Mineral IRL swaps US$1m debt for equity with Resource Capital Fund

Minera IRL (AIM, BVL: MIRL, TSX: IRL) has entered into an agreement with Resources Capital Fund to exchange the US$1 million outstanding principal amount of the RCF Working Capital Facility for the issue of 1.1 million shares at a price of US$0.90 per share.
Following the debt for equity swap, RCF’s interest in the company will amount to 3.9 million shares, or 4.47%.
The share issue is now subject to the approval of the Toronto Stock Exchange (TSX). The transaction is expected to close by 30 June 2010.
Broker Fox-Davies Capital (FD Capital) said this was an “interesting move” that it fully supported, noting that the transaction was made at a price very close to the current market value of £0.59, or US$0.89.

Minera IRL is engaged in development and exploration of precious metals resources in the Andean cordillera of South America.

Earlier this month the company 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.
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.