Minera IRL close to re-start of Canadian trading

An email from Frank O’Kelly, Chairman and Interim CEO of Latin American junior gold miner/developer, Minera IRL suggests that he, and his colleagues, now anticipate that the Ontario Securities Commission will shortly allow trading to resume in MIRL stock.  Trading was suspended when the company failed to file its 2015 financials, a situation precipitated by the untimely death of the then Chairman and CEO, Courtney Chamberlain,  and a subsequent internal struggle for control of the company.

Since that time much has changed with regard to the executive management of the company: The former directors have been replaced and legal disputes resolved pursuant to an extraordinary meeting of the shareholders and the appointment of long term consultant to the company, O’Kelly, as Chairman and interim CEO. Mr. O’Kelly is a seasoned professional with many years of experience of mining in South America.

The company is now completely up to date with its filings and the Board has been reconstituted with high profile individuals including most recent addition, Robert Schafer, President of Canada’s Prospectors and Developers Association.

The company has an operating gold mine in Peru in Corihuarmi, which is close to the end of its operating life.  But its flagship project is a major advanced new gold mine development, Ollachea, located in Puno in the South of Peru. This project is fully funded by a Peruvian State Development Bank ($240 million facility of which $70 million has been advanced). The mine is fully permitted and has subscribed a 30 year social license with the local community. The mineral resource exceeds 2.40 million ounces Au and M+I reserves of 1 million ounces, which will sustain a production of 100,000 ounces of gold per annum for a decade. The company is presently drilling off an already constructed 1.2 km access tunnel with a target of adding an additional 600,000 ounces to the resource. The down dip extension which is currently being drilled reports intersections up to 20 m with grades from the only 3 holes for which so far have assays reporting 5 g/t Au, some 40% better grade than the main ore body which was delineated with 82,000 m of drilling. AMEC has filed a NI 43-101 compliant feasibility study.

In anticipation of production by the end of 2018 the company has negotiated a fixed price turnkey EPC contract with Peru’s largest mine construction company, Graña y Montero, and is currently assembling what it describes as a first class owner’s management team. MIRL is in the process of commencing detailed design and placing orders for long lead capital items of equipment.

The company reckons that there are only a handful of advanced gold projects in the condition of Ollachea and there should be enthusiastic acceptance from investors.

This is a situation where prior controversy has depressed the share price to levels of an order of magnitude of what other less advanced gold project are commanding. There is a capacity for a very substantial increase in the share price.

When trading opens, MIRL shares will be able to be traded on the Lima Stock Exchange and as a temporary measure on the Canadian CSE Exchange, whilst the company’s application for reinstatement on the TSX is being processed.

O’Kelly himself comments that he is anticipating the lifting of the OSC “cease trade order” any day now and that some shareholders may see this as an opportunity to dump the stock whilst others may recognize this as a unique opportunity to make a killing. His personal view, and he is not one prone to hyperbole, is that the stock is chronically undervalued. The writer has known O’Kelly off and on for over 50 years so writes with personal experience of his character.

O’Kelly goes on to note that companies like Dalradian command a market cap ten times that of MIRL, whilst possessing comparable resources but still have permitting and financing challenges ahead. Meanwhile MIRL has a producing gold mine, a fully funded project with all the permits in place, a 1.2 km access tunnel, an EPC fixed price contract with Peru’s largest mine construction company and a 30 year social license for the local community. One can count on one hand, he says, the number of gold projects as advanced as Ollachea.  His short term target is to get the stock price over CAD $0.30.

 

 

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Minera IRL now has Board to take company forward

The latest Board changes at Minera IRL, announced by recently appointed chairman Frank O’Kelly, will have erased any lingering ill-feeling resulting from the contentious days when Board control was taken by Daryl Hodges following the untimely death of company founder, Courtney Chamberlain.  For those unfamiliar with events, Hodges was perhaps too forceful a character and appeared to be leading the company down a path contrary to that deemed propitious by the company’s Peruvian operating subsidiary led by co-founder Diego Benavides, and by the bulk of the company’s shareholders.  Hodges was voted out by a huge majority in a subsequent shareholders’ meeting, but the rest of the Board that remained were mostly Hodges appointees and there was a strong feeling that he was still pulling their strings.  But gradually things and personnel have changed, albeit not before some highly personalised attacks aimed at Benavides originally initiated by Hodges.

