Minera IRL's (LON:MIRL TSE:IRL) full year results came in better than expected thanks to a continued good performance from the Corihuarmi mine in Peru.
Corihuarmi is coming to the end of its life, but produced a better than expected 27,321 ounces of gold in 2012, though this was down 18% on the previous year.
Costs were also affected by an increase in the amount of waste mined and lower grades
Broker Canaccord added that Corihuarmi has now passed the original planned mine life by a year and potentially could produce until to 2015/16.
Revenues for the year were US$46mln, down 13%, with income boosted by a realised gold price of US$1,673.
Net profits came in at US$3.3mln (US$9.8mln).
The focus now is on the developing projects at Ollachea in Peru and Don Nicolas in Argentina, where Minera completed feasibility studies for both in the past twelve months.
Courtney Chamberlain, executive chairman, said "Whilst now mature, Corihuarmi continues to produce at above expectations providing important cash flow.
"The robust feasibility studies at both Ollachea and Don Nicolas have paved the way for rapidly moving both projects toward production."
Canaccord said 2012 was an eventful year with the feasibility studies (Ollachea - IRR 22% at US$1,300/oz gold & Don Nicolas - IRR 23% at US$1,250/oz) combined with major investment (US$50m in 2012), primarily at Ollachea and drilling around Don Nicolas.
On an enterprise value/resources basis, Minera's 3.4M ounces are trading at $27/oz, around a 50% discount to the peer average of $60/oz, said the broker.
Securing finance for Don Nicolas is the next target, says Canaccord, while also following up on heap leach studies for the low grade resource.
At Ollachea, underground exploration drilling of the eastern and down-dip extensions has commenced, while the EIA has been submitted with approval expected in the second half of 2013.
Canaccord reiterated its buy stance with a 130p target price. Shares today were 38p.
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