The bit that went in this weekend’s edition of the weakly, fwiw
Minera IRL (MIRL.cse) hires Haywood
The news last week (14) that Minera IRL has (we quote) “…engaged Haywood Securities Inc. to act as financial advisor to Minera in support of the Company’s plans to finance the development of its Ollachea project and the repayment of balances owed to Corporacion Financiera de Desarrollo (COFIDE) as further described in the news release dated November 12, 2020”, was useful in more than one way. First and foremost, it allows us to confirm our presumption of deceit and lies at the centre of MIRL throughout the extended negotiation period with COFIDE. In that time, one of the strategies used by MIRL to keep stakeholders (e.g. you, me) on the hook was incessant talk of late-stage financing deals on the table, all that we needed was to clear the COFIDE mess. Even after the weak deal with Cofide, MIRL continued late last year with its talk of two open CAs and late stages rounds of DD taking place, however last week’s message from MIRL was very different. A simple statement:
You do not go to the time and expense of hiring a full-service Canadian investment bank to run a financing or sale process if you already have either a financing or a sale lined up, Q.E.D.
MIRL’s hiring of Haywood is not a good signal, it tells us we’re no closer to a funding announcement than we were weeks/months/years ago. However, it does allow us once and for all to call its CEO for what he is, which brings the advantage of not having to believe a word that comes out of his mouth. This will surely help in the sales process started by Haywood for MIRL, because that brokerage would not have taken this company on for any equity raise. That would presume the current management would take Ollachea to production and, with the best will in the world toward the efficient on-site team at Corihuarmi, there’s no COO Minebuilder at Minera IRL, no procurement structure, no VP Exploration and no chance those roles are covered by a lawyer CEO who has done nothing for the company in the last two years.
Therefore, Haywood has been brought in to sell and the most likely buyer is Chinese capitals of some shape or form. Perfect business sense of course and Peru would not offer the type of political or diplomatic objection that did for the TMAC deal with Shandong, but it would be the height of irony to see the supposedly loving and caring President community head deliver his community into the hands of those lovers of human rights. Again, considering what we now know about Diego Benavides, it would not come as much of a surprise.
As for our investment, the Haywood engagement improves the chances of a straight sell-out of MIRL to the highest bidder and as the project is still there and as economically robust as ever (works at U$1,300/oz gold, please check the spot price), there’s no reason to suppose that with professionals now taking over we won’t get purchase interest. As there’s no reason to sell the position of ‘reluctant holder’ continues, underscored by the likelihood of nothing happening until mid-year earliest, but with a little more optimism about an eventual deal of some sort.