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Minera IRL’s Corihuarmi gold mine continued to perform well in Q1

In the three months ended 31 March, Minera IRL (TSX:IRL, LON:MIRL, BVL:MIRL) produced 7,071 ounces of gold from the Corihuarmi gold mine, ahead of budgeted projections, realising sales revenue of US$8.4m, an average sales price of US$1,110/oz and a cash operating cost of US$432/oz at Corihuarmi.

“The company's financial performance for the three months to 31 March 2010 was in line with management's expectations, with our Corihuarmi gold mine continuing to perform well”,   Minera IRL chairman Courtney Chamberlain commented. “Our diverse range of technical programs are progressing very well with the commencement of the pre-feasibility study at the Minapampa Zone, Ollachea project in Peru and a full feasibility study on the recently acquired Don Nicolas project in Argentina.”

“On the exploration front, we have announced an exciting new discovery at Concurayoc, Ollachea, as well as the identification of large gold bearing breccia zone at Escondido in Patagonia."  

Broker Fox-Davies Capital noted as a point of interest that the strike length of the Escondido body has grown from more than 500m in the mid-May exploration update to some 700m currently. Escondido is immediately adjacent to Mariana Resources' (LON:MARL) Dos Calandrias discovery, the two leases being contiguous. "Given that Mariana is perceived as an exploration company, whereas Minera is more of a developer/producer, there is obviously potential for a deal here is exploration continues to give good results," the firm added.

For the March quarter, the first of the current financial year, Minera reported earnings (EBITDA) of US$2.3 million (Q109: US$2.4m), with pre-tax profits of US$566,000 (Q109: US$633,000), and net profit at US$242,000 (Q109: US$293,000).  With US$10.9m, as at 31 March, the company said it had a healthy cash balance.

From an operational perspective, Minera highlighted that the in-fill drilling for the Ollachea project pre-feasibility study has commenced, whilst also noting the new discovery at Concurayoc. “The new Concurayoc discovery at Ollachea ... has identified potentially economic grade gold mineralization over a strike length of some 500 meters.”

Elsewhere at the Don Nicolas project, the Feasibility Study began during the period.  The company also noted  nearby discoveries, by other explorers. “In Patagonia, a large breccia body named Escondido has been identified immediately adjacent to the Dos Calandrias discovery announced by Mariana Resources. Surface sampling on Escondido has returned anomalous gold values over a strike length of some 700 meters.” 

The Don Nicolas feasibility study is due for completion in 2011.

On a corporate level, the company moved up to the main board of the Toronto Stock Exchange (TSX), and sealed a US$20 million debt finance facility, with Macquarie Bank, to fund the development and exploration push at the “rapidly evolving” Ollachea and Don Nicolas projects.

Minera IRL is the Toronto, London and Lima listed holding company of precious metals mining and exploration companies focused on Latin America.  It operates the Corihuarmi gold mine and the emerging Ollachea gold project in Peru as well as the Don Nicolas project in Argentina.