million (Q2 2009 US$234,000)
-- Cash balance of US$6.6 million at June 30, 2010 (June 30, 2009: US$ 5.1
million)
-- Rapid advancement on Ollachea Project Pre-Feasibility Study
-- Don Nicolas Feasibility Study progressing well
-- Extensive airborne geophysical survey carried out over Patagonia
exploration projects
-- Acquisition of new exploration project, Killincho, in southern Peru
-- $20 million debt facility put in place with Macquarie Bank
Summary table:
----------------------------------------------------------------------------
Quarter to Quarter to Six months Six months
30 June 30 June to 30 June to 30 June
2010 2009 2010 2009
----------------------------------------------------------------------------
8,098 7,753 15,169 14,903
Gold production ounces ounces ounces ounces
----------------------------------------------------------------------------
US$10.0 US$ 6.6 US$ 18.3 US$ 13.3
Sales revenue million million million million
----------------------------------------------------------------------------
US$ 1,201 US$ 929 per US$ 1,157 US$ 917 per
Average sales price per ounce ounce per ounce ounce
----------------------------------------------------------------------------
Corihuami cash operating US$ 365 per US$ 393 per US$ 396 per US$ 388 per
cost ounce ounce ounces ounce
----------------------------------------------------------------------------
US$ 3.9 US$ 1.7 US$ 6.2 US$ 4.1
EBITDA million million million million
----------------------------------------------------------------------------
US$ 3.0 US$ 3.6 US$ 1.2
Profit before tax million US$ 557,000 million million
----------------------------------------------------------------------------
US$ 1.6 US$ 1.8
Profit after tax million US$ 234,000 million US$ 527,000
----------------------------------------------------------------------------
"Financial performance for the three months to June 30, 2010 was above expectations. Driven by above budget gold production at our Corihuarmi Gold Mine and a continuing strong gold price." stated Courtney Chamberlain Minera IRL Limited Executive Chairman. "The Pre-Feasibility Study at the Minapampa Zone, Ollachea Project in Peru and Feasibility Study on the Don Nicolas Project in Argentina are progressing well with two drill rigs carrying out in-fill drilling on each project. On the exploration front, we have completed a large airborne geophysical survey in Patagonia to better define and prioritize exploration targets including the new zone in Escondido. In Peru, early stage exploration commenced on the new Killincho Project."
This announcement is available from the Company's web site, www.minera-irl.com.
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 Don Nicolas Project in Argentina.
This press release was reviewed by Donald McIver, VP Exploration of the Company, MSc Exploration and Economic Geology, a Fellow of the Australian Institute of Mining and Metallurgy (AUSIMM), who is the designated Qualified Person for the purposes of National Instrument 43-101 and has approved the technical information in this press 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.
Chairman's Statement
A high level of activity continued within the Minera IRL Group during the June quarter of 2010. Excellent results were achieved from our Corihuarmi Gold Mine, good progress has been made on the Pre-Feasibility Study on the Ollachea Project and the Feasibility Study on the Don Nicolas Project and there have been encouraging results from exploration in Peru and Argentina.
The financial performance for the three months to 30 June 2010 was above expectations and an improvement on both the comparative second quarter of 2009 and the first quarter of 2010. Gold sales were a solid US$10.0 million on the back of a continuing strong gold price, with spot sales averaging US$1,201 per ounce. Gross profit was US$5.3 million and EBITDA US$3.9 million. Profit before tax was US$3.0 million and profit after tax was US$1.6 million. Each of these financial figures is significantly better than both the corresponding period in 2009 and the first quarter of 2010. The cash balance at the end of the quarter was US$6.6 million.
Our Corihuarmi Gold Mine continues to perform very well with gold production of 8,098 ounces, approximately 10% above budget, bringing production for the first six months to 15,169 ounces. Mining activities were largely concentrated on the Susan outcrop. Cash operating costs averaged US$365 per ounce for the quarter thus reducing the average cash operating costs for the first six months to US$396 per ounce.
At the Ollachea Project in southern Peru, the Pre-Feasibility Study has made excellent progress and remains on schedule for completion during the first half of 2011. Infill drilling in the core Minapampa Zone with 2 rigs continued throughout the period with 32 of the 40 holes completed to date. This drilling is required to raise the resource confidence level to Measured and Indicated categories compliant with NI43-101 standards. Progress was also made on other aspects of the Pre-Feasibility Study including planning for an exploration tunnel into the deposit, metallurgical test-work, geotechnical evaluations and information gathering for the environmental baseline report. Drilling will revert to the new Concurayoc discovery, approximately 500 meters west of the Minapampa Zone, when the infill program is completed.
