Minera IRL Reports Positive Ollachea Project Optimization Results
2014年6月4日 - 3:00PM
Marketwired Canada
Minera IRL Limited ("Minera IRL" or the "Company")
(AIM:MIRL)(BVLAC:MIRL)(TSX:IRL), the Latin America gold mining company, is
pleased to announce the results of post-Definitive Feasibility Study ("DFS")
mine optimization studies that have been completed by external consultants in
anticipation of the development of the Company's flagship Ollachea Gold Project
in Peru.
HIGHLIGHTS
-- Total gold production increased to 930,000 ounces (from 921,000 ounces)
-- Average annual production of 100,000 ounces over the first two years (up
from 70,500 ounces)
-- Average annual production unchanged at 100,000 ounces per year over an
initial nine year mine life
-- Initial capital cost of $164.7 million (down from $177.5 million)
-- Average total cash cost of $587 per ounce (slight adjustment from $583
per ounce)
-- An after-tax NPV, at a 7% discount rate and gold price of $1,300 per
ounce, of $181 million (up 17% from $155 million)
-- IRR of 28.2% (up from 22.1%)
-- Pay-back period decreased to 3.1 years (from 3.7 years)
-- Production now expected to commence in Q2 2016 (from Q1 2016)
Commenting on the updated projections, Courtney Chamberlain, Minera IRL
Limited's Executive Chairman, stated: "The impact of the better defined
geological model at Ollachea has exceeded our expectations. The resulting
optimized underground mine design and production schedule carried out by
international consultancy, Mining Plus, has allowed us to bring forward
considerable gold production. This, along with $9.5 million of deferred capital,
has enhanced the project's financial projections as listed in the above
Highlights. The Company is confident it will soon receive the Construction
Permit and continues its focus on the debt restructuring and project financing."
Ollachea Mine Production Summary
The Life-of-Mine ("LOM") results of the updated Ollachea mine plan prepared by
Mining Plus Pty Ltd ("Mining Plus") do not differ materially from the results
presented in the 2012 Ollachea DFS prepared by AMEC dated 29 November 2012.
However, there were several areas that have benefited from this optimization
process.
The updated LOM production schedule has resulted in an optimized ramp-up of
initial production with average annual gold production increasing to 100,000
ounces over the first two years of production (from 70,500 ounces in the
Ollachea DFS). The average annual production is approximately 100,000 ounces per
year over the nine years of mine life, almost identical to the Ollachea DFS,
which is summarized in Table 2 at the end of this release.
Cost Estimates
The updated mine plan provided opportunities to reduce or defer certain
pre-production development capital items. As a result, initial capital
expenditure has been reduced by $12.8 million to $164.7 million (from $177.5
million in the 2012 Ollachea DFS).
Deferral of some underground development work has pushed out $9.5 million of
pre-production capital expenditure into LOM sustaining capital. The net effect
is that total LOM capital has reduced slightly to $220.0 million from the $223.3
million estimated in the DFS.
Project costs are still based upon Q3 2012 capital cost estimates. However, the
Company believes that potential cost reductions for equipment and services
driven by the depressed mining development industry is likely to offset
potential cost increases. Additionally, discussions with equipment suppliers
have confirmed certain opportunities to lease finance a substantial portion of
the mining equipment.
There has been little effect upon the LOM cash operating cost projections.
Capital and operating cost comparisons are summarized in Tables 3 and 4 near the
end of this press release.
Financial Analysis
Following the mine plan update process, the financial model for Ollachea has
been updated to reflect these changes and to account for other changes to the
mine's economics. Table 1 illustrates the effects of the optimization process
upon key economic indicators compared to the DFS. A base case gold price of
$1,300 per ounce was used in both cases.
Table 1 - Updated financial analysis, Ollachea Project
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Parameter Units Financial Results
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2014 Update 2012 DFS
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Pre-tax Post-tax Pre-tax Post-tax
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Project cash flow $M 492 344 489 325
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NPV at 5% real $M 326 218 316 194
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NPV at 7% real $M 277 181 264 155
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NPV at 10% real $M 217 135 199 108
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IRR (real) % 37.1 28.2 29.2 22.1
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Payback years 2.4 3.1 3.2 3.7
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Notes:
1. NPVs as at commencement of construction
2. NPVs are based on mid-period discounting
3. Before tax is before Special Mining Tax, Workers' Participation Profit of
8% and Income Taxes of 30%
4. Payback starts from the commencement of production
5. The financial results are on 100% Project basis and exclude the agreement
with the community for a 5% participation in Minera Kuri Kullu SA ("MKK") on
commencement of production and the $14.2 million remainder of the Second
Additional Payment payable by MKK due to Rio Tinto in June 2016.
6. Excludes the 1% gross smelter royalty granted to Macquarie Bank.
7. Tax losses and capitalized expenditures available to offset taxes payable
include balances as of 31 December 2013 in the 2014 Update (31 December 2012
estimates in the 2012 DFS).
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The update was undertaken in constant US dollars, 100% Project ownership and
100% equity finance basis.
