Minera IRL impresses in Q2 as gold production, sales and revenues increase

Latin American precious metal miner Minera IRL (TSX:IRL, LON:MIRL, BVL:MIRL) reported an impressive quarterly performance in terms of sales and production that helped it achieve strong interim results with production, sales and revenues climbing year-on-year with excellent progress made at the Corihuarmi gold mine in Peru.


Q2 production at Corihuarmi improved 4.5% year-on-year to 8,098 oz (ounces), while sales jumped 13.8% to 8,253 oz and revenues reaches US$10 million.

Revenues for the six months to 30 June amounted to US$18.3 million compared to US$13.3 million a year ago. The company made pre-tax profits of US$3.6 million in H1 with US$3 million coming in during Q2, compared to US$557,000 in the previous second quarter. Gold production for the half was 15,169 oz compared to 14,903 oz in H1 2009.

The material improvement in sales and revenues was largely due to a dramatic increase in gold prices that has occurred over the past year with the yellow metal hitting record highs at US$1,265/oz in June. Minera managed to achieve an average sales price of US$1,157/oz in H1 and US$1,201/oz in Q2, up from US$8917/oz in H1 2009.

Cash operating costs averaged US$365/oz for the quarter, reducing he average cash operating costs for the first six months to US$396/oz. Cash balance stood at US$6.6 million at 30 June, up from US$5.1 million a year ago.

On the operational front, Minera has further progressed the pre-feasibility study on the Ollachea project in Peru that is on target for completion in H1 2011 and the feasibility study on the Don Nicolas project, likewise due for completion in 2011. Infill drilling at the Minapampa Zone at Ollachea with 2 rigs continued throughout the period with 32 of the 40 holes completed to date. Two drill rigs completed the infill and stepout drilling in late July on the Sulfuro Vein, one of the two principal deposits at Don Nicolas. This will be followed by infill drilling on the Martinetas deposit.

The company has also reported encouraging results from exploration in Peru and Argentina. During the period, Minera added a new exploration project, Killincho, in southern Peru.

“A high level of activity continued during the June quarter of 2010.  Excellent results were achieved from our Corihuarmi gold mine, good progress has been made on the pre-feasibility study on the Ollachea project and the Feasibility Study on the Don Nicolas project and there have been encouraging results from exploration in Peru and Argentina,” said Chairman Courtney Chamberlain.

Other developments included the listing of the company on the Toronto Stock Exchange (TSX) and the negotiation of a US$20 million facility with Macquarie Bank.

http://www.proactiveinvestors.co.uk/companies/news/20088/minera-irl-impresses-in-q2-as-gold-production-sales-and-revenues-increase-20088.html