Iberian Minerals Corp.

Iberian Minerals Corp.

February 22, 2010 08:28 ET

Iberian Minerals Reports 2009 Operating Results and Mine Updates, 2010 Capex and Exploration Budgets, Hedging Update, and 2010 Guidance

TORONTO, ONTARIO--(Marketwire - Feb. 22, 2010) - Iberian Minerals Corp. (TSX VENTURE:IZN) today announced operating results for 2009 and mine updates, 2010 capex and exploration budgets, together with an update on hedging positions and guidance for 2010.

2009 Condestable Mine Operating Results

Operations at the Condestable Mine remain in a steady state. Production for 2009 was slightly below plan, with 3% lower contained copper production, resulting from lower copper grade (2% under plan) and lower throughput (1% under plan).

The following are the highlights for the Condestable Mine operation for the period October 1, 2009 to December 31, 2009 (3 months), with total 2009 year figures:

  • Revenues were approximately US$ 26.0 million (2009 year US$ 103.4 million). 
  • Production was:
Production Unit   October   November   December   Q4 2009   2009
Ore processed t   182,103   180,118   181,863   544,084   2,159,549
Concentrate DMT   7,781   7,789   7,859   23,429   95,339
Contained  copper t   1,997   1,953   1,930   5,879   23,832
Fine gold oz   1,218   1,365   1,369   3,952   17,361
Fine silver oz   23,097   23,587   23,788   70,472   250,504
  • An average head grade of approximately 1.21% Cu, and a recovery rate of 90% (1.22% and 91%, respectively, for 2009 year). 
  • Operating costs for Q4 (C1 and C3) were US$ 0.94 and US$ 1.38 per payable pound of copper.
  • Operating costs for 2009 year (C1 and C3) were US$ 0.90 and US$ 1.24 per payable pound of copper.

During the quarter, all 2009 planned projects and mine investments were completed. A new motor for ball mill No. 5 has been received and will replace the existing motor during a planned maintenance shutdown in Q2 2010. The Karina vein has been opened up and developed on the -215 level; it is expected that by the end of Q1 development will reach the -255 level. Stoping from the higher grade Karina vein will start in March 2010, ahead of plan. A second tailings pipeline at the higher 260 elevation has been installed and will be in operation in February, 2010. The pipeline at this elevation allows the tailings area to operate for the life of mine.

The proposed purchase of the Raul lease and royalty, as previously announced, is proceeding on plan. The Company is currently considering various options for financing the acquisition which is due to close at the end of March, 2010.

For 2010 CAPEX and exploration at the Condestable Mine, the following budgets have been approved, with exploration of US$ 1.7 million to generally consist of surface sampling, geophysics and contracted surface diamond drilling at Condestable 10 and San Marcos.

Year 2010 (000s USD)
Sustaining 1,500
Plant Operation 466
Mine Operation 753
Others 281
Special Projects 1,540
Crushing Building extension 790
Courier Project 750
Exploration 1,700
Condestable 10 950
San Marcos 750
TOTAL 4,740

In addition, the Company reports that it has approved an additional capex project for 2010 relating to improvement in secondary crushing at a cost of US$ 3.3 million, the bulk of which will be financed by leasing and otherwise from cash flow.

2009 Aguas Tenidas Mine Operating Results

Commercial production was declared at Aguas Tenidas during Q4 2009 with effect from October 1, 2009.

The following are the highlights for the Aguas Tenidas Mine operation for the period October 1, 2009 to December 31, 2009 (3 months):

  • Revenues were approximately US$ 32.1 million.
  • Production was:
  Unit Q4
Copper Ore    
Ore processed t 321,951
Concentrate DMT 20,398
Contained copper t 4,800
Fine silver oz 51,536
Recovery rate % 82
Copper grade % 1.84
Polymetallic Ore    
Ore processed t 38,507
Copper/lead bulk concentrate DMT 2,368
Zinc concentrate DMT 2,473
Contained Copper t 274
Contained zinc t 1,218
Fine silver oz  20,605
Copper recovery rate % 62
Copper grade % 1.20
Zinc recovery rate % 51
Zinc grade % 6.57
  • Operating costs for Q4 (C1 and C3) were US$ 2.61 and US$ 3.34 per payable pound of copper. 

