Minera IRL says it’s very pleased with excellent third quarter

The September quarter provided an excellent result for Minera IRL (LON:MIRL), chief financial officer Tim Miller told investors today. 

Speaking on a conference call to investors this afternoon Miller explained that the Corihuarmi mine’s costs were ‘pretty consistent’ with the previous quarter, 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.

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. 

Interestingly the group is about to get stuck into a significant phase of work that will explore the gold deposit along strike from the known mineralization.

Through a 1.2 kilometre underground ‘drive’ Minera will be able to test a 1 kilometre eastern strike extension of the known mineralization that cannot be drilled effectively from surface.

The portal will be established before Christmas, Chamberlain said. And after that work will begin on the ‘drive’.

“That will allow us to access the orebody and by the end of 2012 but we will be able to begin exploration drilling from underground positions from about mid-year.”

He added: “Ollachea continues to look very promising. And we continue to work towards a production objective in late 2014.”

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.

Meanwhile Minera plans to continue its exploration work in Argentina.

“We’ll probably spend around $6 million this year. And we’ll ask the board to approve an $8 million exploration program there next year,” Chamberlain told investors today.

“So we’re a very optimistic and quite aggressive on the ground there.

He added: “In these ephithermal systems you need to have a decent commitment, and you need to drill a lot of holes.

“There are a lot of veins, not all of them necessarily carry gold and silver, but they are beauties when you find them.

“There is potential for bonanza grades and we are certainly in elephant country down there.”