A comparison of the updated financial results to the Ollachea DFS utilizing a
range of gold prices is presented in Table 5 near the end of this press release.
Updated Mineral Resource and Reserve Estimate
The updated LOM mine plan is based upon a refined geological interpretation and
an updated mineral resource estimate for the Minapampa Zone of the Ollachea
deposit. There has been no additional resource drilling at Minapampa since the
2012 DFS. The refined geological model and accompanying enhanced structural
model allows for a more robust definition to the limits of the economically
mineralized horizons. The updated mineral resource estimate, carried out by
consultants GHD Group Pty Ltd ("GHD") is based upon a significantly smaller
panel size, more constrained search ellipsoids and a 2.0 grams of gold per tonne
("g/t Au") cut-off (consistent with the DFS) as shown in Table 6 near the end of
this release.
The mineral reserve estimate in the 2014 calculation also benefited from the
refined geological model and optimization for the Minapampa Zone. The lower
cut-off grade was increased marginally to 2.1g/t Au (from 2.0g/t Au in the DFS).
The overall result is an increase in contained gold to 1,001,000 ounces (from
983,000 ounces), which is expanded upon in Table 7 near the end of this press
release.
There remains considerable upside at Ollachea which, with more work, could lead
to an expanded mineral reserve and increased mine life. As previously reported,
the nearby Concurayoc Zone, to the west of Minapampa, contains an inferred
resource of 0.9 million ounces (10.4 million tonnes grading 2.8g/t Au) and,
additionally, positive results were obtained from the 2013 underground
exploration drilling along the eastern strike extent of Minapampa. Finally, the
Ollachea mineralized zone remains open ended and undrilled along strike and at
depth.
Project Schedule and Moving Forward
In discussing the results of the optimization, Courtney Chamberlain stated: "The
optimization process has exceeded our expectations, and demonstrates the
opportunity for a rapid recommencement of mine development once the Construction
Permit and financing is in place. The Company also continues to prepare the
project for development by evaluating engineering candidates to execute the EPCM
contract."
In discussing the current schedule, Mr. Chamberlain stated: "Based on the
optimization just completed, and assuming that financing is in place and project
development can commence in the third quarter of 2014, the latest schedule
indicates that construction should be completed within 21 months, or the first
quarter of 2016 (from late 2015), with a ramp up to full production in the
second quarter of 2016 (from the first quarter of 2016)."
Minera IRL Limited is a AIM, TSX and BVL listed precious metals mining,
development and exploration company with operations in Latin America. Minera IRL
is led by a management team with extensive operating experience in South
America. In Peru, the Company operates the Corihuarmi Gold Mine and the advanced
Ollachea Gold Project. The Company also has a 51% interest in the Don Nicolas
joint venture in Argentina with CIMINAS. For more information, please visit
www.minera-irl.com.
Qualified Persons
The preparation of the technical information contained herein was supervised by
Courtney Chamberlain, Executive Chairman, BSc and MSc Metallurgical Engineering,
a Fellow of the Australian Institute of Mining and Metallurgy (FAusIMM), who is
recognized as a Qualified Person for the purposes of National Instrument 43-101,
and who has reviewed and approved the technical information in this press
release.
The preparation of geological and resource information contained herein was
supervised by Donald McIver, VP Exploration of the Company, MSc Exploration and
Economic Geology, a Fellow of the Australian Institute of Mining and Metallurgy
(FAusIMM), as well as the Society of Economic Geologists (FSEG), who is
recognized as a Qualified Person for the purposes of National Instrument 43-101,
and who has reviewed and approved the resource information in this press
release.
The preparation of the Indicated Mineral Resources contained herein was
estimated by Doug Corley, Member of the Australasian Institute of Geoscientists
(MAIG), and Registered Professional Geoscientist (RP Geo), of GHD Group Pty Ltd,
who is recognized as a Qualified Person for the purposes of National Instrument
43-101, and who has reviewed and approved the resource information in this press
release.
The preparation of the Probable Mineral Reserve contained herein was supervised
by Neil Schunke, Member of the Australasian Institute of Mining and Metallurgy
(AusIMM), of Mining Plus Canada Pty Ltd, who is recognized as a Qualified Person
for the purposes of National Instrument 43-101, and who has reviewed and
approved the technical information in this press release.
Non-IFRS Measures
"Site operating cash costs" and "total cash costs" are non-IFRS measures that do
not have a standardized meaning prescribed by GAAP or IFRS and may not be
comparable to other similarly titled measures of other gold mining companies.
"Site operating cash costs" include costs such as mining, processing and
administration, but are exclusive of royalties, workers' profit participation
cost, depreciation, amortization, reclamation, capital, development, exploration
and other non-site costs (transport and refining of metals, and community and
environmental). These costs are then divided by ounces produced to arrive at
"site operating cash costs per ounce".
"Total cash costs" includes "site operating cash costs" and reflects the cash
operating costs allocated from in-process and dore inventory associated with
ounce of gold in the period, plus applicable royalties, workers' profit
participation cost, and other non-site costs (transport and refining of metals,
and community and environmental). These costs are then divided by the ounces
sold to arrive at "total cash costs per ounce sold".
