Minera IRL Team Outlines 8-Point Plan to Right-Foot Business

By Alex MacDonald

LONDON--South America precious metals miner Minera IRL Ltd.(MIRL.LN) outlined Wednesday an eight-point plan to right-foot the troubled business should a group of minority shareholders fail to get enough backing to revamp the board in an upcoming shareholder vote on Nov 24.

The Canada-based company has been mired in a tussle with its former interim chief executive, Diego Benavides, for control of its two Peruvian operating subsidiaries. The tussle prevented Minera from publishing its interim results and ultimately led to a suspension of its London shares in September. Minera, which is 19%-owned by Anglo Australian mining giant Rio Tinto PLC (RIO), has put in motion legal processes to oust Mr. Benavides from his position as manager of the two subsidiaries, but without success.

In turn, Mr. Benavides, alongside a group of minority shareholders, have requested an extraordinary shareholder meeting to revamp the board and put the firm back on track to grow its business. The shareholders claim that the new board would be better positioned than the current board to strengthen its corporate governance and secure a $240 million loan facility that the cash-strapped firm needs to develop its flagship Ollachea gold mine in southern Peru.

In its eight-point plan, the company rebutted by saying shareholders should vote against all upcoming resolutions. If the current management team wins, it will seek backing from Peru's courts to enforce its right to call for a shareholder meeting at the subsidiary level to regain control of its two operating units.

The parent company also said it would aim to fund the Ollachea project via a combination of debt and equity rather than over-burdening the balance sheet with a $240 million credit facility given the lower gold price environment. This was the same loan that management initially backed over the summer.

The parent company also said it would take a more realistic view than Mr. Benavides' team about the potential expansion of the Corihuarmi mine in Peru, which is nearing the end of its life. Furthermore, it would appoint a new CEO and chief financial officer, adopt corporate governance guidelines used by the World Bank and expand its board to include four to five members, some of whom could come from the candidate pool proposed by the opposing minority shareholders.

Finally the company would seek to publish its interim results and reinstate trading of its shares in London, Toronto and Lima.

-Write to Alex MacDonald at alex.macdonald@wsj.com

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(END) Dow Jones Newswires

November 18, 2015 05:17 ET (10:17 GMT)

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