In Patagonia, good progress has been made on the Don Nicolas Feasibility Study, due for completion in 2011. Two drill rigs completed the infill and stepout drilling in late July on the Sulfuro Vein, one of the two principal deposits at Don Nicolas. This is to be followed by infill drilling on the Martinetas deposit. Other aspects of the Study, such as more metallurgical testing, geotechnical studies and a hydrology program are in progress.
Exploration continued at a number of projects. In the large tenement package in the Deseado Massif in Patagonia, a 4,500 line kilometer helicopter-borne magnetic and radiometric survey has been undertaken to fine tune existing exploration targets and locate new ones. Highly encouraging rock chip analysis and geophysical anomalies have identified drill targets on the 700 meter long outcropping breccia zone at Escondido, contiguous to Mariana Resources Las Calandrias discovery. Scout drilling commenced at the end of July. Good progress was also made in better understanding the undrilled 1.3 kilometer vein at Pan de Azucar with further confirmatory elevated gold outcrop samples obtained. In addition, a 300 meter long, gold anomalous, breccia envelope has been identified around the southern portion of the vein.
Results of a 12 hole, 4,856 meter reverse circulation drilling program were announced in July 2010 for the Bethania porphyry gold project, which is situated approximately 10 kilometers from Corihuarmi. Extensive intersections of low grade gold, copper and molybdenum mineralization were identified in six of the holes which provide substantial encouragement to continue exploring this large alteration zone. A new exploration project in southern Peru, known as Killincho, was acquired, and exploration commenced within a known gold producing area.
The planned drilling was completed at the La Falda Project in Chile and targeted geophysical IP anomalies and auriferous banded quartz veins considered to be associated with a gold porphyry system. Encouraging gold mineralization was encountered deeper in a number of holes which may link to a substantial, largely untested magnetic anomaly. However, further testing is beyond the current funding capacity of Minera IRL. As a result, the agreement with Catalina Resources was extended to 30 September 2010 to allow time to seek another party for the next phase of exploration.
Following the successful listing of Minera IRL on the Canadian TSX in April 2010, the Company sought to issue a tranche of equity to generate liquidity in the Canadian markets and to bolster working capital. However, deteriorating market conditions resulted in the suspension of this process in favour of a US$20 million debt facility provided by Macquarie Bank. These funds are to be used to advance rapidly the Ollachea and Don Nicolas projects toward development.
In closing, I would like to extend my appreciation to our outstanding team and to our loyal shareholders. Together, I believe we continue to build toward a bright and prosperous future.
Courtney Chamberlain
Executive Chairman
Minera IRL Limited 12 August 2010
Minera IRL Limited
Consolidated Statement of Comprehensive Income
3 months 3 months 6 months 6 months Year ended
ended 30 ended 30 ended 30 ended 30 31 December
June 2010 June 2009 June 2010 June 2009 2009
(unaudited) (unaudited) (unaudited) (unaudited) (audited)
US$'000 US$'000 US$'000 US$'000 US$'000
Revenue 9,963 6,610 18,319 13,318 31,856
Cost of sales (4,636) (4,722) (10,392) (9,070) (18,804)
----------------------------------------------------------------------------
Gross profit 5,327 1,888 7,927 4,248 13,052
Administration
expenses (1,965) (996) (3,818) (2,247) (6,637)
Exploration
costs (214) (253) (367) (415) (1,739)
Excess of fair
value of assets
acquired over
consideration - - - - 1,134
----------------------------------------------------------------------------
Operating profit 3,148 639 3,742 1,586 5,810
Finance income 1 3 38 19 36
Finance expenses (105) (85) (170) (415) (402)
----------------------------------------------------------------------------
Net finance
expense (104) (82) (132) (396) (366)
Profit before
tax 3,044 557 3,610 1,190 5,444
Income tax (1,473) (323) (1,797) (663) (2,473)
----------------------------------------------------------------------------
Profit for the
period
attributable to
the equity
shareholders of
the parent 1,571 234 1,813 527 2,971
----------------------------------------------------------------------------
Earnings per
ordinary share
(US cents)
Basic 1.8 0.4 2.1 0.9 4.3
Diluted 1.8 0.4 2.1 0.9 4.3
----------------------------------------------------------------------------
Minera IRL Limited
Consolidated Balance Sheet
As at 30 June As at 30 June As at 31
2010 2009 December 2009
(unaudited) (unaudited) (audited)
US$'000 US$'000 US$'000
Assets
