Minera IRL (LON:MIRL, CVE:IRL) said its Don Nicolas gold-silver project in Argentina has reached another major milestone - as the permitting process has now begun.

The company told investors today that the environmental impact assessment (EIA) had now been completed and presented to the secretary of mining of the Santa Cruz province of Argentina, marking the start of the permitting process.

According to the company, permitting, which is expected to take six months, should proceed expeditiously given the “outstanding” support from the authorities in Santa Cruz.

"The completion of the EIA and commencement of permitting marks another significant milestone in the development of the Don Nicolas Project in Patagonia,” said executive chairman Courtney Chamberlain.

"The future Don Nicolas Mine promises to be an attractive investment with considerable upside potential in a number of areas.

"We remain confident that we will have our first gold pour from Don Nicolas in late 2013.”

Don Nicolas will be a 350,000 tonne per year open pit mining operation producing 52,400 ounces of gold and 56,000 ounces of silver each year. 

It will cost around US$55 million to build and operating costs are estimated at US$528 an ounce, giving a margin of more than US$1,000 an ounce at current gold prices.

The mine is currently estimated to have a relatively short 3.6 year mine life but the company expects future exploration to extend this significantly.

Broker finncap said the announcement demonstrated the firm's commitment to the development of the Don Nicolas project, despite the current negative sentiment towards Argentina. 

"This negative sentiment has been primarily caused by the expropriation of the majority of Repsol’s holding in YPF, the local oil company. 

"Minera IRL’s take on this is that it was a specific one-off and should not be taken as applying to the extractive industries as a whole," analyst Martin Potts said in a note.

The company told investors today that the environmental impact assessment (EIA) has now been completed and presented to the secretary of mining of the Santa Cruz province of Argentina, marking the start of the permitting process.

According to the company, permitting, which is expected to take six months, should proceed expeditiously given the “outstanding” support from the authorities in Santa Cruz.

“The completion of the EIA and commencement of permitting marks another significant milestone in the development of the Don Nicolas Project in Patagonia,” said executive chairman of Minera Courtney Chamberlain.

“The future Don Nicolas Mine promises to be an attractive investment with considerable upside potential in a number of areas.

“We remain confident that we will have our first gold pour from Don Nicolas in late 2013.”

Don Nicolas will be a 350,000 tonne per year open pit mining operation producing 52,400 ounces of gold and 56,000 ounces of silver each year. 

It will cost around US$55 million to build and operating costs are estimated at US$528 an ounce, giving a margin of more than US$1,000 an ounce at current gold prices.

The mine is currently estimated to have a relatively short 3.6 year mine life but the company expects future exploration to extend this significantly.

Broker FoxDavies has maintained its 'buy' rating on Minera IRL (LON:MIRL, TSE:IRL) saying the firm made a "solid" start to 2012.

Last Thursday, the company said its Q1 results had topped expectations as its producing Corihuarmi gold mine in Peru performed strongly.

Profit after tax jumped 35 per cent to US$1.7 million in the first three months compared to 2011 while revenues improved 1.3 per cent to US$11.1 million. 

Output from the company’s Corihuarmi mine was ahead of expectations at 6,747 ounces compared with 7,592 ounces in the first quarter of 2011. 

FoxDavies analyst Peter Rose said in a note: "Another solid quarter from Minera IRL. Gold production was slightly ahead of our expectations despite lower grades and higher strip ratios.  Revenues were also slightly up on our expectations mainly due to the high gold price (US$1699) achieved in the quarter."

"We are expecting the grades at Corihuarmi to fall in the next three quarters which is likely to increase operating costs, however at just over US$500 cash costs per ounce, this still places Minera IRL at the lower end of producers in terms of costs.

"Minera IRL is now fully cashed up after the raising of C$33.1 mln in a fundraising in March, which will allow the company to complete the necessary studies for feasibility at Don Nicolas and Ollachea."

