LIMA, Peru, Dec. 02, 2021 (GLOBE NEWSWIRE) -- Minera IRL Limited (“Minera”, the “Company” or “we”) (BVL:MIRL) (CSE:MIRL) is pleased to provide a summary updating its objectives and achievements for the year, and its expectations for 2022.
After entering into our settlement agreement with Corporation Financiera de Desarrollo (“COFIDE”) at the end of 2020, we started 2021 with one fundamental objective - to advance our projects amid unprecedented uncertainty in the face of COVID-19 and its massive impact on the local and the global economies. Mid-year, we added the election of a new President at the end of a polarized and disruptive campaign, which caused additional concern in international markets and credit rating agencies over our new government’s plans for the mining sector, as well as other industries in Peru.
To begin, we engaged with a well-known and respected Canadian investment bank - Haywood Securities Inc. - to explore potential financing for Ollachea and we retained Australian engineering and mining consulting firm Mining Plus (“Mining Plus”) to update our mineral resource estimate at Corihuarmi and revisit our plan for Ollachea.
As we approach 2022, we would like to reflect on the milestones we have accomplished so far this year, and their significance as key drivers in our effort to advance Ollachea.
Perhaps the most significant highlight to our settlement with COFIDE was that it relieved us of the need to fund the arbitration, enabling us to allocate additional resources to Corihuarmi and Ollachea.
However, COFIDE continues to require our time and attention. First, the settlement agreement needed to be formalized with specific dates for repayment and covenants on both sides. This was achieved on June 24, 2021, when we announced the completion of four inter-related formal settlement documents. Second, COFIDE is still by far our largest creditor, and it holds a security interest in our assets, including Ollachea. This impacts our ability to attract the capital we need in order to advance Ollachea.
Thanks in part to political developments in Peru this year, there is now the possibility to begin new discussions with COFIDE. We are now actively exploring opportunities to modify these credit arrangements in order to make the development of Ollachea more attractive to investors.
Over the past few years, we have been studying the possibility of a lower CAPEX start-up for Ollachea. Using revenue that in prior years funded the arbitration with COFIDE, we retained Mining Plus in March of this year to produce a Preliminary Economic Assessment (“PEA”) to validate this possibility. On September 1, 2021, Mining Plus delivered the PEA, presenting an optimized gold mining project located in the Puno Region with all key permits in place, the necessary surface rights, and critical path milestones accomplished.
The PEA reduced the capital requirements for Ollachea by nearly $100 million to a final start-up cost of $89 million (including a 25% contingency). This has unlocked financing opportunities that were out of reach under the previous scenario, which required an investment of approximately $250 million. Since the beginning of September, we have expanded our effort to finance Ollachea to include alternatives to straight debt or equity and we are currently engaged in active discussions with two operators that have expressed preliminary interest in a strategic alliance to develop Ollachea. These parties have already begun a due diligence review, including through the technical visits to our projects.
We anticipate that these due diligence reviews will continue through the end of the year and into 2022. Although there can be no assurance that these parties will continue to be interested once they complete their due diligence reviews, we hope to receive initial non-binding indicative proposals during the first quarter of 2022.
We are very pleased with the nomination of Mr. Martin Mount for election as an Independent Director at our 2021 Annual General Meeting scheduled for Tuesday, December 14, 2021, in Vancouver, B.C. Mr. Mount is a British Mining Geologist and Project Planning Engineer with more than 50 years of experience working in a variety of Mining Geology & Engineering applications, including mine exploration, and open pit and underground mining operations in Europe, Africa, and the Americas. He has spent half of his career in South America, particularly in Peru and Colombia, where he was part of the senior management team of long-standing and listed mining companies such as Volcan Compañia Minera S.A.A., Minsur S.A., and Sociedad Minera de Santander S.A.S. (Minesa).
Mr. Mount brings extensive experience in the conduct of due diligence, as well as in the preparation of technical audits and reports as required to meet the Australasian Joint Ore Reserves Committee Code (“JORC”) and the Canadian National Instrument 43-101 (“NI 43-101”). Mr. Mount is a “Qualified Person” as defined by JORC and NI 43-101 and we believe that this, combined with his experience as a geologist and in mine planning, will add yet another desirable technical component to our effort to advance our projects.
We have always been a pioneer in our efforts to engage with our mine communities. This has not always been popular with the industry or even with the state, but we believe that the recent political changes in Peru validate our choice to engage. A project such as Ollachea, with its social license, community support and our exemplary track record in social responsibility, has the potential to attract the new government’s attention and boost its interest in encouraging the mining sector.
Our communities will continue to remain a priority in 2022, ensuring local participation in the provision of labour and skills for both our projects, and the implementation of social programs that boost local economies, support sustainability and cultural heritage preservation.
An initial feasibility study completed in 2006 provided for a small operation with an estimated life span of only four years. Commercial production commenced in 2008, and since then Corihuarmi has consistently delivered steady production. The resource has been updated three times, with the most recent Mineral Resource Estimate completed by Mining Plus in August of this year as per NI 43-101. On this basis the Company expects to continue producing gold to August 2024.
We continue to optimize operations at the mine, focusing primarily on drill and blast and load and haul operations, which are both integral to the initial gold recovery process. Corihuarmi continues to deliver solid operating results and revenue from gold production at this mine has historically provided us with adequate operating capital.
Diego Benavides, CEO of Minera, said: “The past few years have been challenging, but we have remained positive, and our goal has remained consistent. I believe that our achievements this year have built a solid foundation on which to build Ollachea. I look forward to adding Martin Mount to our Board and to a successful 2022, and I have every confidence that we will achieve a result that creates value for our shareholders, the communities in which we operate and all our stakeholders.”
About Minera IRL
Minera IRL Limited is the CSE and BVL listed holding company of Minera IRL S.A. and Compañía Minera Kuri Kullu S.A., two precious metal mining companies engaged in mining exploration and development in Peru, with a primary focus on gold. Minera is led by an agile and experienced senior management team with extensive mining industry experience, particularly in South America. Minera operates the Corihuarmi Gold Mine located 5,000 meters above sea level in Central Peru and is currently advancing the Ollachea Gold Project located in the Department of Puno, Southern Peru. For more information, please visit www.minera-irl.com.
On behalf of the Board of Directors of Minera IRL Limited
CEO and Director
FOR FURTHER INFORMATION, PLEASE CONTACT:
Minera IRL Limited
+51 1 418 – 1230
Manager, Investor Relations
+51 1 418 – 1230
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 press release constitutes “forward-looking statements”. Forward-looking statements in this press release include the expectation that the Company can modify its credit arrangements with COFIDE in order to make the development of Ollachea more attractive to investors, its anticipation as to the timing and result of due diligence reviews currently underway, and its belief that its history with the community at Ollachea has the potential to attract the new government’s attention and boost its interest in encouraging the mining sector. Forward looking statements are based on assumptions. While management believes these assumptions and statements are reasonable in context, 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 results and future performance 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.
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, Peru’s ability to contain the COVID-19 crisis, changes in the capital or precious metals markets, and changes to legislative, political, social, health or economic developments both within Peru and in general.