Minera IRL plans C$32mln fund raise to move Ollachea forward

Minera IRL (LON:MIRL TSE:IRL) is to raise C$32mln (£20.1mln) largely to fund early development costs for its Ollachea Project in Peru.

Minera published a definitive feasibility study for the project in 2012 and is currently in the permitting stage for the gold mine.

A prospectus supplement will be filed in Canada - other than Quebec - and the UK, US and parts of South America on a private placement basis

Assuming gross proceeds of C$32mln, Minera has budgeted for expenditure at Ollachea of C$4.2mln for general & administrative costs, permitting, community, archaeology & land acquisition; C$6.9mln for detailed engineering and to advance the tunnel to 1200 metres (m); C$5.5mln to take the tunnel to 1,560m and C$1.5mln for a second payment.

In addition, Minera has set aside a further C$2.7mln for underground exploration work at Ollachea.

The remainder of the money raises will be split between its Don Nicolas project in Argentina (C$1.5mln), Patagonia exploration (C$3.6mln) and C$6.2mln for working capital.

Ollachea has probable mineral reserves of 9.3 million tonnes grading 3.4 grams per tonne (g/t) gold and containing 1.0 million ounces.

The DFS last November revealed a net present value (NPV) of US$155 million (post tax), up-front capital cost estimate of US$177.5mln and life of mine cash operating costs of US$499 per ounce.