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Lima-based gold producer Minera IRL (AIM, Lima: MIRL) aims to release an updated mine plan in the next month or so to prolong the life of Corihuarmi in Peru, its only producing mine, and at the same time is seeking M&A opportunities in Latin America, company chairman Courtney Chamberlain said Thursday at a press conference in Chilean capital Santiago.
Meanwhile, the company is also progressing at its Ollachea gold project in Peru and aims to release an exploration update on it in April, Chamberlain added.
"We don't want to be seen as just a small producer," Chamberlain said, adding that IRL's goal is to have Ollachea in production within six or seven years, at about the time Corihuarmi will stop producing, according to its current mine plan.
Corihuarmi, which started pouring gold in March 2008, exceeded its goal of producing 35,000oz last year and aims to churn out 35,000oz this year at a cash cost of US$320/oz, according to the executive.
Whether through the acquisition of a new project or via development of Ollachea, Chamberlain said IRL's goal is for its next mine to produce some 70,000oz/y gold, double what Corihuarmi puts out.
The company is considering acquisition targets in Colombia, Mexico, Brazil and Argentina's mining friendly provinces, but has ruled out Ecuador, Venezuela and Bolivia, and also Argentina's more questionable provinces from a mining-friendly standpoint.
As for the size of an investment, Chamberlain said IRL is capable of raising enough to fund the purchase of a company, publicly traded or private, with a market cap or total worth of some US$100mn. IRL presently has a market cap of roughly US$60mn.
IRL also is firm about its wishes to manage whichever project it acquires. "We want to be in control," Chamberlain said.
In financing, the company chairman said several banks have offered loans, but in some cases the proposals involved interest rates higher than ones last year.
But with a price tag of US$100mn, it is likely the company would opt to fund the purchase through a mix of debt and equity, in which case it would seek out investors in London and Lima where the miner is listed, and also is entertaining the idea of listing in Toronto.
If the company chooses to list on the Toronto Stock Exchange it will likely do so this year and pay for the listing procedures with money out of its roughly US$10mn in the bank, Chamberlain added.
BULLISH ON SHARES, GOLD PRICE
"We were the best performing stock last year in both London and Lima," Chamberlain said.
The company, which already was trading on London's AIM market, listed in Lima's venture segment in last year's first quarter and ascended to the bourse's first tier following the production startup of Corihuarmi.
Currently, the company's shares are trading at some 62.42 pence in London, compared to 43 pence/share on October 27 and 71 pence/share on June 6. Upon launch of its shares on the AIM in April 2007, IRL traded at 50 pence/share.
Chamberlain attributed the miner's strong performance - rare in today's market - to the strength of gold as a commodity, and because the company has been one of the few juniors in the industry in recent years to have achieved production and has an outlook to move on to new mines.
As for the performance of gold, the chairman said he anticipated it would average roughly US$900-1,000/oz this year.
Gold on the London Bullion Market jumped to US$925/oz Thursday from US$900/oz the day before. The yellow metal peaked at more than US$1,000/oz in March 2008 and started this year worth US$875/oz.