Property, plant and equipment 23,996 24,720 25,390
Intangible assets 43,400 14,710 34,197
Available for sale investments 921 - 1,567
Deferred tax asset 504 - 426
Other receivables 3,648 - 2,808
----------------------------------------------------------------------------
Total non-current assets 72,469 39,430 64,388
----------------------------------------------------------------------------
Inventory 2,501 936 1,526
Other receivables and
prepayments 4,075 4,965 1,714
Cash and cash equivalents 6,574 5,141 14,218
----------------------------------------------------------------------------
13,150 11,042 17,458
Non-current assets held for
sale 600 - 600
----------------------------------------------------------------------------
Total current assets 13,750 11,042 18,058
----------------------------------------------------------------------------
Total assets 86,219 50,472 82,446
----------------------------------------------------------------------------
Equity
Share capital 66,856 41,459 65,784
Foreign currency reserve 129 129 129
Share option reserve 1,736 1,259 1,363
Accumulated losses (1,587) (5,844) (3,400)
----------------------------------------------------------------------------
Total equity attributable to
the equity shareholders of the
parent 67,134 37,003 63,876
----------------------------------------------------------------------------
Liabilities
Provisions 1,577 1,349 1,463
Other long term liabilities 1,921 3,212 1,843
----------------------------------------------------------------------------
Total non-current liabilities 3,498 4,561 3,306
----------------------------------------------------------------------------
Interest bearing loans 2,500 3,500 3,511
Current tax 1,936 664 951
Trade and other payables 11,151 4,744 10,802
----------------------------------------------------------------------------
Total current liabilities 15,587 8,908 15,264
----------------------------------------------------------------------------
Total liabilities 19,085 13,469 18,570
----------------------------------------------------------------------------
Total equity and liabilities 86,219 50,472 82,446
----------------------------------------------------------------------------
Minera IRL Limited
Consolidated Statement of Changes in Equity
Foreign Share Profit
Share currency Option and loss
capital reserve reserve account Total
US$'000 US$'000 US$'000 US$'000 US$'000
Balance 1 January 2009 41,459 129 1,173 (6,371) 36,390
Profit for the period to 30
June 2009 - - - 527 527
Reserve for share option
costs - - 86 - 86
----------------------------------------------------------------------------
Balance 30 June 2009 41,459 129 1,259 (5,844) 37,003
----------------------------------------------------------------------------
Balance 1 July 2009 41,459 129 1,259 (5,844) 37,003
Profit for the period to 31
December 2009 - - - 2,444 2,444
New share capital subscribed 25,166 - - - 25,166
Cost of raising share
capital (841) - - - (841)
Reserve for share option
costs - - 104 - 104
----------------------------------------------------------------------------
Balance 31 December 2009 65,784 129 1,363 (3,400) 63,876
----------------------------------------------------------------------------
Balance 1 January 2010 65,784 129 1,363 (3,400) 63,876
Profit for the period to 30
June 2010 - - - 1,813 1,813
Issue of share capital 1,072 - - - 1,072
Reserve for share option
costs - - 373 - 373
----------------------------------------------------------------------------
Balance 30 June 2010 66,856 129 1,736 (1,587) 67,134
----------------------------------------------------------------------------
Minera IRL Limited
Consolidated Cash Flow Statement
3 months 3 months 6 months 6 months Year ended
ended 30 ended 30 ended 30 ended 30 31 December
June 2010 June 2009 June 2010 June 2009 2009
(unaudited) (unaudited) (unaudited) (unaudited) (audited)
US$'000 US$'000 US$'000 US$'000 US$'000
Cash flows from
operating
activities
Operating profit 3,148 639 3,742 1,586 5,810
Depreciation 735 1,081 2,421 2,504 5,509
Impairment of
exploration
assets - 69 - 112 -
Share option
costs 260 43 373 86 190
Provision for
mine closure
costs 57 57 114 114 228
(Gain)/loss on
disposal of
assets (113) - 175 - 28
Excess of fair
value of assets
acquired over
consideration - - - - (1,134)
Foreign exchange
losses relating
to non-
operating items - - 305 - 250
Increase in
inventory (1,426) (328) (975) (163) (753)
(Increase)/
decrease in
other
receivables and
prepayments (3,542) (2,522) (3,279) 3,205 5,097
Increase/
(Decrease) in
trade and other
payables 1,593 112 426 (1,037) 709
Corporation tax
paid - - (811) (2,200) (4,473)
----------------------------------------------------------------------------
Net cash flow
from operations 712 (849) 2,491 4,207 11,461
Interest
received 1 3 38 19 36
Interest paid (105) (85) (170) (284) (140)