Gradually the Board has changed, firstly with the appointment of Julian Bavin, formerly with Rio Tinto, and then O’Kelly, a long time consultant to the company and to Courtney Chamberlain, but dropped by Hodges.  O’Kelly has now become Chairman of the Board, and the last remaining Directors from the Hodges era, Robin Fryer and Doug Jones, have stepped down now that two new Directors have been appointed.

Commenting on the resignations, O’Kelly said “that the departing directors had notified the Board some while ago of their intention to stand down once replacement Directors had been nominated and the terms of the Memorandum of Understanding (press release dated February 5th, 2016) had been substantially accomplished.  The new Minera IRL directors are Gerardo Perez and George Bee.”

In the statement, O’Kelly commented that he “appreciated the dedication and professionalism of the two departing directors who had been subjected to intense pressures during the past tumultuous year of internal dispute within the company. Throughout that period they both contributed their time and effort well beyond what is normally expected of non-executive Directors.  Both have agreed to provide consulting services up to the 2016 AGM in order to consolidate the transition and assist with the Company’s endeavours to re-establish share trading and advance the flagship gold project at Ollachea.”

Doug Jones has been the longest standing of the Directorate pre-dating the Hodges era, while Robin Fryer was a Hodges appointee.  In conversation with Fryer he had   appeared to be a reasonable character, while Jones had been particularly important to the company in bringing to it his extensive geological expertise.  However the Hodges era had left a degree of acrimony behind which the two presumably felt had compromised their continuing positions on the Board.

So now Minera IRL has a Board which is pretty well set to advance the development of its flagship Ollachea gold mine in Peru.  The project had looked a robust one, even ahead of the big rise in the gold price this year, which will only enhance its prospects.  Much of the finance for the project is already in place through Peruvian bank Cofide. The Board will continue its progress in putting in place the necessary arrangements to resurrect its quote on the Toronto Stock Exchange and will look at regenerating its quote on London’s AIM market too.

Hopefully the days of dissent which had been disastrous for its shareholders are now behind it and Minera IRL will progress towards building and operating its second gold mine.  (it currently operates the Corihuarmi gold mine, also in Peru,  but this is close to the end of its life, but is still generating some useful cashflow.

Minera IRL appoints O’Kelly to Board

The long running Minera IRL saga is gradually being resolved.  The latest move is the resignation of Eric Olson as Chief Operating Officer and the appointment of Francis O’Kelly to the Board as a non-executive director.  To an outsider this may not mean very much, but Olson was very much a member of the group, led by Daryl Hodges, which dissident shareholders felt had usurped control of the company following the untimely death of former CEO Courtney Chamberlain.  O’Kelly was a long-time consultant to the company and was close to Chamberlain for many years, and has an understanding of the company’s assets and potential which few others will have possessed.

I should declare a personal interest here – I have known Frank O’Kelly off and on for many years – we were at the Royal School of Mines together back in the 1960s studying mining engineering, and I rate him as a personal friend.  He has a strong independent opinion on how Minera IRL should progress and as a consultant was not always in agreement with some of Chamberlain’s executive decisions, but was also strongly against many of the moves proposed by the Hodges controlled board following Chamberlain’s death.

The new Minera IRL Board comprises therefore Julian Bavin, Francis O’Kelly (both of whom were on the alternate slate of directors which was put up by dissident shareholders last year) together with Robin Fryer and Douglas Jones from the existing board

The Peruvian operating end of the company continues to be run, as it has been all along, by Diego Benavides – the founder of Minera IRL along with Chamberlain.  But now relations between the parent company and its Peruvian operating subsidiary should be in harmony rather than in conflict and it can move ahead with the securing of its financing through Peruvian state-controlled bank COFIDE and subsequent development of its flagship Ollachea gold project.

During the conflicts over Minera IRL’s direction and management the company was suspended from the Toronto Stock Exchange and it has since delisted from London’s AIM market.  Currently it intends to maintain its listing on the Lima Stock Exchange and reports from Peru suggest it hopes to relist in Toronto in April.

Hopefully all the dissension and unpleasantness of the past several year is now behind it with a settled board of directors enabling it to proceed with its plans to develop its Ollachea mine while retaining some admittedly diminishing cashflow from its existing Corihuarmi gold mine, also in Peru which is pretty much at the end of its operating life. Corihuarmi produced 23,917 ounces of gold in 2015.