Minera IRL Announces 2009 Year-End Results
LONDON, April 28 /CNW/ - Minera IRL Limited ("Minera IRL" or the "Company"), (TSX:IRL) (AIM:MIRL) (BVL:MIRL) Latin America focused gold mining, development and exploration company, today announced its audited results for the year ended December 31, 2009 and outlined Company developments during the same year.
2009 Highlights:
- Corihuarmi gold mine production of 33,012 ounces in 2009 above
expectations, at a cash operating cost of US$341 per ounce
- Gold sale average price of US$988 per ounce
- EBITDA of US$11.3 million, profit before tax of US$5.4 million and
profit after tax of US$3.0 million
- Successful placing of shares raised US$14.2 million net of expenses
- Cash at 31 December 2009 of US$14.2 million
- Major gold discovery at Ollachea; positive scoping study based upon
1.3 million ounces and pre-feasibility study commenced
- Acquisition of Hidefield Gold, including the Don Nicolas project in
Patagonia, Argentina, with a resource base of 359,000 ounces
- Resource inventory increased from 0.1 million ounces to 1.8 million
ounces
Highlights subsequent to year-end:
- Completion of listing on Toronto Stock Exchange (TSX:IRL)
"In 2009, we advanced mine development initiatives on two new projects, Ollachea and Don Nicolas, and established a solid resource base of 1.8 million ounces," said Courtney Chamberlain, Executive Chairman of Minera IRL. "Our Corihuarmi Gold Mine continues to provide good cash flow and the financial flexibility to support our project pipeline. The Company continues to evolve and has been accepted on the main board of the Toronto Stock Exchange (TSX) providing us with improved exposure to a marketplace with a sophisticated mining audience."
Financial Results
Production from the Corihuarmi Gold Mine yielded sales revenue of US$31.9 million (2008: US$43.6 million). This reduction from revenues in 2008 was fully expected by the management and was the result of the lower grade of the Susan deposit, which accounted for most of the ore mined during the year. Mining and treatment of 13% more ore in 2009 also resulted in an 8% increase in the cost of sale to US$18.8 million (2008: US$17.3 million). The combined effect was a reduced gross profit of US$13.1 million (2008: US$26.2 million). At the same time, administrative expenses and exploration write offs were reduced to US$6.6 and US$1.7 million respectively, and the acquisition of Hidefield Gold PLC yielded a credit to income of US$1.1 million which represents the excess of the fair value of the assets acquired over the price paid. The result was an operating profit of US$5.8 million (2008: US$15.6 million). The tax charge, which arises solely in Peru, remained at a similar level to 2008 because in 2009 there were no accumulated losses to offset against the profit for the year, as had been the case in 2008.
The group spent a total of US$16.4 million on exploration during the year (2008: US$6.7 million), excluding the acquisition of the Hidefield group, of which US$14.7 million was added to the intangible assets of the group (US$11.9 million for the Ollachea project) and US$1.7 million was recognised as a cost in the income statement.
At the end of 2009 the group had a cash balance of US$14.2 million, leaving the company in a strong position to enter the next phase of its development.
Projects
Corihuarmi Gold Mine
The Corihuarmi Gold Mine continued to perform well throughout the year producing strong cash flow for the Group. Mining moved from the Diana Pit to the larger, but lower grade, Susan Pit in early 2009. A total of 33,012 ounces was produced, which was above expectations, at a cash cost of US$341 per ounce. The Company policy of remaining unhedged continued with an average sale price of US$988 per ounce achieved during the year, which was US$119 per ounce higher than 2008. A new Life-of-Mine plan was produced with the updated ore reserve more than replacing depletion in 2008, which extends the mine life to at least mid 2013. In addition, more than 50,000 ounces of broken scree material below the Susan and Diana cliff faces has been classified as an Inferred Resource and is expected to give a further significant extension to Corihuarmi's life.
