www.minera-irl.com
Minera IRL Limited together with its subsidiaries (the "Group") is a Latin American precious metals mining, development and exploration company. Managed by a team of experienced mining executives, the Group's business was privately funded from inception in 2000 until listing on the London AIM Market in April 2007. Minera IRL Limited is currently quoted on the Toronto Stock Exchange (TSX:IRL), AIM London (AIM:MIRL) and the BVL, Lima, Peru (BVL:MIRL) stock exchanges.
The Group operates the Corihuarmi Gold Mine, is exploring the Ollachea Project, both of which are in Peru, and is also undertaking a feasibility study at the Don Nicolas gold project in Patagonia, Argentina.
Minera IRL’s shares bounce after large resource upgrade at gold project in Argentina
Shares in Latin America-focused precious metals miner Minera IRL (LON:MIRL,TSE:IRL) continued to bounce this morning after the firm announced a significant resource upgrade at its Don Nicolas project in Santa Cruz, Argentina.
By 10:23am, Minera’s shares had improved 8.5 per cent to 83 pence. They had been as low as 72 pence each during the market volatility of recent days.
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.
An additional 149,000 ounces is contained in the ‘inferred resource’ category (with the lower cut-off grade at 0.3 grams per tonne).
In the ‘high grade’ category alone, the measured and indicated resource is 1,461,000 tonnes grading at six grams per tonne of gold and 13.4 grams per tonne of silver, for 280,000 ounces of gold and 630,000 ounces of silver. High grade represents 74 per cent of the total measured and indicated resource. Minera said that this is the basis for the Don Nicolas feasibility study that is due for completion later this year.
In the ‘low grade’ (below 1.6 grams per tonne) category, the measured and indicated resource is an additional 4.2 million tonnes grading at 0.8 grams per tonne of gold and 3.9 grams per tonne of silver for 102,000 ounces and 516,000 ounces respectively. This forms the basis for potential future low grade treatment, such as heap leaching.
“We are extremely pleased with the results of our first resource estimate on the Don Nicolas Project since we acquired Hidefield in late 2009,” said Courtney Chamberlain, Minera’s executive chairman. “This is the culmination of a major programme of infill and extension drilling of almost 23,000 metres over the past year and a half. The plus 1.6 grams per tonne gold high grade resource is of particular importance.”
Chamberlain added that the epithermal veins that make up the resource have only been drilled to a fairly shallow depth and most of the mineralisation can be mined by open pit methods. “Most of the precious metal veins remain open and untested down-dip and thus offer excellent future upside potential,” he said. “We have also identified a number of new outcropping veins very close to the defined resources that will form the basis for ongoing brownfields exploration.”
Two vein field districts make up Don Nicolas – La Paloma and Martinetas – and the reported resource is made up of nine vein systems. At Paloma, resources have been defined at the Sulfuro, Arco Iris, Ramal Sulfuro and Rocio veins, while Martinetas consists of five vein swarms contained in the Coyote, Cerro Oro, Armadillo, Lucia and Calafate deposits, said the firm.
Minera said that this latest resource estimate supersedes the resource inventory that was inherited when Minera bought Hidefield in late 2009, although it pointed out that that estimate was based on a lower cut-off grade of one gram per tonne of gold so the two estimates are not directly comparable.
On this lack of direct comparison, broker Shore Capital commented: “On the face of it, today’s upgrade appears to be a significant increase... over that declared by [the] previous owner. However, Minera is using a 0.3 grams per tonne cut-off, versus Hidefield’s one gram per tonne.”
But Shore also made the point that, although “it would have been nice if Minera could have provided a one gram per tonne cut-off comparison”, this is mitigated by the firm’s claim that only a relatively-small portion of the 89 per cent increase was related to reducing the cut-off. “Given the relatively small scale of this project, we do not expect today’s news to have significant impact on the company’s fortunes,” the broker added. “However, there is potential to expand this resource as the veins remain open down-dip, plus new outcropping veins have been discovered close by.”
Recently, Minera announced that gold production across its business for the quarter to the end of June was ahead of budget. On Monday, the firm said it produced 8,775 ounces of gold during Q2 2011, which was 8.4 per cent greater than that produced during Q2 2010.
House broker FinnCap expects sales of US$40.2 million from Minera in 2011, along with an adjusted pre-tax profit of US$11 million (which translates to earnings per share of 5.2 cents). Last year, the firm generated sales of US$41.1 million along with a pre-tax profit of US$9.4 million.