The broker decreased its target price for the stock to 130 pence a share - from 133 pence previously.

The first round of drilling has now come to an end at the Chapi Chapi project, an exploration venture between Mineral IRL (LON:MIRL, TSE:MIRL) and Alturas Minerals (CVE:ALT) in southern Peru.

Alturas is currently earning an 80 per cent stake in the project. And the Canadian firm today said that almost 5,500 metres of drilling had now been completed.

It says that ‘strong metal values’ encountered through the programme has highlighted a need for follow up drilling.

Alturas told investors that the drill results from Chapi Chapi so far have confirmed a large copper-gold-molybdenum system. And follow up drilling will help define possible extensions as well as test other drill targets in the area.

It said that grades range from 0.57 to 1.31 per cent copper equivalent in one area, while in another the grades were between 0.52 and 0.95 per cent copper. Other areas of mineralsation were also encountered.

"Alturas has outlined a large, potentially economic, copper-gold-molybdenum mineralized system: a second phase drilling program of 10,000 meters is planned for the second half of 2012 and it will start as soon as the environmental permit is obtained,” said Alturas chief executive Miguel Cardozo.

“The second phase program will aim to more precisely define the extent and quality of the widespread copper-gold-molybdenum mineralization."

Under the agreement between the companies Minera IRL’s Chapi Chapi project is being combined with Alturas adjoining Utupara property, to form the Huaquirca venture. And Alturas will earn an 80 per cent stake in the venture once it has completed 15,000 metres of additional drilling as well as a scoping study.

Minera IRL will then retain a 20 per cent stake in the Huaquirca venture.

Earlier today, in London, Minera IRL released its first quarter results which were boosted by strong production and sales figures from the Corihuarmi gold mine in Peru, in the central Andes.

Profits after tax jumped 35 percent to US$1.7 million in the first three months of the year from the same period of 2011 as revenues improved 1.3 percent to US$11.1 million. Pre-tax profit came in at US$3.1 million, up from US$2.5 million.

Gold sales declined 22 percent from a year earlier to 6,515 ounces, but this was offset by a 22 percent increase in average realised sales prices to US$1,699 per ounce.

Minera added that its cash balance was strong at the end of the period with US$30.3 million in the bank following a C$33.1 million share placing.

Output from the company’s Corihuarmi mine was ahead of expectations at 6,747 ounces compared with 7,592 ounces in the first quarter of 2011. Operating costs increased to US$502 per ounce from US$401 last year.

Minera IRL (LON:MIRL, TSE:IRL) said its first quarter financial results topped expectations as its producing Corihuarmi gold mine in Peru performed strongly.

Profits after tax jumped 35 percent to US$1.7 million in the first three months of the year from the same period of 2011 as revenues improved 1.3 percent to US$11.1 million. Pre-tax profit came in at US$3.1 million, up from US$2.5 million.

Gold sales declined 22 percent from a year earlier to 6,515 ounces, but this was offset by a 22 percent increase in average realised sales prices to US$1,699 per ounce.

Minera added that its cash balance was strong at the end of the period with US$30.3 million in the bank following a C$33.1 million share placing.

Output from the company’s Corihuarmi mine was ahead of expectations at 6,747 ounces compared with 7,592 ounces in the first quarter of 2011. Operating costs increased to US$502 per ounce from US$401 last year.

The company told investors that grades at Corihuarmi will continue to decline as it approaches the end of its life in 2015/16, which will result in further reductions in production.

"However, due to a focus on controlling site operating costs and maximizing throughput, the mine continues to perform well and is generating strong cash flows,” said chairman of Minera Courtney Chamberlain.

Other operational highlights of the period included the completion of a positive feasibility study on the Don Nicolas project in Patagonia, which was estimated to have a net present value of US$40 million based on a gold price of US$1,250 per ounce.

Permitting for Don Nicolas is about to start.

