Ivernia Inc.

Ivernia Inc.

February 25, 2010 01:06 ET

Ivernia Announces Restart of Magellan Mine Processing Plant and Provides 2010 Production Guidance

TORONTO, ONTARIO--(Marketwire - Feb. 25, 2010) - Ivernia Inc. ("Ivernia" or "the Company") (TSX:IVW) is pleased to announce the restart of processing operations at the Magellan Mine in Western Australia during the week commencing February 22, 2010. Magellan currently has approximately 7 weeks of stockpiled ore available for processing through the plant, and mining operations are scheduled to recommence in March. Magellan estimates it will produce approximately 60,000 tonnes of contained lead in concentrates during 2010 following the restart of operations. Magellan has substantially completed the shipment of approximately 22,700 wet metric tonnes (approximately 13,500 tonnes of contained lead) of stockpiled lead carbonate concentrates and there will now be a smooth transition into shipping new production from the restarted Magellan operation.

Magellan Restart

In August 2009, following extensive community and Government consultation, Magellan was granted the final approvals to commence sealed shipments of lead carbonate concentrates through the Port of Fremantle. Shipments of the mine-site concentrate stockpiles commenced in September 2009 with a continuous flow of filled containers delivered to the Port of Fremantle for export to international lead smelters. In parallel with shipping the stockpiled material, during the second half 2009 Magellan embarked on the detailed restart planning process as reported in the November 12, 2009 news release.

Significant additions to the Magellan management team were made during the second half of 2009 and recruitment of the mine-site workforce commenced in the fourth quarter of 2009 ahead of restart. At full complement the Magellan workforce will be about 160 including contractors.

The Magellan processing plant has been on care and maintenance for nearly 3 years. The staged restart of the processing plant commenced on February 22, 2010. The major maintenance and re-commissioning projects required ahead of restart were substantially completed during January and February 2010 with one of the key objectives being to ensure major maintenance projects were completed ahead of restart to ensure a high level of plant availability during 2010 and 2011. Major projects included the refurbishment of the run of mine ore bin and apron feeder, mill linings and re-alignment, refurbishment of the surge tank, repairs to the floatation circuit, re-commissioning of the pressure filter, upgrades to the process control systems, refurbishment of the lead concentrate storage shed, re-commissioning of the power station, construction of a wastewater treatment plant and maintenance on the process water dam.

2010 Production Outlook

Following this week's restart Magellan will be ramping-up production over the course of 2010 and Ivernia provides the following quarterly guidance.

  1Q 2010 2Q 2010 3Q 2010 4Q 2010 2010
Ore Mined ('000 Tonnes) 0 225 415 525 1,165
Ore Milled ('000 Tonnes) 70 340 410 450 1,270
Contained Lead in Concentrate ('000 Tonnes) 3 17 19 21 60

There will be a staged ramp-up of production during the second and third quarters of 2010 with planned full production levels being reached towards the end of the third quarter of 2010. From 2011 onwards Magellan plans to process 1.9 million tonnes per annum of ore producing on average approximately 85,000 tonnes per annum of contained lead in concentrate for the mine life.

Further guidance and resource and reserve statements will be published in the Annual Management Discussion and Analysis and Annual Information Form documents to be published at the end of March, 2010.

Shipping of Concentrate Stockpiles and Treasury

Shipments of concentrate stockpiles are nearing completion and a smooth transition into new production is expected. All stockpiles have now been substantially bagged and loaded into containers, with 20,700 wet metric tonnes of the 22,700 wet metric tonne stockpile having left site and 20,100 wet metric tonnes having been shipped through the Port of Fremantle without incident and in full compliance with the stringent conditions imposed by the Western Australian Minister for Environment.

The monetization of stockpiles to date has increased the Company's cash balances to approximately US$19 million as at February 23, 2010. In addition, assuming a US$2,200 per tonne lead price on unpriced metal from these stockpiles, the Company expects to realize a further US$3.8 million in net proceeds from the remaining stockpile sales and shipments including net receivables from customers and brokers relating to prior shipments.

On February 4, 2010 Magellan Metals met its commitment under the terms of the Esperance Agreement and made a A$3 million payment to the Western Australian Government (refer to note 15a to the September 30, 2009 Financial Statements).

Ivernia anticipates that at current US$2,200 per tonne lead price levels Magellan will require approximately $6 million of funding from Ivernia treasury to fund the ramp-up of operations at the Magellan Mine from now until the end of May 2010, with the Magellan operation turning cash positive from then onwards. For each US$100 per tonne increase or decrease in the lead price for unpriced lead production above and below US$2,200 per tonne, the Magellan funding requirement until the end of May will increase or decrease by $1.6 million respectively.

Alan De'ath, Ivernia President and Chief Executive Officer said, "This week's restart of Magellan operations is a significant milestone for Ivernia and Magellan and the culmination of a tremendous effort by the entire team. We have successfully recruited a strong Magellan management team and workforce that is fully committed to achieving all of our objectives and are delivering on the restart according to plan. It is exciting to see Magellan returning to production at a time in the market where we are seeing higher prices and strong lead market fundamentals."

About Ivernia:

Ivernia is an international base metals mining, exploration and development company. The Company is the sole owner and operator of the Magellan lead mine in Western Australia. When operations resume and target production levels are achieved the mine is expected to be a significant pure lead producer accounting for approximately 2% of the total world lead mine production.

Ivernia trades under the symbol "IVW" on the Toronto Stock Exchange. Additional information on Ivernia is available on the Company's website at www.ivernia.com and at SEDAR at www.sedar.com.

Forward-Looking Statements

Certain statements contained in this press release constitute forward-looking information within the meaning of securities laws. All statements included herein (other than statements of historical facts) which address activities, events or developments that management anticipates will or may occur in the future are forward-looking statements, including statements as to the following: future targets and estimates for production, capital expenditures, operating costs, cash costs, mineral resources and ore reserves, recovery rates, grades and prices; business strategies and measures to implement such strategies; competitive strengths; estimated goals and plans for Ivernia's future business operations; and other such matters. Forward-looking statements are often, but not always, identified by the use of words such as ''seek'', ''anticipate'', ''contemplate'', ''target'', ''believe'', ''plan'', ''estimate'', ''expect'', and ''intend'' and statements that an event or result ''may'', ''will'', ''can'', ''should'', ''could'' or ''might'' occur or be achieved and other similar expressions. These statements are based upon certain reasonable factors, assumptions and analyses made by management in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. However, whether actual results and developments will conform with management's expectations is subject to a number of risks and uncertainties, including factors underlying management's assumptions such as metal price volatility, lead carbonate concentrate treatment charges, exchange rates, regulatory proceeding and litigation, single mineral property, resources and reserves, health and safety, environmental factors, mining risks, metallurgy, labour and employment regulations, government regulations, insurance, refinancing risk, dependence on key personnel, constraints on cash flow and nature of mineral exploration and development. Additional factors and considerations are described in the Company's Annual Information Form dated as of March 31, 2009 under "Description of the Business of the Company – Doing Business in Australia" and elsewhere in this press release and in other documents filed from time to time by Ivernia with Canadian securities regulatory authorities. While Ivernia considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. These factors may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements, and there can be no assurance that the actual results or developments anticipated by management will be realized or, even if substantially realized, that they will have the expected results on the Company. Undue importance should not be placed on forward-looking information nor should reliance be placed upon this information as of any other date. Except as required by law, while it may elect to, Ivernia is under no obligation and does not undertake to update this information at any particular time.

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