29th Jun 2007 11:37
Minera IRL Limited29 June 2007 Minera IRL Limited Preliminary Results for year ended 31st December 2006 LONDON: 29 June 2007 - Minera IRL Limited ("MIRL" or "the Company"), theprecious metal mining and exploration company with assets in Peru, Argentina andChile, announces its audited results for the year ended 31 December 2006 andCompany developments during the year. Highlights: • Commencement of trading on the London AIM market on 12 April 2007 • Completed Bankable Feasibility Study and Environmental Impact Assessment ("EIA") on the Corihuarmi project • Acquisition of Jaguelito Project in San Juan Province, Argentina • Acquisition of the Ollachea Gold Project by competitive tender from Rio Tinto • Other projects advanced with drill targets defined at Cushuro and Chama Executive Chairman Courtney Chamberlain commented: "With production from Corihuarmi expected to commence in the first quarter of2008, the variety of other projects under investigation and our vigorousprogramme to identify and acquire new projects, your Company is well positionedto grow and prosper." The Report and Accounts for the year ended 31 December 2006 will be posted toshareholders today and are available from the Company's websitewww.minera-irl.com . For more information contact: Minera IRL +61 408 888 803Courtney Chamberlain, Executive Chairman Arbuthnot Securities + 44 (0)20 7012 2000Paul VanstoneInna Vassina Bankside Consultants + 44 (0)20 7367 8888Simon RothschildLouise Mason CHAIRMAN'S STATEMENT I am pleased to present this annual report to shareholders, our first as apublicly listed company. The commencement of trading on the London AIM market on12 April 2007 was the culmination of over six years of laying the foundations ofour emerging mining company focused on South America. Last year represented a period of advance and diversification for the Companywith a number of notable achievements. By year end we had a portfolio of sevenprojects in Peru, Argentina and Chile led by a capable and experiencedmanagement team working from a base in Lima, Peru. We restructured the Companyand moved the registration of Goldmin Holdings from the Cayman Islands to Jerseyunder the new name of Minera IRL Limited. This provided a more appropriatestructure for the ensuing public listing in which we raised £11.4 million,mostly from new institutional investors. Projects The Company completed a bankable feasibility study and Environmental ImpactAssessment (EIA) on its Corihuarmi Project located 160km southeast of Lima,Peru. This project is predicated on a minable reserve of 4 million tonnescontaining 143,000 ounces of gold. The plan is for a 1 million tonne per annumconventional open cut mining and heap leach operation, supported by projectionsof modest waste mining requirements and good metallurgical recovery. Establishedadditional resource and indications of exploration upside provide realisticexpectations for a significant extension to the initial four and a half yearmine life. With projections of robust project economics at Corihuarmi, the EIA was lodgedand subsequently approved by the Peruvian government. In May 2007, the Board ofDirectors formally committed US$16.6 million from the Company's cash reservesfor project development. Construction mobilization commenced immediately andcommissioning is expected by year end with gold production commencing in thefirst quarter of 2008. At that time, Minera IRL Limited will join the ranks ofproducing mining companies with a projected output of over 35,000 ounces in2008. Corihuarmi is expected to provide the strong cash flow to fund furtherprojects and ensure the continuing development of the Company. During the year, the Company acquired the Jaguelito Project in San JuanProvince, Argentina. This silver-gold project had been explored between 1996 and2002 by Mexico based Minera Penoles SA. Penoles's 23,000 meters of drillinggenerated some very encouraging results and its database and Scoping Study onthe main two known mineralized zones, Capote and Alcatraz, provided a strongincentive for this acquisition. In September 2006, Minera IRL commenced a pre-feasibility study on Jaguelito.This is expected to take approximately twelve months and includes an in-filldrilling programme and detailed metallurgical studies. The 5,762 meter drillingprogramme was completed in April 2007 and defined an oxidized resource of 5.6million