At the Ollachea project, the ongoing feasibility study is on track to be completed in the second half of the year.

“The financial results for the March 2012 quarter exceeded management's expectations on the back of a solid performance from our Corihuarmi Gold Mine in Peru,” said Chamberlain.

“Minera IRL is committed to bringing Don Nicolas into production by late 2013, as well as advancing the exploration campaign in Patagonia, yet we will continue to carefully monitor the investment environment in Argentina in the best interests of all of its stakeholders.”

The bulk of the options were exercised at 45 pence, with 500,000 at 64 pence raising about £1.1 million for the miner with operations in Peru and Argentina. Most of the shares acquired under the options were subsequently sold.

The cash will add to an already strong funding position at Minera. At the end of 2011, the company had about £7 million in cash which it subsequently boosted with a placing to raise a further £19 million.

The money will be used to develop its Ollachea project in Peru and exploration, permitting and detailed engineering at the Don Nicolas mine in Argentina and the wider exploration of its acreage in Patagonia.

Minera also has the producing Corihuarmi gold mine in Peru. In 2011, Minera sold 33,718 ounces at an average price of US$1,570/oz, while pre-tax profit soared to US$16.1 million from US$6.5 million.

South American gold miner Minera IRL (LON:MIRL, CVE:IRL) today revealed plans to raise up to £19 million, or C$30 million, through a share placing.

The company said the new money would be used to advance the Ollachea and Don Nicholas projects. The cash will also help fund exploration work across the rest of the portfolio, it added.

The funding will be completed via a syndicate of investment dealers led by RBC Capital Markets. Collins Stewart and FinnCap are handling the placing in the UK.

Last week Minera IRL completed the feasibility study for the Don Nicholas project in Argentina and revealed what it called ‘excellent’ drill results from the Ollachea project in Peru.

The two mine development projects are expected to bring production online in 2013 and 2014 respectively.

Don Nicholas will be a 350,000 tonne per year open pit mining operation producing 52,400 ounces of gold and 56,000 ounces of silver each year. 

It will cost around US$55 million to build and operating costs are estimated at US$528 an ounce, giving a margin of more than US$1,000 an ounce at current gold prices.

The mine is currently estimated to have a relatively short 3.6 year mine life but the company expects future exploration to extend this significantly.

Meanwhile a pre-feasibility study was completed last year at Ollachea and mining is scheduled to start in around two years time.

Last week Minera IRL passed another important milestone at the project as work began on a 1.2 kilometre tunnel. This will provide access to explore the highly prospective strike to the east of the main deposit, which thus far has only been drilled from surface.

It will also allow access to the Minapampa orebody, providing valuable practical mining experience ahead of production, which is scheduled for 2014.

Progress is continuing towards a bankable feasibility study on Ollachea, which will be then used as the basis for raising project finance. 

To that end, project managers AMEC and Coffey Mining revisited the site last month.

Separately, Minera unveiled the latest results from its infill drilling campaign on the project, which unearthed “excellent gold intersections” and reinforced the “continuity of Minapampa”. The best intersections included 20 metres at 10.2 grams per tonne and 31 metres at 5.58 grams.

City stockbroker Fox-Davies Capital today repeated a ‘buy’ recommendation on Minera IRL (LON:MIRL) following yesterday’s strong third quarter results.

Fox-Davies has a 126p price target for Minera, some 80 per cent higher than the current price of 69p.

On Monday Minera’s chief financial officer Tim Miller told investors that costs were ‘pretty consistent’ with the previous quarter at the Corihuarmi gold mine, while production and sales had improved.

Gold production in the three months to September 30 2011 rose to 9,718 ounces. This represents an 11 percent improvement from the 8,748 ounces it produced in the same period in 2010.

Gold sales rose 7.6 percent year-on-year to 9,740 ounce. And at US$1,683 an ounce the average realised gold sales price was 36.1 percent higher than in the previous third quarter. Sales revenue was up 47 percent to US$16.4 million.