----------------------------------------------------------------------------
Net cash flow
from operating
activities 608 (931) 2,359 3,942 11,357
----------------------------------------------------------------------------
Cash flows from
investing
activities
Acquisition of
subsidiaries
net of cash
received - - - - (1,843)
Sale of
investments 363 - 471 - -
Acquisition of
property, plant
and equipment (294) (206) (1,027) (975) (3,581)
Acquisition of
intangible
assets
(exploration
expenditure) (5,014) (2,006) (9,203) (4,318) (12,416)
----------------------------------------------------------------------------
Net cash outflow
from investing
activities (4,945) (2,212) (9,759) (5,293) (17,840)
----------------------------------------------------------------------------
Cash flows from
financing
activities
Proceeds from
the issue of
ordinary share
capital - - 72 - 15,300
Cost of raising
share capital - - - - (841)
Repayment of
loans - - (11) (2,500) (2,500)
----------------------------------------------------------------------------
Net cash inflow
from financing
activities - - 61 (2,500) 11,959
----------------------------------------------------------------------------
Net (decrease)/
increase in
cash and cash
equivalents (4,337) (3,143) (7,339) (3,851) 5,476
Cash and cash
equivalents at
beginning of
the period 10,911 8,284 14,218 8,992 8,992
Exchange rate
movements - - (305) - (250)
----------------------------------------------------------------------------
Cash and cash
equivalents at
end of the
period 6,574 5,141 6,574 5,141 14,218
----------------------------------------------------------------------------
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 2009 will be 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 2009.
This Interim Report has been approved for issue by the Board of Directors on 12 August 2010.
Earnings per share
The earnings per share for the second quarter has been calculated using the profit attributable to ordinary shareholders of US$1,571,000 (second quarter 2009: US$234,000) and the weighted average number of ordinary shares in issue during the three months to 30 June of 85,760,642 (second quarter 2009: 61,883,422).
The earnings per share for the first half has been calculated using the profit attributable to ordinary shareholders of US$1,813,000 (first half 2009: US$527,000) and the weighted average number of ordinary shares in issue during the six months to 30 June 2010 of 85,697,147 (first half 2009: 61,883,422).
Issue of shares
On 24 June 2010 the Company issued 1,111,111 ordinary shares at a price of US$0.90 per share as a result of the conversion of a US$1 million loan by Resource Capital Fund.
Transactions of an unusual nature
There were no transactions of an unusual nature during the six months to 30 June 2010.
Seasonal Influences
The business of the Company is not generally subject to seasonal influences.
Related parties
During the period the Company has received registrar services from Computershare Investor Services (Jersey) Limited, a company related through a common director. The contract for these services provides for a minimum annual charge of GBP3,000 to be paid by the Company.
In addition the Company has received consultancy services from Hamilton Capital Partners Limited for whom a director acts as a consultant adviser. The contract for these services provides for an annual charge of GBP24,000. The contract will end on 30 September 2010.
Subsequent events
On 7 July 2010 the Company entered into an agreement with Macquarie Bank Limited for a US$20 million loan facility. In July 2010, US$7.5 million of this facility was drawn with US$2.5 million being used to repay the existing loan from Macquarie Bank. In consideration for this drawdown and under the terms of the agreement, the Company issued to Macquarie Bank an option over 6,944,444 shares of Minera IRL Limited. This option is exercisable at a price of US$1.08 per share up to and including 28 June 2013. The previous options issued to Macquarie Bank over a total of 4,861,048 shares have been cancelled.
The Directors of Minera IRL are listed in the Group's Annual report for the year ended 31 December 2009.
By order of the Board
C Chamberlain, Executive Chairman
The Toronto Stock Exchange neither approves nor disapproves the information contained in this News Release.
Contacts:
Minera IRL Limited
Trish Kent
Vice President, Corporate Relations
+511 4181230
Arbuthnot Securities (Nominated Adviser & Broker, London)
Hugh Field/Richard Johnson
+ 44 (0)20 7012 2000
The Equicom Group Inc. (Investor Relations, Canada)
James Kitchen
Account Executive
+1 416 815 0700 (ext 267)
Bankside Consultants (Financial PR, London)
Simon Rothschild
+ 44 (0)20 7367 8888
Bankside Consultants (Financial PR, London)
Louise Mason
+ 44 (0)20 7367 8888
