Minera IRL opts for US$20m facility from Macquarie to fund gold projects development

Latin America focused precious metal miner Minera IRL (LON, BVL:MIRL, TSX:IRL) has cancelled its proposed share offering due to the recent volatility in the equity markets, opting for another method of financing, by agreeing to a US$20 million finance facility with investment banking group Macquarie (ASX:MQG) to fund principally the ongoing development at its Ollachea and Don Nicolas gold projects.
The facility comprises two tranches of US$10 million.  The first tranche is committed by Macquarie, with the second tranche being subject to further due diligence and approvals prior to any drawdown of the second tranche. The company's existing US$5 million Feasibility Finance Facility with Macquarie, of which US$2.5 million is currently drawn down, is being refinanced as part of this facility.
Minera IRL said that the decision to provide it with the facility highlighted Macquarie’s positive view on the potential of Ollachea and Don Nicolas, located in southern Peru and Argentina, respectively.
“We appreciate Macquarie's continued support of the company...the facility, along with the cash flow from the company's Corihuarmi gold mine, will be used to support the strategy of developing our near-term projects, including the current drilling programs,” said executive chairman of Minera IRL Courtney Chamberlain.
On May 14 this year, Minera filed a short form prospectus with regulators in Canada for a share offer to raise up to C$25 million.
Fox-Davies Capital issued a note on Minera IRL this morning, emphasizing the importance of securing funds for the Ollachea and Don Nicholas development. “Although Minera had $13m cash on hand in the last release (April), it has a massive drilling programme underway. Whilst this is being hugely successful, it does consume funds and there is also the prefeasibility study for Ollachea to fund,” said the broker.
In mid May, the company said that drilling results from the new Concurayoc Zone at Ollachea warrant a major follow-up drilling programme, reporting mineralisation in five drill holes over a 500 metre strike length at Concurayoc, including intersections of 20.9 metres of 3.07 g/t (grammes per tonne) of gold, 14 metres of 2.91 g/t gold and 8 metres of 5.08g/t gold.
The Concurayoc zone is relatively close to the Minapampa Zone, where the group has identified an inferred resource of 1.3 Moz (million ounces) of gold.
Don Nicolas currently has an Indicated Resource of 1,078,000 tonnes at 5.8 g/t for 200,700 oz (ounces) of gold and an Inferred Resource of 1,075,000 tonnes at 4.6 g/t for 158,400 oz of gold.
The group operates the Corihuarmi gold mine and the emerging Ollachea as well as Don Nicolas.

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