“We are very pleased with the results,” said chief executive Courtney Chamberlain. “They are above our expectations.

“The results were buoyed by production at Corihuarmi which was well above our expectations. This was mainly down to higher grades and increased throughput.”

Gold production began at Corihuarmi in 2008, and the mine is running at an annualised plus 30,000 ounces a year.

In a note to clients today Fox-Davies analyst Peter Rose said that Minera processed more tonnage than the broker had expected and as a result production was higher than forecast.

Rose also said that the mine’s costs have fallen in every quarter of this year. However the analyst reckons this streak may be broken in the current quarter as the mine is expected to process lower grade ore.

While relatively modest in size compared to South America’s larger mines, Corihuarmi is the cash machine that drives Minera IRL’s more substantial ambitions.

The firm has two mine development projects that are currently being advanced through the feasibility stages. 

In Peru full feasibility work is currently underway at the Ollachea project, following a successful pre-feasibility study earlier this year. 

Meanwhile Don Nicholas is the other key development project.  It is located in the Santa Cruz region of Patagonia, Argentina. This area is fast becoming an exploration hot spot with several significant mines currently being built.

The Argentine project is more advanced than Ollachea. Here Minera hopes to have the feasibility study completed by the end of this year. The mine is expected to be commissioned in 2013.

The fund management firm has acquired around 960,000 additional shares in the company. It now owns just over 13 million Minera IRL shares. This equates to 11 per cent of the group’s issued share capital.

Minera IRL owns the Corihuarmi mine in Peru, where gold production began in 2008 and is running at an annualised 30,000 ounces a year.

Analysts expect this to rise to 150,000 ounces with the commissioning of two further mines in 2013 and 2014. 

Meanwhile the group is working on the feasibility study on the Don Nicolas project in Patagonia and it is continuing exploration at the Ollachea project in Peru. 

In September the company announced a significant resource upgrade at its Don Nicolas project in the Santa Cruz region of Argentina.

The measured and indicated resource in the combined ‘high and low grade’ category is now 381,000 ounces of gold, which represents an 89 per cent increase in these categories compared to a previous resource estimate made by Hidefield Gold in 2009.

Minera IRL (LON:MIRL, CVE:IRL) has approved plans to develop a 1.2 kilometre exploration tunnel at the Ollachea gold project in Peru, to access an ore body that was defined in last month’s pre-feasibility study.

From this 1.2 kilometre ‘drive’ Minera will be able to carry out underground exploration drilling so that it can test a 1 kilometre eastern strike extension of the known mineralization that cannot be drilled effectively from surface.

According to Minera these underground exploration drill targets are ‘compelling’. 

"Completion of the extremely positive Pre-feasibility Study at Ollachea provides the justification to commence the exploration drive into the ore body." said chairman Courtney Chamberlain.

"This will allow drill testing from underground drill cuddies as the drive advances parallel to approximately one kilometer of eastward projected gold mineralization which, due to very steep terrain, is impractical to drill from surface.  

“Detailed mining design information will also be gained that will be used in the Bankable Feasibility Study which is now commencing.  This tunnel will also assist management's production schedule objective of late 2014."

The project has already been permitted by the Peruvian authorities and Minera has hired a Peruvian contractor. So work can get start almost immediately. It will take 15 months to complete the ‘drive’ and it has a budgeted cost of US$14.9 million (including a 10 per cent contingency).

The ‘drive’ will be dug out from a portal site, in a deeper valley across the ridge from the outcropping mineralization at the Minapampa Zone.  The ‘drive’ is important because of the extremely steep terrain in the east of the project, which prevents drilling from surface.

Minera explained that the tunnel track has been designed to run parallel to the eastern strike extension and it includes suitable locations for underground diamond drilling from ‘cuddies’ or chambers positioned at regular intervals. 