C1 and C3 cost figures were higher than anticipated for steady state as the production rate in Q4 was below nameplate capacity of 1.7 Mtpa at 85%. In addition, grade and recovery were below targets. The Company is expecting improved results in line with 2010 guidance below as the processing plant continues operations, and further optimization of the processing plant circuits is undertaken.

During the quarter, as reported, work continued on the modular bulk separation circuit, and subsequent to year end, reagent authorizations were received and commissioning of the circuit is underway. Plans for the proposed expansion of 30% at the processing plant continue. Mine development continued to improve during the quarter, but 2010 will focus on improved stoping and faster backfilling in order to meet planned production rates. Haulage using the Santa Barbara ramp has worked well and is meeting requirements. Underground drilling continued with one drill focused on definition and reserve replacement to the west, and one drill focused on extending the copper stockwork to the east, and at depth.

The Company will be continuing to focus on optimizing the Aguas Tenidas Mine and the planned expansion of capacity to 2.2Mtpa by the end of 2010.

For 2010 CAPEX and exploration at the Aguas Tenidas Mine, the following budgets have been approved, with exploration to consist of four surface drill holes in the Cueva de la Mora area to the northeast of the Aguas Tenidas deposit.

Year 2010 (000s USD)
  Sustaining 23,017
Plant Projects and equipment 10,187
Mine Development 6,549
Mine Equipment 2,339
Mine projects 480
Buildings 399
Communications infrastructure 336
Licenses 2,597
Other 131
  Special - Expansion 14,730
Mine development 4,366
Mine equipment 1,842
Plant projects and equipment 8,522
Exploration 308
Surface diamond core drilling 308
TOTAL 38,055

In addition, the Company reports that it is entering into a contract for additional underground development work totalling approximately 1600 metres of drilling, which is expected to be completed by the fall of 2010. The additional capex relating to this contract is US$ 2.2 million.

The Company also reports that the previously announced proposed senior debt facility is being finalized with final drafting of documentation and negotiation of outstanding business points currently in process. It is expected that the facility will be completed by the end of February, 2010.

The Company also announces that Ken Norris, Mine Manager at MATSA, has resigned for personal reasons and will be leaving the Company at the end of February. Mr Norris will be returning with his family to his country of origin (Canada) to pursue another opportunity in the mining industry. A search is underway for a qualified candidate, and in the interim, Daniel Vanin will assume responsibility at MATSA. Iberian thanks Mr. Norris for his contributions, and wishes him success in his future endeavours.

Hedging Policy and Position

The cornerstone of Iberian's Hedging Policy is the protection of the Company's assets. Management, reporting to the Hedging Committee, continually reviews the markets in which the Company trades, and depending on circumstances, decides if any additional or altered hedging is appropriate to enhance the future cash flow of the Company's operations while respecting protection of the Company's assets.

Positions as at December 31, 2009 were unchanged for Condestable Mine, except as a result of the passage of time.

As of December 31, 2009, copper production at the Condestable Mine has been hedged as follows:

Metal Period Contract type Volume Unit Strike price per unit (U.S. $)
Copper 2010 Forward 20,475 FMT 4,419
Copper 2011 Forward 20,625 FMT 3,494
Copper 2012 Forward 1,750 FMT 3,408
Gold 2010 Forward 2,400 Fine ounces 742
Gold 2011 Forward 2,400 Fine ounces 742

The hedging program for Aguas Tenidas Mine is, as of December 31, 2009 is as follows:

Metal Period Contract type Volume Unit Strike price per unit (U.S. $)
Copper 2010 Forward 23,400 FMT 4,409
Copper 2010 Call options sold 5,175 FMT 4,200
Copper 2011 Call options sold 925 FMT 4,200
Zinc 2010 Forward 27,550 FMT 1,608
Zinc 2010 Call options sold 4,900 FMT 1,500

The hedging program for Condestable Mine is fixed and in accordance with the terms of its syndicated loan. Hedge positions for Aguas Tenidas are continually reviewed and adjusted, to enhance alignment with evolving production schedules. Aguas Tenidas is currently not limited by any external hedging requirements. As part of the proposed senior debt facility, the Company expects that current 2010 hedging and call positions for Aguas Tenidas Mine will be adjusted as part of a fixed hedging program under the proposed facility.

