South America focused gold producer Minera IRL Ltd (AIM: MIRL) said the recommended all-share offer for Hidefield Gold PLC (AIM: HIF) announced in October has now been completed and it has appointed Hidefield’s executive chairman Kenneth Judge as non-executive director.
Judge has a beneficial interest in 1,389,062 Minera IRL shares, representing 1.62 percent of the share capital.
The key assets acquired in the deal that valued Hidefield at approximately £7.23 million are the Don Nicolas project where approximately 360,000 ounces of gold has been defined and a large exploration holding of some 250,000 hectares containing a number of promising exploration prospects. These are located in the mining friendly state of Santa Cruz in Southern Argentina.
Minera IRL chairman Courtney Chamberlain said: “We believe there is excellent potential to extend the resource base at the Don Nicolas project and to advance this project rapidly toward development. To achieve this, and also explore for new discoveries within this emerging gold district, the Minera IRL board has approved a substantial budget of approximately US$5 million for 2010.
In November, the company reported solid progress on a number of fronts in its results statement for the third quarter and the first nine months to end-September 2009. Highlights included third quarter gold production of 7,850 ounces, bringing total production for the first nine months of 2009 to 22,753 ounces.
Minera benefited from high gold prices, chalking up third quarter sales revenues of US$7.8 million, and strong EBITDA of US$3.3 million thanks to a low cash operating cost of US$361 per ounce. Profit before tax in the third quarter came in at US$1.5 million, while cash balances at the end of the period were US$18.4 million.
Only days after the results were published, it confirmed that it would be pushing forward with infill drilling at the Ollachea gold project in southern Peru as it released a scoping study considering the viability of the project as an underground mining operation.
The scoping study was based on a N143-101 compliant inferred resource containing 1.3 million ounces of gold (8.9 million tonnes @ 4.5 grams per tonne gold (g/t)) and mining inventory of 8.2 million tonnes grading 4 g/t (1.1 million ounces). The resource estimate used a cut-off grade of 2.5g/t gold.