Minera IRL (LON:MIRL, CVE:IRL) has kicked off a 4,000 metre exploration drilling programme at the Michelle project in Patagonia, Argentina.

The company has already carried out surface sampling at the project, which is located to the north of AngloGold Ashanti’s world class Cerro Vanguardia gold and silver mine.

Speaking about the Michelle project, chairman Courtney Chamberlain said: "This is a very prospective drill target into outcropping epithermal veins located only a few kilometres along strike from the world class Cerro Vanguardia vein field." 

"Our Patagonia exploration team has done an excellent job of assessing and prioritizing our initial drill targets.  

"We are particularly encouraged following receipt of significantly elevated gold and silver values from surface sampling" across the prospective structures." 

In this morning’s statement Minera also revealed assay results from the sampling that has already been carried out on Michelle.

Thirty-three out of the fifty-one surface rock samples returned values above 1 grams per tonne gold.  Of these, sixteen samples had more than 5 grams per tonnes gold and the highest was 15.7 grams per tonne.  

Eleven assays were above 30 grams per tonne silver and one of those had 1,460 grams per tonne silver. 

So far the exploration team has identified around 22 kilometres of cumulative vein strike length within the 143 square kilometre project area.  The company said that many veins can be traced at surface from Cerro Vanguardia. The world class mine’s nearest open pit is only 6.5 kilometres from Michelle.  

Michelle is one of three active green-field exploration projects that Minera IRL is currently working on within its 2,700 square kilometre land package in Patagonia’s Deseado Massif region.  

Broker finncap weclomed the announcement, eyeing in particular the company's plans to to test a series of outcropping quartz veins similar to those that are being mined by Anglogold Ashanti`s Cerro Vanguardia mine, which is situated within the adjacent licence.

This morning the group revealed the findings of the key prefeasibility report, which was prepared by international engineering firm AMEC (LON:AMEC) and Coffey Mining. 

The study put the project’s value between £170 million and £271 million (pre-tax).

"We are delighted with the results of the Prefeasibility Study which gives strong credence to a substantial, economically robust, long-life gold project at Ollachea." said chairman Courtney Chamberlain.  

He added: “We are now embarking upon a Bankable Feasibility Study and final consideration is underway to commence an exploration drive into the orebody."

Minera is now getting started on the bankable feasibility study (BFS) which has is being pencilled in for completion in the third quarter of 2012. As part of that it expects to publish a maiden Inferred Resource estimate for another part of Olleachea, the Concurayoc Zone, later in the third quarter 2011.

The prefeasibility study is based on the projects NI43-101 indicated resource which has 1.4 million ounces of contained gold, from 10.6 million tonnes grading 4 grams per tonne gold. From this resource AMEC came up with a mine design that had a probable mineral reserve with 1.1 million ounces of gold.

The study, which assumed a US$1,100 an ounce gold price, estimated Ollachea’s pre-tax net present value (NPV) between US$170 million and US$271 million, and put post-tax NPV between US$91 million and US$167 million.

The study estimated the internal rate of return (IRR) at 28.1 per cent (pre-tax) and 20.5 per cent (post tax).

AMEC estimates an up-front capital cost of US$170 million, and life-of-mine cash operating costs of US$436 an ounce.

Minera confirmed that the underground mine will be accessed by a 1.3 kilometres tunnel. It also confirmed AMEC’s findings which showed that conventional metallurgical processing could extract 91 percent of the mine’s gold.

Over the initial nine year mine life Minera said that 1.1 million tonnes of ore will be mined and treated each year, to produce 117,000 ounces of gold.

Importantly Minera point out that there is still much to be done in terms of exploration and Ollachea’s scope goes beyond that of the prefeasibility study. The group now plans to step-up exploration on the project.

"We believe that this Orogenic type system, still open ended along strike in both directions and down dip after more than 2 1/2 years of continuous drilling, offers outstanding exploration potential to extend the mine life,” Chamberlain said.