Ollachea Project
Excellent progress has been made at the Ollachea Project in the Puno District of southern Peru. Two diamond rigs have been drilling continuously since October 2008 and thus far, more than 80 holes with over 30,000 meters have been completed. The strike length of the central Minapampa Zone has been extended to almost 700 meters and has provided the basis for a Scoping Study which was completed by Coffey Mining in November 2009. The estimated Inferred Resource in this zone, based on 15,400 meters of drilling, totaled 8.9 million tonnes grading 4.5 grams per tonne gold and containing 1.3 million ounces.
The Scoping Study indicated that a viable development was possible with an underground mine producing 1 million tonnes per annum for treatment through a conventional carbon-in-leach plant. A projected 117,000 ounces per annum will be produced over a nine year mine life at a cash cost of approximately US$400 per ounce. Capital cost is estimated at US$156 million. With these positive indications, the Company has embarked upon a pre-feasibility study. If all goes to plan, the mine could be up-and-running during 2014.
The Minapampa Zone has not been closed off along strike nor down dip. Exploration continues over a strike length of almost two kilometers, including the Minapampa Zone, with many encouraging intersections.
Patagonia
In December 2009 the Company completed the acquisition of Hidefield Gold Plc for a consideration of 9,767,291 Minera IRL Limited shares. This transaction has brought the Company a new business unit in mining friendly Santa Cruz State in the Patagonia region of Argentina. Key to this transaction is the Don Nicolas Project with a resource base of 359,000 ounces, management believes can be advanced to become the Group's next mine by late 2012 or early 2013. A feasibility study is underway and two drill rigs are working on better defining and extending the known resources.
Another benefit of this Patagonia initiative is the very large exploration license of more than 2,500 square kilometers in a geological region known as the Deseado Massif within the Hidefield portfolio. A number of important discoveries have been made in recent years within the region and our ground is highly prospective with many identified targets. A new exploration program is underway.
Other Projects
During the year the Company has moved ahead on a number of new exploration initiatives. An Agreement was signed with Minera Monterrico Peru SAC in which the Bethania ground package was consolidated. This project is only 10 km from Corihuarmi and presents a large gold copper porphyry target. A 12 hole preliminary drilling program was completed in early 2010 and results are being assessed.
Another gold porphyry is being drill tested in the Maricunga District in Chile where Minera IRL has an option to earn a 75% interest. Early in the year, the Company acquired an option for 100% of the Quilivara Project in southern Peru where Newcrest had sampled encouraging gold surface samples over a wide area. In addition, Minera IRL acquired an option over the Veca Project in Peru, and having assessed it, decided not to continue.
The Report and Accounts for the year ended December 31, 2009 will be posted to shareholders shortly and are available from sedar.com and the Company website www.minera-irl.com.
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 recognized as a Qualified Person for the purposes of National Instrument 43-101.
Minera IRL Limited is the AIM and Lima, Peru 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.
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, Minera IRL Limited does not intend to update any forward-looking statements to conform these statements to actual results.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31
December 2009
Notes 2009 2008
US$000 US$000
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Revenue 31,856 43,568
Cost of sales (18,804) (17,344)
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Gross profit 13,052 26,224
Administrative expenses (6,637) (8,447)
Exploration costs written off (1,739) (2,185)
Excess of fair value of assets acquired
over consideration 2 1,134 -
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Operating profit 5,810 15,592
Finance income 36 151
Finance expense (402) (657)
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Profit before tax 5,444 15,086
Income tax (2,473) (2,563)
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Profit for the year attributable to the
equity shareholders of the parent 2,971 12,523
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Earnings per ordinary share (US cents)
- Basic 4.3 20.2
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- Diluted 4.3 18.0
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CONSOLIDATED BALANCE SHEET as at 31 December 2009
Notes 2009 2008
US$000 US$000
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Assets
Property, plant and equipment 3 25,390 26,249
Intangible assets 4 34,197 10,504
Available for sale investments 2 1,567 -
Deferred tax asset 426 -
Other receivables 2,808 -
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Total non-current assets 64,388 36,753