Both of these measures may vary from one period to another due to operating
efficiencies, waste-to-ore ratios, grade of ore processed and gold recovery
rates in the period. "Total cash costs" is also influenced by the realized gold
price in the period.
Management believes this information is useful to investors because this measure
is considered to be a key indicator of a company's ability to generate operating
earnings and cash flow from its mining operations. This data is furnished to
provide additional information and is a non-GAAP and non-IFRS measure that does
not have any standardized meaning prescribed by GAAP or IFRS. It should not be
considered in isolation as a substitute for measures of performance prepared in
accordance with IFRS, and is not necessarily indicative of operating costs
presented under IFRS.
Table 2 - Ollachea Annual Gold Production Summary Comparison
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Year 2014 Update 2012 DFS Change
Au (k oz) Au (k oz) Au (k oz)
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Year 1 (2016) 97 63 34
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Year 2 (2017) 106 78 28
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Year 3 (2018) 101 112 (11)
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Year 4 (2019) 102 119 (17)
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Year 5 (2020) 106 118 (12)
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Year 6 (2021) 105 126 (21)
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Year 7 (2022) 101 117 (16)
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Year 8 (2023) 105 94 11
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Year 9 (2024) 79 76 3
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Year 10 (2025) 28 18 10
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Total 930 921 9
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Table 3 - Ollachea Project Capital Cost Comparisons
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2014 Update 2012 DFS Change
Item $M $M $M
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Project Capital
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Mining 43.7 55.4 (11.7)
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Site Development 3.9 3.9 -
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Process Plant 58.4 58.4 -
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Ancillary Buildings 3.9 3.9 -
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Tailings System 5.7 5.7 -
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Indirect and Owners Cost 31.4 31.4 -
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Contingency 17.7 18.8 (1.1)
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Total Project Capital 164.7 177.5 (12.8)
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Sustaining Capital 51.1 41.6 9.5
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Closure Costs (net) - End of LOM 4.2 4.2 -
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Total LOM Capital Cost 220.0 223.3 (3.3)
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Note:
1. Costs are in 3Q 2012 $.
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Table 4 - Ollachea LOM average unit cash operating costs
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2014 Update 2012 DFS
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Item $/t ore $/oz $/t ore $/oz
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Mining 23.5 243 23.4 237
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Processing 21.5 222 21.5 218
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G&A 4.3 44 4.3 44
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Site Operating Cash Costs 49.3 509 49.2 499
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Transport & Refinery 4 4
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Workers' profit participation 33 36
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Special Mining Tax 13 15
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Royalties 28 29
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Total Cash Costs 587 583
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Note:
1. Costs are in 3Q 2012 $.
2. Operating cash costs exclude costs for freight and refining dore, and
royalties.
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Table 5 - Key financial indicators using a range of gold prices
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$1,100 $1,200 $1,300 $1,400 $1,500
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Discount 0% ($M) 231 289 344 399 453
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Discount 5% ($M) 135 177 218 259 299
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Discount 7% ($M) 107 144 181 217 253
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Discount 10% ($M) 72 104 135 166 197
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IRR (post-tax) 20.3% 24.4% 28.2% 31.9% 35.4%
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Payback (years) 4.0 3.4 3.1 2.7 2.4
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Table 6 - Minapampa Resource Estimates Comparison
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Indicated Mineral Resource Inferred Mineral Resource
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Version Tonnes x m Au, gm/t Au, oz x m Tonnes x m Au, gm/t Au, oz x m
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2014 10.1 4.0 1.3 1.7 4.0 0.2
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2012 10.6 4.0 1.4 3.3 3.3 0.3
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Table 7 - Ollachea Mineral Reserve Estimates Comparisons
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Probable Mineral Reserves
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Bottom cut
Version g/t Au Tonnes x m Au, gm/t Au, oz x 000
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2014 2.1 9.2 3.4 1,001
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2012 2.0 8.7 3.5 983
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FOR FURTHER INFORMATION PLEASE CONTACT:
Minera IRL Limited
Jeremy Link
Business Development
+1 (416) 907 7363
www.minera-irl.com
Canaccord Genuity Limited
(Nominated Adviser & Broker, London)
Neil Elliot
+ 44 (0)20 7523 8000
Canaccord Genuity Limited
(Nominated Adviser & Broker, London)
Emma Gabriel
+ 44 (0)20 7523 8000
finnCap
(Co-broker, London)
Geoff Nash (Corporate Finance)
+ 44 (0)20 7600 1658
finnCap
(Co-broker, London)
Matthew Robinson (Corporate Finance)
+ 44 (0)20 7600 1658
finnCap
(Co-broker, London)
Elizabeth Johnson (Corporate Broking)
+ 44 (0)20 7600 1658
Buchanan
(Financial PR, London)
Bobby Morse
+44 (0)20 7466 5000
Buchanan
(Financial PR, London)
Gordon Poole
+44 (0)20 7466 5000
Buchanan
(Financial PR, London)
Louise Mason
+44 (0)20 7466 5000
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