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Message: Reports Q1 Condestable Operating Results, Aguas Tenidas and Hedging Update
| May 4, 2009 | |||
| Iberian Reports Q1 Condestable Operating Results, Aguas Tenidas and Hedging Update, and Issues 2009/2010 Guidance | |||
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TORONTO, ONTARIO--(Marketwire - May 4, 2009) - Iberian Minerals Corp. (TSX VENTURE:IZN) today announced operating results for the Condestable Mine for the first quarter of 2009 together with an update on ramp-up at the Aguas Tenidas Mine, hedging positions, and issued guidance for 2009 and 2010. Q1 Condestable Mine Operating Results Operations at the Condestable Mine continue in a steady state, and on plan. As previously noted, the mine operation is optimized at 6,000 tpd, and results continue to be consistent and reliable. During 2009, the Company is implementing capital projects estimated at US$4.7 million, including the acquisition of two six-yard scoops, one diamond drill, mill spares (main power transformer and ball mill motor) which will further enhance operational stability, and completion of the automated plant monitoring and control system. In addition, a limited exploration program on Vinchos Este consisting of 1,500 meters of surface diamond drilling is contemplated. The following are the highlights for the Condestable Mine for the period January 1, 2009 to March 31, 2009 (3 months): - Revenues were approximately US$24.0 million. - Production was: ---------------------------------------------------------------------- Production Unit January February March Q1 2009 ---------------------------------------------------------------------- Concentrate DMT 8,676 7,213 8,450 24,339 Contained copper t 2,123 1,854 2,137 6,114 Fine gold oz 1,492 1,550 1,616 4,658 Fine silver oz 22,170 18,756 20,772 61,697 ---------------------------------------------------------------------- ---------------------------------------------------------------------- - Cash operating cost (C3) for Q1 was US$1.05 per pound of copper produced. The Company is pleased to report that its workers signed a collective labour agreement for three years on January 22, 2009. In addition, the Condestable Mine received both ISO 14001 and OHSAS 18001 certifications concerning environmental management systems, and occupational health and safety management systems for employees. These qualifications, along with a continuous record of excellent safety, led to the Mine recently being chosen as winner of Peru's Annual Safest Mine Award in the underground category. Q1 Aguas Tenidas Mine Update At the Aguas Tenidas Mine, as previously reported, the Company achieved start-up of both the copper and polymetallic circuits. As a result of licensing delays, the Company expects to process approximately 1 million tonnes of ore (combined copper and polymetallic ores) versus the planned 1.5 million tonnes during ramp-up in 2009, split 60%/40% as to copper ore and polymetallic ore. With the completion of the Santa Barbara ramp, which is dedicated to haulage of ore and waste to surface, the Company is focusing on mining copper ores, and has incorporated into the mining plan the extraction of higher grade copper massive sulphide and copper stockwork stopes in Q3 2009 and throughout 2010. Continued exploration and delineation of rapidly accessible copper stockwork ores, located to the east of the previously announced copper stockwork resource, is planned for Q2 and Q3 of 2009. With the reduction in ore feed to the process plant, revenues have been delayed, such that the Company's cash position at the start of the year, which was expected to fund remaining capex projects at Aguas Tenidas (essentially the completion of the process plant and the paste plant) has been required to fund operations in Q1 of 2009. On-going use of funds will also be impacted, as cash is required to be allocated to operational expenditures while ramp-up continues. There have been several periods of reduced operating time for one or both circuits at the plant, which allowed the Company to make adjustments and changes that are a continual part of the ramp-up process. That process continues, with special emphasis on improving concentrate grades and recoveries, especially for polymetallic ore. The Company is pleased with recent developments in the process plant and on-going metallurgical optimization work being carried out at the metallurgical laboratory. This work has resulted in optimization of reagent use, adjustment to reagent flotation times, optimization of flotation feed grind size, among other things, and the Company is expecting that recovery rates and concentrate grades set out in the original feasibility study will be achieved. To date, planned copper recoveries and concentrate grades from the copper circuit are being attained. Plant modifications are already underway to convert the polymetallic portion of the process plant into a bulk copper and lead flotation scheme followed by copper and lead separation so as to improve both copper and lead recoveries and concentrate grades, with expected additional benefits of reduced process plant operating costs. Mining development and production results are steadily improving with new mining mobile equipment arrival. The Company is continuing to work with product and services suppliers to reduce costs and improve productivities. Daniel Vanin, President of Iberian commented: "We continue to be pleased with results at the Condestable Mine. At Aguas Tenidas, we continue our efforts and are making progress. We will be closely monitoring market conditions and company costs as we move forward in 2009. Although our Aguas Tenidas Mine will require funding until the operation becomes cash flow positive, we have a plan and are focused on the long term successful future of our Company." Hedging Position and Policy Production at the Condestable Mine has been hedged as to approximately 85% of hedgeable production until the end of 2011. The average price for 2009 and 2010 is US$4,419 per tonne and the price for 2011 is US$3,492 per tonne of copper. Gold production (2,400 oz per year) has been hedged at US$741.50 per oz for 2009-2011, while silver production in 2009 (65,000 oz) has been hedged at US$13.86 per oz. The hedging program for Aguas Tenidas Mine announced in December has been re-sturctured as follows: - 14,675 tonnes of copper forward at average price of US$3,835 per tonne for 2009/10 - 6,100 tonnes copper calls at a strike price of US$4,200 per tonne maturing in 2010/11. - 12,350 tonnes of zinc forward at an average price of US$1,335 per tonne maturing in 2009/2010 - 4,900 tonnes zinc calls at with a strike price of US$1,500 per tonne maturing in 2010. The Board of the Company continually reviews the future prices of copper and zinc and depending on circumstances, decides if any additional or altered hedging is appropriate to enhance the future cash flow of the Company's operations. 2009/2010 Guidance Iberian issues the following guidance for 2009 and 2010 for the Condestable and Aguas Tenidas Mines. At the Condestable Mine: - Production: ---------------------------------------------------------------------- Production Unit 2009/2010 ---------------------------------------------------------------------- Concentrate DMT 96,000 Contained copper t 24,500 Fine gold oz 16,800 Fine silver oz 200,000 ---------------------------------------------------------------------- ---------------------------------------------------------------------- - Cash operating costs per pound of copper (C3) of US$1.07 for 2009 and US$1.08 for 2010. At Aguas Tenidas, it is expected that, based on Iberian's projections, ore production will be 1.0 million tonnes in 2009 and in a range of 1.7 to 1.85 million tonnes in 2010. Although actual costs remain to be calculated, current budget indications are that costs, based on expected ore processed, will be as follows: ----------------------------------------------------------------------
Costs 2009 2010
US$/t US$/t
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Mining 28 24
Plant 21 18
G&A 9 7
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Iberian Minerals Corp. is a Canadian-based global base metals company with interests in Spain and Peru. The Condestable Mine, located in Peru approximately 90 km south of Lima operates at 2.2 million tonnes per year producing copper, and associated silver and gold in a concentrate. The Aguas Tenidas Mine is in the Andalucia region of Spain approximately 110 km north-west of Seville. Ramp-up continues on a 1.7 million tonnes per year underground mine and concentrator that will produce copper, zinc and lead concentrates that also contain gold and silver. |
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