tonnes containing approximately 158,000 ounces of gold and 10.4 millionounces of silver using a 0.5g/t gold-equivalent cut-off. The silver content inCapote in this latest resource estimate is considerably less than that projectedby Penoles, largely due to a more constrained high grade feeder zone. AtAlcatraz, a high grade gold zone is not yet fully understood. The Company is nowevaluating the merits of the defined resource and also developing an explorationstrategy to expand the known mineralized zones and make new discoveries on thishighly prospective tenement package. The Ollachea Gold Project, located in southern Peru, was acquired by competitivetender from Rio Tinto. This represented a highly prized acquisition in what iswidely considered to be an emerging slate belt gold district. Limitedexploration in the late 1990s included five drill holes, all of which hadsignificant intersections of elevated gold values, levels which couldpotentially be mined, and all holes finished in mineralization. Subsequentsurface sampling by Rio Tinto defined a large area of elevated gold results. Efforts by Minera IRL Limited at Ollachea have been largely directed towardbuilding strong community relations with the objective of signing a surfacerights agreement. Once this surface rights agreement is in place, anticipated tobe in mid-2007, exploration will commence with the immediate objective offurther defining targets which can be evaluated by an exploratory drillingprogramme as soon as practical. Other projects were advanced with drill targets defined at Cushuro and Chama.The Company's generative programme continued with a number of new opportunitiesunder consideration. Included in this initiative is consideration of expandinginto Colombia, where the Company has investigated a number of interesting goldproperties. Board of Directors I am pleased to welcome Graeme Ross and Terry Streeter as new members of ourBoard of Directors. Graeme is a resident of Jersey and a director of a number ofpublic companies. He brings strong commercial and regulatory experience to ourgroup. Terry is an investor in a number of international mining companies andbrings a wealth of experience of the Mining Industry. I wish to thank Peter Bradford and Arnold Offenberg who retired from the Boardafter a number of years of valuable contribution. Corporate Governance Minera IRL Limited has well defined policies that govern the Company. Strictenvironmental guidelines are followed at all projects and the Corihuarmi Mine isbeing constructed under stringent environmental controls which comply withinternational standards. We have a very strong community relations team and atrack record of working closely with local communities in all project areas. Inaddition to local employment and training, our programmes cover other areas ofsocial importance including health, education and Company sponsored projectsaimed at sustainable development. The Board of Directors maintains audit and remuneration committees which furtherassist in the governance of the Company. Public and investor relationsmanagement have been developed coincident with the move into the public arena. Current Investment Climate and Country Outlook The mining investment climate is strong. Precious metal prices continued tostrengthen during 2006 and there appears to be widespread confidence that priceswill remain strong in the short to medium term. There also appears to be appealin the equities markets for mining companies with cash flow businesses. This canonly be seen as beneficial to Minera IRL Limited. To provide better exposure to investors in South America, the Company hasinitiated the process of establishing a secondary listing on the Lima, Perustock exchange. A number of small exploration companies have experienced stronginvestor interest and sound trading after listing on the Lima exchange in recentmonths. It is expected that this step would enhance the liquidity of theCompany's shares. Elections were held in Peru in mid-2006 and President Alan Garcia's programmehas been well received. The Company considers Peru to be a very attractivecountry in which to work and invest. Likewise, San Juan Province in Argentinaremains a strongly pro-mining environment in which to do business. I wish to convey my sincere thanks to all employees of the Company for theirdedication and perseverance. I would also like to take this