Minera IRL S.A. Reports Sale of Gold to a New Certified US Buyer
- This sale guarantees resources for Minera IRL Ltd and the payment of salaries, social programmes and service providersLima, 21 October 2015; Minera IRL S.A. (“the Company”) reports the sale of 1,074 ounces of gold to a new certified buyer based in the United States, in order to continue the normal development of Company activities and to meet contractual commitments with Scotiabank.
The Company has met all legal procedures for the sale and shipment of the Corihuarmi Gold Mine produced gold, after the previous buyer declined to continue with the commercial tie.
Earlier in the year, Scotiabank provided Minera IRL S.A. with a mining closure environmental performance bond which is required by law for presentation to the Ministry of Mining in January of each year. As banks are now expecting full collateral backing for these guarantees it was agreed that funds generated by Corihuarmi gold sales would be deposited in the Company’s account with Scotiabank in Lima. Previously these funds were transferred to the Minera IRL S.A. account in the Royal Bank of Scotland.
The Company maintains its normal activities at the Corihuarmi Gold Mine and gold production will continue to be sold to the new buyer in order to guarantee resources for Minera IRL Limited, as well as to pay salaries, social programmes and service providers to Minera IRL S.A.
Income generated by the sale of Minera IRL S.A. gold will be deposited in the Company’s account in Lima as was agreed since the 30 July 2015.
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Minera IRL Limited Provides Corporate and Operational Update
Oct 21, 2015 – 06:02 ET
LIMA, PERU–(Marketwired – Oct. 21, 2015) –
Minera IRL Limited (“Minera IRL” or the “Company”)
(AIM:MIRL)(BVLAC:MIRL)(TSX:IRL) provides the following corporate and
The Company has to date used offtake arrangements whereby the
proceeds from its gold produced at the Corihuarmi mine have been paid
into a Jersey bank account operated by Minera IRL, a company
incorporated in Jersey, via a Swiss refiner. This has allowed the
Company to maintain full control of the proceeds from gold sales which
can then be disseminated down to its operating subsidiaries as required.
However, due to recent efforts by Mr. Diego Benavides, the
former interim CEO of the Company, in his role as President and General
Manager of the Company’s Peruvian subsidiaries, to amend the existing
offtake arrangements such that the proceeds from the sale of gold are
directed straight to the Peruvian subsidiaries, the Company’s existing
offtaker has suspended receipt of shipments of gold in doré for refining
and sale. Furthermore, the Company believes that Mr. Diego Benavides
may be seeking alternative solutions for the sale of gold doré produced
from the Corihuarmi mine, which would likely involve the proceeds being
transferred directly to the Peruvian subsidiaries. The Company believes
1,070 ounces of gold are currently held in doré form which would be
shipped for refining and sale. A further 1,000 ounces are expected to be
capable of shipment shortly.
The Company currently has no control over the counterparty
for its gold sales from the Corihuarmi mine and is unable to specify the
recipient of the proceeds.
As previously announced, the Company is in the process of
dismissing Mr. Diego Benavides from his role as President and General
Manager of the Company’s two Peruvian subsidiaries. This process is
expected to take several months under Peruvian corporate law.
As announced on 21 September 2015, the Company has
significant working capital constraints caused primarily by recent lower
gold prices adversely affecting the profitability of the Company’s
low-grade Corihuarmi mine, which has been in operation since 2008, but
is nearing the end of its mine life.
Furthermore, under the existing US$70 million bridge loan
structured by the Peruvian state-owned development and promotion bank,
Corporación Financiera de Desarrollo S.A. (“COFIDE”), funds are not
permitted to be used for general corporate working capital purposes. The
Company has so far been unsuccessful in its attempts to reach an
agreement with COFIDE pursuant to which the funds can be used for this
Due to the Company’s limited existing cash resources and the
possibility that it will not receive the proceeds of near term gold
sales, the Company expects that it may have difficulty meeting its
obligations as they fall due until appropriate control of the Peruvian
subsidiaries is re-established. In addition, the Company has limited
visibility as to the financial position of the Peruvian subsidiaries.
Consequently, the directors are considering the solvency of the Company
as a whole and a further announcement will be made in due course.
Pursuant to the announcement on 9 October 2015, the Company
will shortly be convening an Extraordinary General Meeting (EGM) as
requisitioned by a group of shareholders (the “Proposing Shareholders”).
The Proposing Shareholders are seeking to requisition an EGM to
consider special resolutions to appoint six new directors: Messers.
Leonard Harris, Julian R. lngham, Diego Benavides, Jorge L. Ramos, Frank
S. O’Kelly and Jesus A. Lema and to remove Messers. Robin Fryer,
Douglas Jones and Jaime A. Pinto as directors of the Company. If
successful, this would have the effect of removing all of the
independent non-executive directors and replacing them with six
appointees of the Proposing Shareholders. The circular convening the EGM
will include the reasons for which the Proposing Shareholders have
requisitioned an EGM as well as the directors’ robust responses to these
About Minera IRL Limited
Minera IRL Limited is an AIM, TSX and BVL listed precious
metals mining and exploration company with operations in Latin America.
Minera IRL is led by a management team with extensive operating
experience in South America. In Peru, the Company operates the
Corihuarmi Gold Mine and is advancing its flagship Ollachea Gold Project
towards production. For more information, please visit www.minera-irl.com.