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Inventory 1,526 773
Other receivables and prepayments 1,714 8,170
Cash and cash equivalents 14,218 8,992
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17,458 17,935
Non-current assets held for sale 2 600 -
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Total current assets 18,058 17,935
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Total assets 82,446 54,688
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Equity
Share capital 65,784 41,459
Foreign currency reserve 129 129
Share option reserve 1,363 1,173
Accumulated losses attributable to the equity
shareholders of the parent (3,400) (6,371)
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Total equity 63,876 36,390
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Liabilities
Provisions 1,463 1,235
Other long term liabilities 1,843 3,081
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Total non-current liabilities 3,306 4,316
Interest bearing loans 3,511 6,000
Current tax 951 2,385
Trade and other payables 10,802 5,597
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Total current liabilities 15,264 13,982
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Total liabilities 18,570 18,298
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Total equity and liabilities 82,446 54,688
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended
31 December 2009
Foreign Share Accumu-
Share currency option lated
Note capital reserve reserve losses Total
US$000 US$000 US$000 US$000 US$000
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Balance at 1 January 2008 41,423 129 543 (18,894) 23,201
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Total comprehensive
income for the year - - - 12,523 12,523
New share capital subscribed 36 - - - 36
Reserve for share option costs - - 630 - 630
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Balance 31 December 2008 41,459 129 1,173 (6,371) 36,390
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Foreign Share Accumu-
Share currency option lated
Note capital reserve reserve losses Total
US$000 US$000 US$000 US$000 US$000
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Balance at 1 January 2009 41,459 129 1,173 (6,371) 36,390
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Total comprehensive
income for the year - - 2,971 2,971
New share capital subscribed 25,166 - - - 25,166
Cost of raising share
capital (841) - - - (841)
Reserve for share
option costs - - 190 - 190
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Balance 31 December 2009 65,784 129 1,363 (3,400) 63,876
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CONSOLIDATED CASH FLOW STATEMENT for the year ended
31 December 2009
Note 2009 2008
US$000 US$000
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Cash flows from operating activities
Operating profit 5,810 15,592
Depreciation 5,509 5,394
Impairment of exploration assets - 51
Share option costs 190 630
Provision for mine closure costs 228 233
Loss on disposals of assets 28 64
Excess of fair value of assets acquired
over consideration 2 (1,134) -
Foreign exchange losses relating to
non-operating items 250 -
Increase in inventory (753) (745)
Decrease/(increase) in other receivables
and prepayments 5,097 (4,620)
Increase in trade and other payables 709 1,289
Corporation tax paid (4,473) (887)
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Net cash flow from operations 11,461 17,001
Interest received 36 151
Interest paid (140) (337)
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Net cash outflow from operating activities 11,357 16,815
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Cash flows from investing activities
Acquisition of subsidiaries net of cash
received 2 (1,843) -
Acquisition of property, plant and equipment (3,581) (11,588)
Acquisition of intangible assets
(exploration expenditure) (12,416) (4,512)
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Net cash outflow from investing activities (17,840) (16,100)
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Cash flows from financing activities
Proceeds from the issue of ordinary share
capital 15,300 36
Cost of raising share capital (841) -
Repayment of loans (2,500) 3,000
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Net cash inflow from financing activities 11,959 3,036
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Net increase in cash and cash equivalents 5,476 3,751
Cash and cash equivalents at beginning of period 8,992 5,241
Exchange rate movements (250) -
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Cash and cash equivalents at end of period 14,218 8,992
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For further information: Minera IRL: Trish Kent, Vice President, Corporate Relations, +511 4181230; Arbuthnot Securities (Nominated Adviser & Broker, London): John Prior, + 44 (0)20 7012 2000; Fox-Davies Capital (Co-broker, London): James Hehn, + 44 (0)20 7936 5200; The Equicom Group Inc. (Investor Relations, Canada): James Kitchen, Account Executive, (416) 815-0700 (ext 267); Bankside Consultants (Financial PR, London): Simon Rothschild, Louise Mason, + 44 (0)20 7367 8888
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