opportunity to thankall shareholders for their support during the past year. With production from Corihuarmi expected to commence in the first quarter of2008, the variety of other projects under investigation and our vigorousprogramme to identify and acquire new projects, your company is well positionedto grow and prosper. Courtney Chamberlain Executive Chairman Minera IRL Limited 27 June 2007 CONSOLIDATED INCOME STATEMENT for the year ended 31 December 2006 Notes 2006 2005 US$000 US$000 Revenue - -Cost of sales - -Gross profit - -Other income 171 -Administrative expenses (2,768) (1,524)Exploration costs written off (747) (1,775)Other operating expenses - (332)Operating loss (3,344) (3,631)Finance expense (56) -Loss before and after tax (3,400) (3,631)Loss for the period (3,400) (3,631) Loss per ordinary share (US cents)- Basic and diluted (13.8) (21.8) CONSOLIDATED BALANCE SHEET as at 31 December 2006 Notes 2006 2005 US$000 US$000AssetsTangible assets 2 5,648 86Intangible assets 3 1,436 3,582Trade and other 1,059 701receivablesTotal non-current assets 8,143 4,369Other receivables and 298 111prepaymentsCash and cash equivalents 1,402 200Total current assets 1,700 311Total assets 9,843 4,680 EquityShare capital 14,363 55Share premium - 8,799Other Reserves 129 129Profit and loss account (8,534) (5,134)Total equity 5,958 3,849 LiabilitiesInterest bearing loans 3,000 -Total non-current 3,000 -liabilitiesTrade and other payables 885 831Total current liabilities 885 831Total liabilities 3,885 831Total equity and 9,843 4,680liabilities The financial statements were approved and authorised for issue by the Board andwere signed on its behalf on 27 June 2007. Courtney ChamberlainExecutive Chairman CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2006 Share Share Foreign Profit Total capital premium currency and loss reserve account Note US$000 US$000 US$000 US$000 US$000 Balance at 1 January 2005 35 3,503 (61) (1,503) 1,974Loss for the period - - - (3,631) (3,631)New share capitalsubscribed 20 5,296 - - 5,316Gain onconsolidation offoreign subsidiary - - 190 - 190Balance 31 December2005 55 8,799 129 (5,134) 3,849 Note Share Share Foreign Profit capital premium currency and loss reserve account Total US$000 US$000 US$000 US$000 US$000Balance at 1 January 2006 55 8,799 129 (5,134) 3,849Loss for the period - - - (3,400) 3,400)New share capitalsubscribed 19 5,490 - - 5,509Transfer sharepremium toshare capital 14,289 (14,289) - - -Balance 31 December2006 14,363 - 129 (8,534) 5,958 CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31 December 2006 Note 2006 2005 US$000 US$000Cash flows from operating activitiesOperating loss (3,344) (3,631)Depreciation 21 5Impairment of exploration 84 1,417assetsLoss or disposals of assets 36 -Increase in other receivables (545) (350)and prepaymentsIncrease in trade and other 54 686payablesCash used in operations (3,694) (1,873)Interest paid (56) -Net cash outflow from operating (3,750) (1,873)activitiesCash flows from investingactivitiesAcquisition of property, plant (122) (81)and equipmentAcquisition of intangible (3,435) (3,462)assets (explorationexpenditure)Net cash outflow from investing (3,557) (3,543)activitiesCash flows from financingactivitiesProceeds from the issue of 5,509 5,472ordinary share capitalReceipt of loans 3,000 -Net cash inflow from financing 8,509 5,472activitiesNet increase in cash and cash 1,202 56equivalentsCash and cash equivalents at 200 145beginning of periodCurrency translation adjustments - (1)Cash and cash equivalents at 1,402 200end of period NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31 December 2006 NOTE 1 SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation The financial statements are presented in United States dollars, rounded to thenearest thousand, and have been prepared on the historical cost basis or thefair value basis where the fair valuing of relevant assets and liabilities hasbeen applied. In common with many exploration and mining companies, the Company raises financefor its activities in discrete tranches to finance itself for limited periodsonly. Further funding is raised as and when required, the most recent being inApril 2007. Having taken into account the proceeds of the recent placing of shares, theDirectors of the Company consider that it will have sufficient funds to bringthe Corihuarmi mine into production. To the extent that there are