2010 Guidance

Iberian updates guidance for 2010 for the Condestable Mine, and issues guidance for the Aguas Tenidas Mine.

At the Condestable Mine:

  • Production:
Production Unit 2010
Ore Processed t 2,200,000
Concentrate DMT 95,000
Contained  copper t 24,500
Fine gold oz 16,800
Fine silver oz 200,000
  • Average head grade of approximately 1.23% Cu, and recovery rate of 91% per year.  
  • Operating costs per payable pound of copper (C1 and C3) of US$ 0.85 for 2010, and US$ 1.43 for 2010. The increase in C3 is due to mine deepening costs and increased amortization due to purchase of Raul.

At the Aguas Tenidas Mine:

  • Production (all results based on 2.0 Mt ore processed):
Production  Unit 2010
Ore Processed t 1.9-2.0 million
Copper concentrate DMT 107,000
Zinc concentrate DMT 73,000
Lead concentrate DMT 13,000
Bulk concentrate DMT 2,000
Contained copper t 25,000
Contained zinc t 36,000
Contained lead t 5,000
Fine silver oz 600,000
  • Average head grade (copper ore) of approximately 2.0% Cu, and recovery rate of 82% per year.
  • Average head grade (polymetallic ore) of approximately 5.9% Zn and recovery of 75%; head grade of approximately 1.0% Cu and recovery of 55%.
  • Operating costs per payable pound of copper (C1 and C3) of US$ 1.46 for 2010, and US$ 1.86 for 2010 (assuming receipt of grant of 10,093,472.70 Euros).

Conference Call

Iberian will host a conference call on February 22, 2010 at 10.30am E.T.

Conference Call Information:  
Participant dial-in number(s): 416-695-7806 / 888-789-9572
Participant pass code: 4520216
Conference Call Replay:  
Dial-in number(s): 416-695-5800 / 800-408-3053
Pass code: 2714125

The conference call replay will be available from 1:00 p.m. ET on February 22, 2010 until 11:59 p.m. EST on March 1, 2010.

For further information on the conference call, please contact the Investor Relations Department, or visit our website, www.iberianminerals.com.

Financial Results

It is expected that financial results for the year ending December 31, 2009 will be available on SEDAR on March 31, 2009 after 5pm.

About Iberian Minerals Corp.

Iberian Minerals Corp. is a Canadian listed 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 and operates a 1.7 million tonnes per year underground mine and concentrator that produces copper, zinc and bulk copper/lead concentrates that also contain gold and silver. 

C1 costs are cash costs including mining, processing, site administration, and refining and treatment charges, net of by product credits, and C3 costs are total costs being C1 costs plus depreciation and amortization charges, royalties, interest costs and financing charges.


This news release contains certain "forward-looking statements" and "forward-looking information" under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward looking information may include, but is not limited to, statements with respect to the future financial or operating performances of the Corporation, its subsidiaries and their respective projects, the timing and amount of estimated future production, estimated costs of future production, capital, operating and exploration expenditures, the future price of copper, gold and zinc, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the costs and timing of future exploration, requirements for additional capital, government regulation of exploration, development and mining operations, environmental risks, reclamation and rehabilitation expenses, title disputes or claims, and limitations of insurance coverage. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of the Corporation and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions and other risk factors discussed or referred to in the section entitled "Risk Factors" in the Corporation's annual information form dated April 30, 2009. Although the Corporation has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Corporation undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Iberian Minerals Corp.
    Laura Sandilands
    Investor Relations and Corporate Communications