cost overrunsin commissioning the mine, or delays in bringing it into production, there areactions that they can and will take to enable the Company to continue as a goingconcern for the foreseeable future. The following significant accounting policies have been adopted in thepreparation and presentation of the financial report: Deferred development costs When the technical and commercial feasibility of an area of interest has beendemonstrated and the appropriate mining licence has been issued, the area ofinterest enters its development phase. The accumulated costs are transferredfrom exploration and evaluation expenditure and reclassified as DevelopmentExpenditure. Once mining commences the asset is amortised on a depletion percentage basis.Provision is made for impairments to the extent that the asset's carrying valueexceeds its net recoverable amount. Deferred exploration costs Exploration and evaluation expenditure incurred is accumulated in respect ofeach identifiable area of interest. These costs are only carried forward to theextent that they are expected to be recouped through the successful developmentof the area or where activities in the area have not yet reached a stage thatpermits reasonable assessment of the existence of economically recoverablereserves. Accumulated costs in relation to an abandoned area are written off infull against the result in the year in which the decision to abandon the area ismade. The recoverability of the deferred exploration cost is dependent upon thediscovery of economically recoverable ore reserves, continuing compliance withthe terms of relevant agreements, the ability of the Group to obtain thenecessary financing to complete the development of ore reserves, and the futureprofitable production or profitable disposal of the area of interest. A regular review is undertaken of each area of interest to determine theappropriateness of continuing to carry forward costs in relation to that area ofinterest. NOTE 2 TANGIBLE ASSETS Deferred Computers development Motor and office costs vehicles equipment Total US$000 US$000 US$000 US$000 CostBalance at 1 January 2005 - - 11 11Additions - 49 32 81Balance 31 December 2005 - 49 43 92 Balance at 1 January 2006 - 49 43 92Additions - 68 54 122Disposals - (30) (7) (37)Transfers from deferred 5,497 - - 5,497exploration costsBalance 31 December 2006 5,497 87 90 5,674 Depreciation and impairment lossesBalance at 1 January 2005 - - 1 1Depreciation charge for - - 5 5the yearAt 31 December 2005 - - 6 6 Balance at 1 January 2006 - - 6 6Depreciation charge for - 10 11 21the yearDisposals - - (1) (1)At 31 December 2006 - 10 16 26 Carrying amountsAt 1 January 2005 - - 10 10Balance 31 December 2005 - 49 37 86 At 1 January 2006 - 49 37 86Balance 31 December 2006 5,497 77 74 5,648 NOTE 3 INTANGIBLE ASSETS Deferred exploration costs US$000CostBalance 1 January 2005 1,689Additions 3,329Exchange adjustments (19)Balance 31 December 2005 4,999 Balance at 1 January 2006 4,999Additions 3,435Transferred to deferred (5,497)development costsBalance 31 December 2006 2,937 ImpairmentBalance at 1 January 2005 -Provision for impairment 1,417Balance 31 December 2005 1,417 Balance at 1 January 2006 1,417Provision for impairment 84Balance 31 December 2006 1,501 Carrying amountsAt 1 January 2005 1,689At 31 December 2005 3,582 At 1 January 2006 3,582Balance 31 December 2006 1,436 An external feasibility study of the Corihuarmi project was completed in April2006 and determined that the prospect represented an economically viable mineproject. The deferred cost was therefore transferred from exploration todevelopment (note 9). During 2006 and 2005 the Group wrote off expenditure relating to a number ofmining concessions. The impairment occurred due to unfavourable results from theexploration activities in the individual concessions. These amounts have beencharged to the income statement. NOTE 4 The directors do not recommend the payment of a dividend. NOTE 5 The financial information set out above does not constitute the Group'sstatutory information for the years ended 31 December 2006 and 2005, but isderived from those accounts. Statutory accounts for 2006 will be delivered tothe Jersey Registrar of Companies after the Company's Annual General Meeting.The auditors have reported on these accounts and their reports were unqualified. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
MIRL.L